Economics Cognitive Biases Questions
The illusion of consensus refers to the tendency of individuals to overestimate the extent to which their beliefs, attitudes, and behaviors are shared by others. In the context of economics, this cognitive bias can affect economic choices by influencing individuals to conform to perceived societal norms or majority opinions, even if those choices may not be in their best economic interest. This bias can lead to herd behavior, where individuals follow the crowd rather than making independent and rational economic decisions. Additionally, the illusion of consensus can hinder innovation and the exploration of alternative economic strategies, as individuals may be reluctant to deviate from the perceived consensus.