标题: Paraguay: Difference between Anchoring and Status Quo Bias? [打印本页] 作者: Zesty 时间: 2011-7-13 15:22 标题: Paraguay: Difference between Anchoring and Status Quo Bias?
My understanding is Anchoring the analyst puts too much emphasis on the first information or the first forecast that was made leading to failure to *fully* incorporate changing conditions; while
Status Quo Bias is to stick with original assumptions/forecast regardless of changing condition.
However, there are many times where I was wrong in the practice exams (i.e. Anchoring when an analyst still sticks to its forecast even when there was a changing condition) and I still don't know whether there are any clear cut rules.
Anyone?
Edited 1 time(s). Last edit at Wednesday, June 1, 2011 at 07:19PM by Eazy E.作者: Valores 时间: 2011-7-13 15:22
I would say:
- Anchoring: refers to the pricing of those asset (through capital market expectations)
- Status Quo Bias: refers more to the allocation of those assets.
anyone concur? or am i speaking out of my ass?作者: mik82 时间: 2011-7-13 15:22
anchoring and bayesian rigidity and the 2 that really mess me up.
I think of anchoring as not fully adjusting, bayesian rigidity as not adjusting at all, status quo as a tendency not to change.
I also think of anchoring and bayesian rigidity as things analysts do in their forecasts and status quo as something defined contrib plan participants do (401k allocation - set it and forget it).作者: bpdulog 时间: 2011-7-13 15:22
status quo : bias to maintain the same ole same ole.............we believe apple will continue to grow ust as it always does
anchoring : bias to give credence to first piece of research analysis: well first paper i read said apple is overpriced so im sticking with that forecast作者: Windjammer 时间: 2011-7-13 15:22
status quo is more related to tempering your forecast specifically to not deviate from the pack too much... think of sheep herding and a black sheep trying to conceal its true colors 作者: Unforseen 时间: 2011-7-13 15:22
your definition for status quo is actually anchoring
to give you a hint: status quo is part of the DC pension plan biases and in data analysis traps. F.e. when employees stick with their original allocation even though new funds are added (or want to constant mix them on calendar year rebalancing). Or an analyst says last summer was hot, lots of ice sales, this summer starts hot, so there will be a lot of ice sales.
Anchoring would be: summer is a lot of ice sales but even though this summer is rainy, I still think there is a lot of ice sales.
anchoring is a more present over the curriculim. one key example would be if the analyst receives new information but only revises his old forecast by 10% of the impact of this information.
status quo is more like "happened last time, will happen this time, too".
A basic difference would be to me, that status quo does NOT need new information, if you simply "draw the graph further in its current direction" would be status quo.
And yes, there are no easy cut rules, but usually CFAI will ask only non-overlapping concepts in the available answers (as is promised by Schweser)
hopefully paraguay will sanction this ;-)作者: Windjam 时间: 2011-7-13 15:22
mpr4437 Wrote:
-------------------------------------------------------
> status quo is more related to tempering your
> forecast specifically to not deviate from the pack
> too much... think of sheep herding and a black
> sheep trying to conceal its true colors
no this is the prudence trap
please lets all go reread vol 1作者: skycfa 时间: 2011-7-13 15:22
Yeah my clear cut rule right now is "information received"?
=-(
Need a confirmation. Thanks guys!
PS - there was a question in the Schweser practice exam I did a while ago where the trend of a stock was going up despite what the fundamentals say and even the most optimistic forecaster thinks its overbought.
I put ebullience cycle for that and it turns out to be Represenativess. Ugh...
Edited 1 time(s). Last edit at Wednesday, June 1, 2011 at 07:34PM by Eazy E.作者: NakedPuts2011 时间: 2011-7-13 15:22
^^ same here....i said herding mentality as it relates to ebulence cycle. They say representativeness....pointed to "trend will continue" as the indicator that it was representativeness that the past would continue.作者: aidebaobao 时间: 2011-7-13 15:22
representativeness making judgements based on sterotype ..................oh a stock that goes up will continue going up作者: susana 时间: 2011-7-13 15:22
The behavioral finance stuff is a pain. It might help to know that the material was written by a few different authors, hence the cross over terms and different meanings. It's hard to keep all of this stuff in your head at once, but hopefully the real questions will be presented in a fairly straight forward manner. The past exam questions on this aren't that bad and typically list a number of behaviours and ask you to circle and justify rather than identifiy from scratch.
Status quo bias appears twice. From the DC pension perspective, it is that people are just too lazy to change whatever boxes they ticked on day 1 of their employment. This differs from the other use, in psychological traps (i think), where people just assume current events will continue.
