1. (Behavioral Biases and Beliefs) Kahneman and Reipe (1998) point out that merely learning about cognitive biases does not eliminate them. The goal is to develop the skill of recognizing situations in which a particular error is likely. As a step toward developing this skill, please give a new example of each of the three phenomena listed below. (New example means do not use examples found in the lectures, although these may be helpful as a starting point.) Draw at least two of your three examples in financial or investment settings. For ease of grading, please discuss them in the order below. (two or three sentences each)

a. Availability

b. Local representativeness

c. Overconfidence