MarketAction bias
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Action bias

Action bias is the psychological phenomenon where people tend to favor action over inaction, even when there is no indication that doing so would point towards a better result. It is an automatic response, similar to a reflex or an impulse and is not based on rational thinking. One of the first appearances of the term "action bias" in scientific journals was in a 2000 paper by Patt and Zechenhauser titled "Action Bias and Environmental Decisions", where its relevance in politics was expounded.

Overview
People tend to have a preference for well-justified actions. The term "action bias" refers to the subset of such voluntary actions that one takes even when there is no explicitly good reason to do so. Its opposite effect is the omission bias. Theories Multiple different theories as to why people prefer action over inaction have been suggested. Humans might naturally aspire to act since it is perceived as being most beneficial, even though it can occasionally worsen the outcome of the action. The outcome associated with each action or inaction also affects future decisions, since the link is inevitably and immediately reinforced or punished each time a behavior is carried out; only a neutral outcome does not contribute to learning. Another reason for the existence of the bias might be that people develop the decision heuristic of taking action but then transfer it to an inappropriate context, resulting in action bias. == Real-world effects ==
Real-world effects
In politics In politics, action bias may manifest in performative policy-making. Rather than act on an issue such as global warming, politicians may offer relatively ineffective proposals and implementations. Actions and promises of future actions are not taken primarily to bring about an impactful change, but rather to showcase that one is working on it and progressing. Action bias occurs among patients as well. When equally presented by a physician with the options of either taking medicine or just resting, most patients greatly prefer taking the medicine. This preference prevails even when patients are warned that the medicine could cause certain side effects or when they are explicitly told that there would be no effect in taking the medicine. Causes The causes of intervention bias in medicine are most likely an interplay of two other biases researched in humans: self-interest bias and confirmation bias. Other consequences include incorrect and biased medical advice, and additionally physical harm to the patient and collapse of health care systems. However, this analysis ignores game theory and the dynamics of the sport. Because the penalty spot is only 12 yards away, the goalposts are 24 feet apart, the crossbar is 8 feet high, and the ball will be struck with great force, the goalkeeper cannot stand still and wait for the ball to be struck, because they will not have time to reach it. The ball could go to any of the four corners. To have a chance to make a save, the optimum strategy is to guess the target location and begin moving before the opponent's foot touches the ball. This context negates the claim of bias, because the goalkeeper is expected to put in the visible effort to make a save and actively prevent a goal, rather than arrive too late by waiting for directional certainty. Some penalty takers counter this strategy by rolling or chipping the ball down the middle, which is called a Panenka penalty, after a Czech player who made it famous at the UEFA Euro 1976 final. Action bias is also influenced by previous outcomes. If a team loses a match, the coach is more likely to choose action by changing some of the players, than inaction, even though this might not necessarily lead to a better performance. In economics and management Action bias also influences decision-making in the field of economics and management. In the situations where there is an economic downfall, the central banks and governments experience the pressure to take action, as they feel increased scrutiny from the public. As they are expected to fix the situation, action is seen as more appropriate than inaction. Even if the outcome is not successful, by taking action public figures can avoid criticism more easily. In the cases of good economic performance, the authorities are more inclined towards an omission bias as they do not wish to be accused of making the wrong choices that might destroy the current equilibrium. The action/omission bias can be seen in other similar scenarios such as: investors changing their portfolio, switching a company's strategy, applying for a different job, moving to a different city. At the macro-economic level, the action/omission bias comes into play when discussing changes of politics-related variables, such as interest rates, tax rates and various types of expenditures. In environmental decision-making The effect of action bias in environmental policy decisions has been investigated by Anthony Patt and Richard Zeckhauser. They argued that action bias is more likely to lead to nonrational decision-making in this domain due to uncertainty and delayed effect of actions, contributions coming from many parties, no effective markets, unclear objectives and few strong incentives. The study concluded that the value of a decision is influenced by one's perceived involvement, individual susceptibility for action bias, as well as framing and context, leading to the occurrence of action bias in environmental policies. == Other types ==
Other types
Utility-based The utility-based action bias is a type of action bias that underlies purposive behavior. It works by comparing the advantages of possible effects of different actions and, as a result, it selects the action that will lead to the outcome with the highest utility value. The values of different options are then predicted and compared, and the action with the most chance of reward will be chosen. Advantages of this bias include finding the most beneficial option available in the environment. The main disadvantage is that the subject needs to test the environment through trial and error in order to identify the utility value of each action. For example, Weber found that farmers in the early 1990s who started to worry about the consequences of global warming either changed something in their production practice, their pricing, or lobbied for government interventions. What they generally did not do is engage in more than one of those actions. This again shows that undertaking a single action possibly fulfills one's need to do something; this could prevent further action. Another example of single-action bias is house owners that live in coastal regions that are likely to be flooded due to sea level rise (SLR). They can take small actions by piling resources or making sandbags in case of flooding or bigger actions by taking out flood insurance, elevating their homes or moving into a region that is less at risk for flooding. The first smaller action they take (making sandbags) takes away their anxiety about possible flooding and thereby makes it less likely to take actions that might have a better outcome in the long run, such as moving into another region. An option to eliminate the single-action bias is to have group discussions, in which people suggest different ideas to find a solution. This would give the individual more alternatives to solve the problem. == Elimination ==
Elimination
Awareness of the action bias can help to carefully think about the consequences of inaction versus action in a certain situation. This leads to the process not being as impulsive as before and includes logical thinking which facilitates choosing the most efficient outcome. Inaction, in some situations, can enhance patience and self-control. In medical contexts, full disclosure about the effects of action, especially negative side effects of medication, and inaction during treatment can lead to a lower effect of the action bias. The percentage of people choosing medication goes even lower (10%) when a doctor actively discourages the use of medication. == See also ==
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