Ch1 Financial Attitudes and Behaviors

Front

Describes the common human tendency to rely too heavily on the first piece of information offered (the "anchor") when making decisions.

Back

Anchoring Effect

Front

What does BNPL stand for in the context of installment loans?

Back

Buy Now, Pay Later

Front

The way a particular person understands events, facts, and other people, based on their own set of beliefs and experiences and may not be reasonable or accurate.

Back

Cognitive Biases

Front

The ability to delay an impulse for an immediate reward to receive a more favorable reward later.

Back

Delayed Gratification

Front

Describes a circumstance in which an individual places a higher value on an object that they already own than the value they would place on that same object if they did not own it.

Back

Endowment Effect

Front

The tendency of the people in a group to think and behave in ways that conform with others in the group rather than as individuals.

Back

Herd Mentality

Front

A mental shortcut commonly used to simplify problems and avoid cognitive overload.

Back

Heuristics

Front

The temptation, and resulting tendency, to forego a future benefit to obtain a less rewarding but more immediate benefit.

Back

Immediate Gratification

Front

People tend to adopt certain behaviors, styles, or attitudes simply because others are doing so.

Back

Joining the Cause Effect

Front

A cognitive bias that describes why, for individuals, the pain of losing is psychologically twice as powerful as the pleasure of gaining.

Back

Loss Aversion