Behavioural biases - Riddle me this...

When I was at university my favourite subject from a finance perspective was 'behavioural finance'. It consisted of all the irrational things 'rational investors' do. I'll list the top 3 biases that I found most fascinating. I'm probably guilty of them too at times.

Greater fool theory - this was under the premise that sometimes we buy things knowing they are overvalued as investments but we hope some other 'fool' will buy it off us because this market is hooooooot! Can this be applied to the housing market? I'll let you guys decide...

Confirmation bias - This is one we have all experienced. How many times have you been sure you know what's up and you will look for sources that ONLY confirm your view/thoughts. "Is bitcoin going to $100,000?" You won't have to look very hard to find articles that agree with this while many are sceptical. The point however is you will look for articles to 'confirm' your view. This could be just to give you confidence in your belief and reinforce the fact that it's correct. If you post that in a Bitcoin fanboy/fangirl forum watch it explode as it might be even called out to be worth $10000000 and some will still call it undervalued... Errr

Framing - this one is my most favourite bias to see. You see it everywhere! There was a study conducted by Tversky and Kanheman (1981) as per below:

Participants were asked to choose between two treatments for 600 people affected by a deadly disease. This choice was then presented to participants either with positive framing, i.e. how many people would live, or with negative framing, i.e. how many people would die.

Source - Wikipedia

Results - Treatment A was chosen by 72% of participants when it was presented with positive framing ("saves 200 lives") dropping to only 22% when the same choice was presented with negative framing ("400 people will die").
Wuuuuuuut?

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