Cass Sunstein, in a recent Bloomberg article in which he examined the causes of his own personal investing mistakes, reminisced about a dumb selling decision that he made in 2011. Putting himself on the couch to figure out what he did wrong, Sunstein came up with three reasons to explain why he brashly chose to sell something on a whim:
… Read the rest of this article!
“Of the behavioral mistakes to which I fell victim, the first is called “availability bias.” Behavioral scientists have shown that if something has happened in the recent past, it is cognitively “available,” and people tend to exaggerate the probability that it will happen in the future.
Availability bias isn’t exactly irrational, but it