The Brain Game The purpose of this assignment is to introduce you to the well-known scientific fact that humans do not make decisions rationally. Most of the time, decisions are made without people even realizing the why behind their decisions. Our decisions are often driven by our own biases instead of logic or good judgement. These numerous poor instincts are called cognitive biases. It is important to identify cognitive biases in Personal Finance because they cause so many of the common financial errors in our society. Google defines these as follows: Cognitive biases are tendencies to think in certain ways that can lead to systematic deviations from a standard of rationality or good judgment, and are often studied in psychology and behavioral economics. This is one reason why in personal finance, learning the tools tends to be much easier than applying them. First, find a list of cognitive biases online. Second, pick four cognitive biases that are related to personal finance. Third, fill out the details below for each one. 1.a. Name(s) of the bias:______________________________________________ 1.b. Definition of this bias: ____________________________________________________________________________ ____________________________________________________________________________ ____________________________________________________________________________ ____________________________________________________________________________ 1.c. Example of how this bias affects personal finance decisions: ____________________________________________________________________________ ____________________________________________________________________________ ____________________________________________________________________________ ____________________________________________________________________________ ____________________________________________________________________________ ____________________________________________________________________________ ____________________________________________________________________________ ____________________________________________________________________________ 1.d. Products or services that attempt to correct this bias: ____________________________________________________________________________ ____________________________________________________________________________ ____________________________________________________________________________ ____________________________________________________________________________ ____________________________________________________________________________ 2.a. Name(s) of the bias:______________________________________________ 2.b. Definition of this bias: ____________________________________________________________________________ ____________________________________________________________________________ ____________________________________________________________________________ ____________________________________________________________________________ 2.c. Example of how this bias affects personal finance decisions: ____________________________________________________________________________ ____________________________________________________________________________ ____________________________________________________________________________ ____________________________________________________________________________ ____________________________________________________________________________ ____________________________________________________________________________ ____________________________________________________________________________ ____________________________________________________________________________ ____________________________________________________________________________ ____________________________________________________________________________ 2.d. Products or services that attempt to correct this bias: ____________________________________________________________________________ ____________________________________________________________________________ ____________________________________________________________________________ ____________________________________________________________________________ ____________________________________________________________________________ 3.a. Name(s) of the bias:______________________________________________ 3.b. Definition of this bias: ____________________________________________________________________________ ____________________________________________________________________________ ____________________________________________________________________________ ____________________________________________________________________________ 3.c. Example of how this bias affects personal finance decisions: ____________________________________________________________________________ ____________________________________________________________________________ ____________________________________________________________________________ ____________________________________________________________________________ ____________________________________________________________________________ ____________________________________________________________________________ ____________________________________________________________________________ ____________________________________________________________________________ ____________________________________________________________________________ ____________________________________________________________________________ 3.d. Products or services that attempt to correct this bias: ____________________________________________________________________________ ____________________________________________________________________________ ____________________________________________________________________________ ____________________________________________________________________________ ____________________________________________________________________________ 4.a. Name(s) of the bias:______________________________________________ 4.b. Definition of this bias: ____________________________________________________________________________ ____________________________________________________________________________ ____________________________________________________________________________ ____________________________________________________________________________ 4.c. Example of how this bias affects personal finance decisions: ____________________________________________________________________________ ____________________________________________________________________________ ____________________________________________________________________________ ____________________________________________________________________________ ____________________________________________________________________________ ____________________________________________________________________________ ____________________________________________________________________________ ____________________________________________________________________________ ____________________________________________________________________________ ____________________________________________________________________________ 4.d. Products or services that attempt to correct this bias: ____________________________________________________________________________ ____________________________________________________________________________ ____________________________________________________________________________ ____________________________________________________________________________ ____________________________________________________________________________