Cognitive Bias Examples

Javier is a part of an online social media group that encourages investing in trending stocks. He always hears about how these stocks are performing really well and wants to invest in some of the stocks that have been mentioned in recent posts.

• Overconfidence

• Hedonic Adaptation

• Confirmation Bias

• Loss Aversion

Suli takes a car out for a test drive and starts to imagine herself as the new owner of the car. When she comes back to the dealership, she is so excited about the car that she is willing to pay over her budget for the car.

• Endowment Effect

• Confirmation Bias

• Sunk Cost Fallacy

• Herd Mentality

Blake’s friends are all going to a music concert. Blake hasn’t saved up enough money to buy the expensive tickets, but he is afraid he’ll miss out on the experience if he doesn’t go. He’s tempted to take out a personal loan to buy the tickets.

• Herd Mentality

• Sunk Cost Fallacy

• Loss Aversion

• FOMO (Fear of Missing Out)

Malik finds himself scrolling on social media and making small, frequent purchases for things he doesn’t really need. He likes the feeling of ordering something and getting it delivered within a few days, but then finds that he keeps coming back for more.

• Overconfidence

• Hedonic Adaptation

• Herd Mentality

• Overconfidence

Naomi is considering taking a gap year after graduating high school to travel and do a coding boot camp. However, she’s doubting her decision because most people from her high school plan to go to a 4-yearuniversity after graduating.

• Confirmation Bias

• Hedonic Adaptation

• Herd Mentality

• FOMO (Fear of Missing Out)

Daniel has heard stories of how people invested in the stock market and lost lots of money when the market crashed. As a result, he’s decided he doesn’t want to invest at all since it seems so risky.

• Loss Aversion

• Hedonic Adaptation

• Sunk Cost Fallacy

• Endowment Effect

Riley is learning about investing in their personal finance class. After learning the basics of stocks and bonds, they feel confident they can pick winning stocks and want to invest half of their savings in stocks they select.

• Loss Aversion

• Confirmation Bias

• Overconfidence

• Sunk Cost Fallacy

Grace and her friends have had a long week and have decided to treat themselves to an expensive meal. Unfortunately, the food isn’t very good but Grace feels like she needs to finish her meal because she already paid for it.

• Loss Aversion

• Endowment Effect

• Hedonic Adaptation

• Sunk Cost Fallacy