Why do mental shortcuts (heuristics) that served our ancestors well now produce systematic errors in financial decision-making?

Question

Answer

The modern financial environment is very different from the ancestral environment in which the brain evolved.

Answer

Evolution has not had enough time (10–40 thousand years is short in evolutionary terms) to adapt the brain to modern complexity.

Answer

Heuristics were always flawed and never served any useful purpose.

Answer

When heuristics are applied to problems they were not designed for, they produce systematic and predictable errors — behavioral biases.

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