Negativity bias and its negative impact on investments
Posted on 15.03.2024Not all investors may be aware that the human tendency to pay more attention to negative news than to positive news is known in behavioural economics (including behavioural finance) as negativity bias. But what are its implications and how can its risks be avoided? The negativity bias The negativity bias is a cognitive distortion that leads people to give more weight to negative information than to positive information. The reasons for this automatism are evolutionary: those who paid more atte ...
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