Anomalies in Decision Making

Anomalies in decision making refer to unusual patterns where people's choices deviate from expected rational behavior, often influenced by biases or emotional factors. These deviations can lead to inconsistent, unpredictable, or suboptimal decisions. For example, people might prioritize avoiding losses more than seeking gains (loss aversion) or be overly influenced by recent events (recency effect). Recognizing these anomalies helps us understand that human decisions are not always purely logical, highlighting the role of psychological factors that can distort judgment despite rational intent.