Project

About the Lab

Purpose

The Behavioral Bias Lab is an open educational platform designed to make cognitive bias research accessible and visceral. Reading about the anchoring effect is one thing; discovering that a random number genuinely shifted your estimate is another.

Our aim is not to embarrass or trick — it is to illuminate. The biases explored here are not signs of stupidity or irrationality. They are features of a brain that evolved to make fast decisions under uncertainty. Understanding them is the first step toward making better ones.

Behavioral Economics

Behavioral economics emerged in the late twentieth century as a challenge to classical economic theory's assumption of the rational agent. Pioneered by Daniel Kahneman and Amos Tversky, the field demonstrated through careful experimentation that human judgment is systematically influenced by mental shortcuts — heuristics — that are usually helpful but sometimes lead to predictable errors.

Kahneman's 2002 Nobel Prize in Economic Sciences and his bestselling book Thinking, Fast and Slow brought this research to broad public attention. Today, insights from behavioral economics inform public policy, healthcare design, financial regulation, and product development worldwide.

The Four Biases

Anchoring & Adjustment

Tversky & Kahneman, 1974

When forming a numerical estimate, people start from an initial value — the "anchor" — and adjust insufficiently. Even arbitrary anchors (a random wheel-of-fortune number) significantly shift subsequent estimates. This affects salary negotiations, medical diagnoses, and legal sentencing.

The Framing Effect

Tversky & Kahneman, 1981

Logically equivalent information presented in different frames produces different choices. The classic "Asian Disease Problem" shows that the same program—saving 200 of 600 lives, or letting 400 of 600 die—is viewed very differently depending on whether the outcome is described in terms of lives saved or lives lost.

Loss Aversion

Kahneman & Tversky, 1979

Prospect Theory established that losses feel approximately twice as painful as equivalent gains feel pleasurable. This asymmetry explains the endowment effect, status quo bias, and the common reluctance to sell losing investments. It is one of the most replicated findings in psychology.

The Overconfidence Effect

Lichtenstein, Fischhoff & Phillips, 1982

People routinely overestimate the accuracy of their knowledge. When subjects say they are "99% certain," they are correct about 80% of the time. This miscalibration — overconfidence — is especially pronounced in domains where feedback is delayed, rare, or ambiguous, including medicine, law, and finance.