COGNITIVE INFORMATION PROCESSING BIASES: IMPLICATIONS FOR PRODUCERS AND USERS OF FINANCIAL INFORMATION

The emerging judgment and decision‐making literature indicates that individuals use heuristic procedures that simplify cognitive processing requirements. Judgments (particularly subjective probabilities) are based on limited processing of a proper subset of the available evidence. Tasks potentially calling for complex analysis are reduced to heuristic procedures and efficient information processing may result; these heuristics can, however,...