When individuals have uncertainty about a specific product or idea, they will often look to what their peer group is doing to help them decide. Social proof is a behavioural bias that can lead to decision making errors. By embracing a process-driven research flow to guard against behavioural biases and data peeking, Viewpoint can distinguish between true and false alpha.
Tag: Behavioural Bias
Superforecasting: The Art and Science of Prediction
Making predictions and forecasting the future are integral parts of everyday life, yet it’s unlikely individuals realize the amount of predictions one makes in a day. The use of heuristics or “rules of thumb” are ingrained in human psychology and help people quickly determine courses of action with limited information at their disposal. Deciding what…
Are There Ever Good Behavioural Biases?
Behavioural biases and the effect of human psychology on rational decision making is a topic often discussed in investment management. Both retail and institutional investors are impacted by their psychological wiring, but most of the time the discussion centers around how investors can mitigate the impact of negative behavioural biases on their investment decision making….