THE HAZARDS OF IRRATIONAL DECISION-MAKING: A COMPREHENSIVE REVIEW OF COGNITIVE BIASES AND RISKS

Аннотация

This comprehensive review examines the hazards of irrational decision-making, focusing on the cognitive biases and risks that influence human choices. Despite advancements in decision theory, individuals frequently make choices that deviate from rationality due to various psychological and cognitive biases. The review explores key biases, including confirmation bias, anchoring bias, overconfidence, and loss aversion, and investigates how these cognitive distortions affect decision-making processes in both personal and professional contexts. Additionally, the review delves into the consequences of these irrational choices, such as suboptimal decision outcomes, economic inefficiencies, and social implications. By synthesizing findings from behavioral economics, psychology, and neuroscience, the paper highlights the mechanisms behind irrational decision-making and proposes strategies for mitigating its effects. The goal is to offer a deeper understanding of how cognitive biases shape human judgment and provide insights for improving decision-making through awareness and intervention. KEYWORDS Irrational decision-making, Cognitive biases, Decision theory, Confirmation bias, Anchoring bias, Overconfidence, Loss aversion, Behavioral economics, Psychological influences.