Behavioral Bias and Decision Making

Behavioral bias refers to the systematic patterns of thinking that lead people to make irrational decisions. These biases often stem from emotions, cognitive shortcuts, or social influences and can affect judgment in various contexts, from finance to personal choices. For example, overconfidence can lead investors to take unnecessary risks, while confirmation bias causes individuals to favor information that supports their existing beliefs. Understanding these biases is crucial for improving decision-making, as it helps individuals recognize their thought patterns and adopt more rational approaches to problem-solving.