Josephine is about to graduate from college and is excited about joining her two roommates to start a small coffee shop near campus.She has never started a business before,but she is sure that her business degree has taught her everything she needs to know.The three of them have enough money for their initial costs and figure that they can cover their expenses with the cash flow from the business.Which heuristic is probably involved?
A) representativeness
B) anchoring
C) availability
D) fundamental attribution error
E) overconfidence

Question

Quizplus · Accepted Answer

The heuristic involved is overconfidence, as Josephine believes that her business degree has taught her everything she needs to know about starting a business and is confident about the success of the coffee shop based on their initial funding and projected cash flow. This can lead to underestimating the risks and uncertainties associated with starting a business.

Josephine Is About to Graduate from College and Is Excited