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Section Three: fill in the Blank Questions illusion of control ambiguity confirmation bias s curse excessive optimism representativeness House money effect Gambler's F y Self-Attribution error hindsight bias bias Ultimatum availability overcon fid ence home bias framing is a predisposition toward error (examples: excessive .timism. overconfidence. confirmation bias, illusion Of control) Vkople overestimate how frequently they Will experience favor-able KMcomes and underestimate how frequently they will experience unfavorable outcomes (example: delay cost cutting dunng a business recession. leading to lower profits) people make mistakes more frequently than they believe and 3. view thcanselves as than average (example: make interior acquisitions when cash- rich. redxes firm value risk underestimated people attach too much importance to information that supports views relative to information that runs counter to their views (example: ignoring that counter to current vieupovnl. lowers profits delayed Africa just tossed a three times and got heads every time. She thinks i! i likely that an people thc Which they control overestimating of 9. people overweight infonnation that is readily available and intuitive relative to information that is less salient and bstrxt. biasing judgements (example: Wrong based biased reduces firm value or misjudgaf priorities and risks) form an estimate by with n and 10 reflect infonntion they tend to make insufficient adjustments relative to that nunvber. thereby leading to anchoring bias (example: become fixated on a numiRT msuffKiendy) basing primarily inetirut. and gut relying on instead of analysis. value tvcause NPV ptoyeets a person's are by in 3. Winning bid in an in 14. Annie won in Vcgav i. of