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Focusing effect

Description

A cognitive bias that occurs when people place too much importance on one aspect of an event, causing an error in accurately predicting the utility of a future outcome.

Example 1:

A company might overly focus on reducing manufacturing costs for a new product, neglecting the impact this might have on product quality and long-term customer satisfaction.

Example 2:

When considering a new office location, a company might focus too much on the prestige of the address, underestimating the impact of a longer commute for employees on morale and productivity.