What Is Extension Neglect In Behavioral Economics?

Extension neglect is a phenomenon in which people have a tendency to underestimate the number or quantity of items in a group or collection. This can happen when people focus on individual items in a group, rather than on the group as a whole, and may lead them to underestimate the size or scope of the group. For example, if you are shown a collection of objects and asked to estimate the total number of objects, you may underestimate the number if you focus on individual objects rather than on the collection as a whole. Extension neglect can lead to errors in judgment and decision-making, as it can cause people to underestimate the size or scope of a problem or situation, and to be unprepared for the consequences. To avoid extension neglect, it is important to consider the group or collection as a whole, rather than focusing on individual items, and to carefully evaluate the size or scope of the group before making a decision.

Related Behavioral Economics Terms