as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.
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explain the concept of cognitive biases.
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cognitive biases are systematic errors in thinking that lead us to make irrational decisions or come to incorrect conclusions. they can be caused by a variety of factors, such as our limited ability to make decisions or our tendency to rely on intuition rather than reasoned arguments. common cognitive biases include confirmation bias, which leads us to seek out information that confirms our existing beliefs, and the sunk cost fallacy, which leads us to continue investing in something even when it is no longer beneficial. research has shown that cognitive biases are ubiquitous and can lead to a range of problems, from poor decision making to improper risk assessments.
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