Studying Method- Behavioral Finance

[LexLuther]

Hi All,
I have read the Behavioral Finance section and for the most part understand the different biases. The problem I am having is deciphering the biases from the examples given in a question. My background is finance and accounting and this psychology type concepts are harder for me to get a grip on. What is the best way to attack/master this subject? I know this is a big portion on the AM writing section and I want to know what the best way to understand and execute on the exam.
Thanks in advance!

 

[GothamSenator]

Here’s Schweser’s advice, I think it’s helpful.
Cognitive Biases
1. Conservatism => think “initial information is maintained”
2. Confirmation => think “evidence is sought to support view”
3. Representativeness => think “new evidence is classified based on past classifications”
4. Illusion of Control => think “believe they can influence results”
5. Hindsight => think “selective memory”
6. Anchoring & Adjustments => think “overly simplistic heuristic depens on initial reference point”
7. Mental Accounting => think “ignores that money is fungible, and treats it differently depending on categorization”
8. Framing => think “answer depends on how data is presented”
9. Availability => think “ease of recallL
Emotional Biases
10. Loss Aversion => think “feeling more pain from loss than pleasure from corresponding gain”
11. Overconfidence => think “excessive opinion of your ability to be correct”
12. Self-Control => think “lacking self-discipline”
13. Status-Quo => think “confort with what exists”
14. Endowment => think “overvalue what you own”
15. Regret-Aversion => think “avoid making a mistake”

 

[LexLuther]

Thanks!