Hindsight bias and Hire purchase: Difference between pages

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imported>Doug Williamson
(Create page. Sources: The Treasurer, April 2020, p08, Investopedia https://www.investopedia.com/terms/h/hindsight-bias.asp)
 
imported>Doug Williamson
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''Self management and accountability - working effectively with others - cognitive bias''.
(HP).


Hindsight bias is the systematic tendency to retrospectively characterise events as more foreseeable than they actually are.
Hire purchase is similar to a finance lease except that it contains a provision giving the hirer an option to acquire legal title to the asset (once certain contract provisions are fulfilled).  


This leads to individuals overestimating their ability to forecast future events.
A mechanism for gaining the benefits of owning an asset without paying the whole of the purchase price at the outset, but over a period of time.


It is an important failing in poor risk management decisions, and poor investment decisions.
 
Relevant accounting standards include Section 20 of FRS 102.




== See also ==
== See also ==
* [[Behavioural economics]]
* [[Assets]]
* [[Cognitive bias]]
* [[Finance lease]]
* [[Dunning-Kruger effect]]
* [[FRS 102]]
* [[Objectivity]]
* [[Optimism bias]]
* [[Risk management]]
* [[Self-investment bias]]
* [[Self management and accountability]]
* [[Working effectively with others]]


[[Category:Self_management_and_accountability]]
[[Category:Trade_finance]]
[[Category:Working_effectively_with_others]]
[[Category:Investment]]
[[Category:Identify_and_assess_risks]]
[[Category:Manage_risks]]
[[Category:Risk_frameworks]]
[[Category:Risk_reporting]]

Revision as of 17:01, 10 February 2023

(HP).

Hire purchase is similar to a finance lease except that it contains a provision giving the hirer an option to acquire legal title to the asset (once certain contract provisions are fulfilled).

A mechanism for gaining the benefits of owning an asset without paying the whole of the purchase price at the outset, but over a period of time.


Relevant accounting standards include Section 20 of FRS 102.


See also