People use shortcuts to make decisions to efficiently deal with a large volume of information. Linear thinking is one shortcut and it contributes to exponential growth bias which means underestimation of exponential growth values. This study examined differences in exponential growth bias in the context of the stock market and COVID-19 cases. Moreover, this research analyzed correlation between exponential growth bias and worry for health and for the economy in the contexts of COVID-19 and stock market. A total of 120 participants completed an online survey in which they were randomly assigned to the COVID-19 or stock market group. A 2 x 3 repeated measures ANOVA showed no significant differences depending on the group. Moreover, ANOVA showed that bias increased in line with the increase in the percentages analyzed for both groups. Exploratory Pearson analysis showed that there was a significant negative correlation between worry for the economy and exponential growth bias of 15% and 40% growth scenarios in COVID-19 group. There were no significant correlations between worry for the economy or health in the stock market group. The conclusion is that people use shortcuts which leads them to biased decision- making. For example, when calculating exponential values, people think linearly and it leads them to exponential growth bias, what in practice results in estimating values lower than they are. Interventions, as education with aim to reduce exponential growth bias are proposed for the future research.
| Identifer | oai:union.ndltd.org:UPSALLA1/oai:DiVA.org:su-198118 |
| Date | January 2021 |
| Creators | Englund, Kristina |
| Publisher | Stockholms universitet, Psykologiska institutionen |
| Source Sets | DiVA Archive at Upsalla University |
| Language | English |
| Detected Language | English |
| Type | Student thesis, info:eu-repo/semantics/bachelorThesis, text |
| Format | application/pdf |
| Rights | info:eu-repo/semantics/openAccess |
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