Human cognitive biases
Familiar cognitive errors that afflicted everyone: investors, home buyers, lenders, regulators.
The analysis in this section draws on Megan McArdle's blog post on  The Atlantic.com: "How did it all happen?"
CONTEXT(Help)
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The Global Financial Crisis »The Global Financial Crisis
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Long-term causes of the financial crisis? »Long-term causes of the financial crisis?
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Human cognitive biases
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Forms of human cognitive bias? »Forms of human cognitive bias?
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Homebuyers saw rising house prices as natural order »Homebuyers saw rising house prices as natural order
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Investors underweighted systemic risk »Investors underweighted systemic risk
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Lenders overconfident in their ability to manage risk »Lenders overconfident in their ability to manage risk
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Regulators overestimated their powers of insight and response »Regulators overestimated their powers of insight and response
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Cognitive Biases are constant »Cognitive Biases are constant
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House price bubble in the US »House price bubble in the US
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Credit-rating agencies underestimated risks »Credit-rating agencies underestimated risks
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