Recency bias is a

cognitive bias A cognitive bias is a systematic pattern of deviation from norm or rationality in judgment. Individuals create their own "subjective reality" from their perception of the input. An individual's construction of reality, not the objective input, m ...

that favors recent events over historic ones; a

memory bias Cognitive biases are systematic patterns of deviation from norm and/or rationality in judgment. They are often studied in psychology, sociology and behavioral economics. Although the reality of most of these biases is confirmed by reproducible re ...

. Recency bias gives "greater importance to the most recent event", such as the final lawyer's closing argument a jury hears before being dismissed to deliberate. Recency bias should not be confused with

anchoring An anchor is a device, normally made of metal , used to secure a vessel to the bed of a body of water to prevent the craft from drifting due to wind or current. The word derives from Latin ''ancora'', which itself comes from the Greek ἄγ ...

confirmation bias Confirmation bias is the tendency to search for, interpret, favor, and recall information in a way that confirms or supports one's prior beliefs or values. People display this bias when they select information that supports their views, ignoring ...

. Recency bias is related to the

serial-position effect Serial-position effect is the tendency of a person to recall the first and last items in a series best, and the middle items worst. The term was coined by Hermann Ebbinghaus through studies he performed on himself, and refers to the finding that re ...

known as the

recency effect Serial-position effect is the tendency of a person to recall the first and last items in a series best, and the middle items worst. The term was coined by Hermann Ebbinghaus through studies he performed on himself, and refers to the finding that r ...

. It is not to be confused with

recency illusion The recency illusion is the belief or impression that a word or language usage is of recent origin when it is long-established. The term was coined by Arnold Zwicky, a linguist at Stanford University primarily interested in examples involving wor ...

, the belief or impression that a word or language usage is of recent origin when in reality it is long-established.

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 The halo effect (sometimes called the halo error) is the tendency for positive impressions of a person, company, brand, or product in one area to positively influence one's opinion or feelings in other areas. Halo effect is “the name given to t ...

. In

psychology Psychology is the scientific study of mind and behavior. Psychology includes the study of conscious and unconscious phenomena, including feelings and thoughts. It is an academic discipline of immense scope, crossing the boundaries betwe ...

, 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 An investor is a person who allocates financial capital with the expectation of a future return (profit) or to gain an advantage (interest). Through this allocated capital most of the time the investor purchases some species of property. Type ...

into not accurately evaluating

economic cycles Business cycles are intervals of expansion followed by recession in economic activity. These changes have implications for the welfare of the broad population as well as for private institutions. Typically business cycles are measured by examini ...

, causing them to continue to remain invested in a

bull market A market trend is a perceived tendency of financial markets to move in a particular direction over time. Analysts classify these trends as ''secular'' for long time-frames, ''primary'' for medium time-frames, and ''secondary'' for short time-fram ...

even when they should grow cautious of its potential continuation, and refrain from buying assets in a

bear market A market trend is a perceived tendency of financial markets to move in a particular direction over time. Analysts classify these trends as ''secular'' for long time-frames, ''primary'' for medium time-frames, and ''secondary'' for short time-fram ...

because they remain pessimistic about its prospects of recovery.

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.

Lists of superlatives A ''list'' is any set of items in a row. List or lists may also refer to: People * List (surname) Organizations * List College, an undergraduate division of the Jewish Theological Seminary of America * SC Germania List, German rugby unio ...

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.

Sports betting Sports betting is the activity of predicting sports results and placing a wager on the outcome. The frequency of sports bet upon varies by culture, with the vast majority of bets being placed on association football, American football, basket ...

is also impacted by recency bias."The Five Biggest Cognitive Biases that Impair Most Sports Bettors", Jeff Ma, November 12, 2014, ''ESPN''
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Occurrences

See also

References

Further reading