Anchoring is more to do with your first opinion on something weighing more heavily despite new information.
One other comment re something above... Representativeness can be thought of as a 'good company' (ie, well managed, socially and ethically responsible, etc) not necessarily representing a 'good investment'.作者: mcmc 时间: 2011-7-13 15:22
I think some of the issue lies in that there are three kinds of "behavioral finance biases": biases, behavioral sources of chronic market inefficiency, and psychological traps of forecasting.
Apparently, according to Schweser (in the "for the exam" box on p. 83 of the Capital Markets Expectations Chapter), if two traps/sources/biases are effectively the same thing and are explained well, the grader will give you full credit.
For instance, Schweser says that the prudence trap can be explained in terms of regret minimization, so long as you articulate your reasoning well. Now, to be safe, what I'd do is list the behavioral characteristic in the context of the question - e.g. if the problem is talking about forecasting, go with the traps.
Specifically for this questions, I think the difference between the status quo bias and anchoring bias is very clear. Status quo bias is not bothering to analyze new information and simply go with your existing forecast because it is easier and counteracts the fear of regret. Anchoring is during the decision making process, you weight information you get first more than information you get later.作者: bkballa 时间: 2011-7-13 15:22
Status quo is giving more weight to resent observations. Market was down last year so it is gong to be down next year.
Anchoring is market crashed in 1929 and now I don't wanna invest anymore because I think it will crash again.
Easy stuff guys作者: Iginla2011 时间: 2011-7-13 15:22
prudence doesn't have a precedent or basis -- just cautious for sake of being cautious
regret-minimization -- has gone through a bad time , wants to avoid further woes
Edited 1 time(s). Last edit at Wednesday, June 1, 2011 at 09:28PM by janakisri.作者: mik82 时间: 2011-7-13 15:22
Prudence is you temper your forecasts down because u don't wanna look like an idiot.
Like if I built a model and it said the Apple stock is going to triple in price next year but everyone is saying it will only move up 10%, I temper my forecast down to say 15%
Edited 1 time(s). Last edit at Wednesday, June 1, 2011 at 09:31PM by JP_RL_CFA.作者: Darien 时间: 2011-7-13 15:22
u right JP , that's the intent in Sample 1 question作者: Windjam 时间: 2011-7-13 15:22
”Anchoring is market crashed in 1929 and now I don't wanna invest anymore because I think it will crash again.“
I think this should be recallability trap.作者: mar350 时间: 2011-7-13 15:22
I think forzajuve got it right. Anchoring is about forecasts, status quo is about allocation of assets.
Forza Inter!作者: nannan66 时间: 2011-7-13 15:22
nailer Wrote:
-------------------------------------------------------
> I think forzajuve got it right. Anchoring is about
> forecasts, status quo is about allocation of
> assets.
>
> Forza Inter!
Sorry please allow me to correct, we have 6 "traps" to remember, all of them are traps of forecast.
Anchoring trap
Status quo trap
Confirming evidence trap
prudence trap
overconfidence trap
recallability trap
while status quo bias is seen in defined contribution pension allocations.作者: lcai 时间: 2011-7-13 15:22
Acronym isn't mine, but for TRAPS think O'CRAPS
I have trouble recalling the R (recalability - how ironic), but it helps that TRaps starts with TR and I start thinking about Arnie in Total RECALL, and if you saw Arnie in a dark ally at night, you really would be going O'CRAP.作者: thommo77 时间: 2011-7-13 15:22
Read the Glossary at the back of CFAI Volume 2:
anchoring trap - the tendency to give disproportionate weight to the first information received.
status quo trap - the tendency for forecasts to perpetuate recent observations
So anchoring favors the first information received while status quo favors the last. It makes sense when you think of the meaning of the status quo. It means the way things are now. So if you have a status quo bias, you think things will not change from the way they are now.
Maybe one way to remember this is to think bothl of these biases will cause your ship to sink. What will hit bottom first? The anchor. Thus anchoring favors the first info received.作者: aidebaobao 时间: 2011-7-13 15:23
Status quo seems to favor not changing views and just keeping the same. Object in motion must stay in motion.
Anchoring puts too much credence in prior views and not enough in current views. Object is in motion but has slowed but will speed back up again.
Representativeness is the opposite of anchoring, imo. Object slowed down, now it is really going to slow down.
Bayesian Rigidity uses same views even in the face of new and very conflicting information. I do not believe that the object has slowed down, even if it did slow down it is temporary.
Edited 1 time(s). Last edit at Thursday, June 2, 2011 at 09:45AM by Paraguay.
