Cognitive Bias & Taxes Review

Sam entered an ice skating competition the weekend of September 8th that had a total of $180 in entry fees. She really wants to go to her friend Zoe’s birthday party that weekend but figures she better go to the competition since her mom already paid the non-refundable entry fees. Which cognitive Bias is at play here?

• Hedonic Adaptation

• Endowment Effect

• Risk Loss Aversion

• Sunk Cost Fallacy

• None of the above

Shawna has been feeling rather down about her life after scrolling through her social media feeds. She feels like she needs to find some more exciting activities. Which cognitive Bias is at play here?

• Hedonic Adaptation

• Overconfidence

• FOMO (Fear of Missing Out)

• Action Bias

• None of the above

The tendency to search for information that supports our preconceptions and to ignore or distort contradictory evidence

• Hedonic Adaptation

• Confirmation Bias

• Risk Loss Aversion

• Sunk Cost Fallacy

• None of the above

Jonathon was cleaning out his closet when he came across his old magic cards. He had forgotten he had them. He decided to look up their value so he could sell them. He discovered that his Copy Artifact was worth $2,200 in Lightly played condition. Instead of selling it, he framed it and put it on his wall knowing full well if he saw it at the store, he would have never paid $2,200 for it! Which cognitive Bias is at play here?

• A. Hedonic Adaptation

• B. Endowment Effect

• C. Risk Loss Aversion

• D. Sunk Cost Fallacy

• E. None of the above

Eric is sure that it helps the elevator doors close faster in his apartment building if he presses the 5th floor button on his elevator over and over again. Which cognitive Bias is at play here?

• A. Hedonic Adaptation

• B. Overconfidence

• C. FOMO (Fear of Missing Out)

• D. Action Bias

• E. None of the above

Mr. Tillman has played tennis on and off with friends and finds that he’s pretty decent at the game due to his excellent hand-eye coordination and general athleticism. He’s convinced that he can beat Mr. Adams. Which cognitive Bias is at play here?

• A. Endowment Effect

• B. Overconfidence

• C. Herd Immunity

• D. Action Bias

• E. None of the above

What fraction of people experience FOMO?

• A. 10%

• B. 35%

• C. 50%

• D. 60%

• E. 75%

What does Ramit Sethi claim 99% of people need to know about dieting?

• Eat low fat and low sugar

• Eat fewer calories, exercise more

• Focus on Carbs - Keto Works great

• His book is on finances, not dieting

Which category of the government receives the smallest portion of US Taxes?

• Health

• Criminal Justice System Operations

• Education and Social Services

• Commerce and Banking

• Veterans Benefits

Which category of the government receives the largest portion of US Taxes?

• National Defense

• Interest on Debt

• Running the Government

• Health

• Social Security