Slides 20-23 in the presentation Efficiency discusses many different types of bias and fallacies according to Behavior Finance. Please choose and explain 3 (and only 3) that you think apply to economics, finance, and investment so far in 2020.

Bias and fallacies Investor Overconfidence - investor overestimates his/her abilities to value or trade. This leads to a security being mispriced. Overconfidence can also apply to professionals and buy/sell recommendations. It can also apply to portfolio managers and even regulators. . Representativeness - the assumption that good companies are good investments Herding Behavior trading occurs in clusters, with one following another non rationally. Not necessarily driven by information. Anchoring - investors rely too much on pre-existing information or the first piece of information they were exposed to. Think of buying a house or a car, the first one seen sets the price expectation Narrative fallacy - there are limits to our ability to evaluate information objectively. A good story can distort the facts and the ability to make a rational decision Confirmation bias tendency of investors/people to pay closet attention to information that confirms their believe/position. Self serving bias tendency to attribute positive outcomes to an individual's skill and bad outcomes to luck or circumstances outside his/her control Hindsight bias idea that after the fact, the investor actually knew he/she was right. It often implies a level of arrogance, the person has a special talent or is more intelligent/insightful Representativeness heuristic similar events or circumstances clouds thinking regarding the probability of an outcome. It is common for investors to assume 2 things/events/people/trends/pieces of data are more similar than they actually are Framing bias investors mistakenly judge and make a decision based on how information is presented, not the facts themselves Ad Hominem - judging something based on who presents the information as opposed to the merits of the information . Overconfidence bias - overestimating our own knowledge, skills, ability and/or experience. . Gamblers fallacy - recent results investors estimates of future probabilities. Think about Los Vegas and slot machines... . Mental Accounting - imagining different investments as different accounts and classifications as opposed to one portfolio Conservatism - investors react too slowly to change . Disposition effect - inability to take a loss, or too slow to see a bad position. Throwing good money after bad...but recognizing gains is easier . Narrow framing - seeing events in isolation, such as 2020 and Fed policy