Personal Finance

Front

Endowment Effect

Back

The tendency to put more value on things you already own

Front

Hedonic Adaptation

Back

The tendency to return to a baseline level of happiness regardless of whether you go through a positive or negative experience or event

Front

Herd Mentality

Back

The tendency to conform to the behaviors and beliefs of the people around you

Front

Overconfidence Bias

Back

The tendency people have to be more confident in their own abilities

Front

Overnight Test

Back

A strategy used to combat loss aversion by imagining that overnight something you own has been replaced with cash, then determining whether you would prefer to keep the cash or buy the item back

Front

Overprecision

Back

When a person has an exaggerated certainty that an answer is correct

Front

Sunk Costs

Back

Costs that have already been incurred and cannot be recovered.