Frugal Friends Podcast
How Cognitive Biases Cause us to Overspend with Amanda Montell
Apr 12, 2024
Amanda Montell, author and podcast host, discusses cognitive biases and how they impact our finances and everyday lives with the hosts. They explore impulsive spending behaviors, the role of biases in decision-making, the pitfalls of overconfidence bias, the cult of consumerism, and the influence of societal status on financial choices.
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Quick takeaways
- Understanding cognitive biases like confirmation bias and sunk cost fallacy can improve decision-making in finances and personal life.
- Embracing Shine Theory counters zero sum bias by promoting collaboration and support among women.
Deep dives
The Impact of Cognitive Biases on Decision Making
Cognitive biases, such as confirmation bias and the sunk cost fallacy, influence decision-making in various aspects of life. These mental shortcuts, once beneficial in early human brains, can now hinder decision-making due to information overload in the digital age. Understanding and identifying these biases can lead to improved decision-making, whether in financial choices or personal relationships.
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