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Berkson’s Paradox - the tendency to misinterpret statistical experiments involving conditional probabilities, not taking into account likelihoods and the subpopulation sampled.
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Sunk Cost Fallacy - the greater tendency to continue an endeavor once a commitment has been made even with contradictory evidence.
- It is a fallacy because we factor in past costs rather than present and future costs.
- Whether or not the endeavor succeeds doesn’t suddenly refund one’s commitment to it. The sunk cost is not recovered once paid for.
- It can be attributed to a mix of commitment bias, and loss aversion.
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G.I. Joe Fallacy - the tendency to think that knowing a fallacy or bias is enough to counteract its influence.
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Gambler’s Fallacy - the tendency to think that independent events influence each other even when they do not. If an event did not happen in the past, it will happen in the future.
- It arises from misattributing two events as causally link when they are in fact independent
- The above, in turn, arises from how we try to make sense of random events by seeing patterns
- Another reason is due to observing only a small sample size and us not realizing that the past in this case is not representative of the future.
- It is also due to a misconception that chance is fair, rather than random.
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Hot Hand Fallacy - the belief that a win streak implies more success into the future.
- It happens when we make assumptions or decisions based on a small sample of observations.
- Thus it arises from our tendency to find patterns and trends, without taking into account random chance.
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Mind Projection Fallacy -comes in two forms
- Positive form: Assuming that the way one thinks about the world reflects the way the world really is rather than it being a matter of personal projection. It is a fallacy to assume that other people are irrational just because they do not share the same perception.
- Negative form: One’s assumes their lack of knowledge about a phenomenon means that the phenomenon cannot be understood.
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Mistaking the Map For the Territory - the word is not the thing. It is a fallacy to confuse the semantics of a term with the thing that it represents.
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Subadditivity Effect - the tendency to judge probability of the whole to be less than the probabilities of the parts.
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Time-saving bias - the tendency to misestimate the time that could be saved or lost when increasing or decreasing speed.
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Zero Sum Bias - a situation is incorrectly perceived as a zero-sum game.