Recency bias

For the serial-position effect, see Recency effect. For the linguistic phenomenon, see Recency illusion.
Compare recentism, which overlaps.

Recency bias is a cognitive bias that favors recent events over historic ones; a memory bias. Recency bias gives "greater importance to the most recent event",[1] such as the final lawyer's closing argument a jury hears before being dismissed to deliberate.

Recency bias should not be confused with anchoring or confirmation bias. Recency bias is related to the serial-position effect known as the recency effect. It is not to be confused with recency illusion, the belief or impression that a word or language usage is of recent origin when in reality it is long-established.

History

Livy, writing in the 1st century BC, described recency bias in his preface to History of Rome:

I have very little doubt, too, that for the majority of my readers the earliest times and those immediately succeeding, will possess little attraction; they will hurry on to these modern days in which the might of a long paramount nation is wasting by internal decay.

— Livy, History of Rome, Preface[2]

Occurrences

It commonly appears in employee evaluations, as a distortion in favor of recently completed activities or recollections, and can be reinforced or offset by the halo effect.[3]

In psychology, primacy bias (excessive focus on earliest events or facts) and recency bias (excessive focus on the most recent events or facts) are often considered together as primacy and recency bias.

Recency bias can skew investors into not accurately evaluating economic cycles, causing them to continue to remain invested in a bull market even when they should grow cautious of its potential continuation, and refrain from buying assets in a bear market because they remain pessimistic about its prospects of recovery.[4]

When it comes to investing, recency bias often manifests in terms of direction or momentum. It convinces us that a rising market or individual stock will continue to appreciate, or that a declining market or stock is likely to keep falling. This bias often leads us to make emotionally charged choices—decisions that could erode our earning potential by tempting us to hold a stock for too long or pull out too soon.[5]

Lists of superlatives such as "Top 10 Superbowls", Greatest of All Time (G.O.A.T.), and sports awards (such as MVP trophies, Rookie of the Year, etc.) all are prone to distortion due to recency bias.[6] Sports betting is also impacted by recency bias.[7]

Since at least 2008,[8] reporters have frequently used the term "the pimp spot" to refer to the last slot in competitions such as American Idol,[8] X-Factor,[9] So You Think You Can Dance,[10] American Song Contest,[11] The Voice,[12][13] and Dancing with the Stars[14] and sometimes in conjunction with benefits of starting last. There is empirical evidence in academic literature suggesting that participants who performed later in major song contests, including Eurovision and New Wave (when the order of performances was randomized), were ranked higher.[15]

See also

References

  1. ^ Use Cognitive Biases to Your Advantage, Institute for Management Consultants, #721, December 19, 2011
  2. ^ "From the Founding of the City/Preface - Wikisource, the free online library". en.wikisource.org. Retrieved 2024-10-20.
  3. ^ Recency Bias: Overview, Oxford Reference
  4. ^ "Tomorrow’s Market Probably Won’t Look Anything Like Today", Carl Richards, New York Times, February 13, 2012
  5. ^ "Is Recency Bias Influencing Your Investing Decisions?", Portfolio Management, August 18, 2016, Charles Schwab
  6. ^ "NBA MVP Voting: How Playing on the West Coast and Late-season Surges Affect the Race", Harvard Sports Analysis Collective, May 1, 2015
  7. ^ "The Five Biggest Cognitive Biases that Impair Most Sports Bettors", Jeff Ma, November 12, 2014, ESPN
  8. ^ a b "Have the 'American Idol' Producers Turned Against David Archuleta?" Vulture, 14 May 2008.
  9. ^ Shirley Halperin. "‘X Factor’: How Astro Got Eminem’s Permission to Alter His Song, Plus 9 More Burning Questions Answered", The Hollywood Reporter, 10 November 2011.
  10. ^ Rebecca Iannucci. "SYTYCD Performance Finale Recap: Who Will (and Should) Win Season 14?", tvline.com, 18 September 2017.
  11. ^ Lyndsey Parker. "Despite a Michael Bolton performance, 'American Song Contest' fails to fulfill its campy (Euro)vision" aol.com / Yahoo! Entertainment, 21 March 2022.
  12. ^ Amanda Bell. "The Voice recap: 'Live Top 12 Performances'" Entertainment Weekly, 20 November 2017.
  13. ^ Charlie Mason. "The Voice Recap: Whitney Houston, the Top 8 Have a Problem… or Do They?" tvline.com, 5 December 2022.
  14. ^ Annie Barrett. "Dancing with the Stars season premiere recap: Will You Accept This Pose?" Entertainment Weekly, 19 March 2013.
  15. ^ Antipov, Evgeny A; Pokryshevskaya, Elena B (2017). "Order effects in the results of song contests: Evidence from the Eurovision and the New Wave". Judgment and Decision Making. 12 (4). Cambridge University Press: 415–419. doi:10.1017/S1930297500006288.

Further reading