Recency Bias: why we believe recent events will occur again soon.

Bite-size: People incorrectly believe that recent events will occur again soon. This is called recency bias.

Full-size:
How this works: A consumer is choosing between insurance providers. Insurer X offers standard coverage but prominently features flooding events in their ad. Insurer Y offers the same coverage at a lower price showing a mix of covered events. Guided by rational decision-making, the consumer would choose Y, the better price. But we don't make decisions like this rationally (more on that later). In this scenario, the consumer chooses X instead because, as recency bias suggests, since flooding has been a big part of US news lately, Insurer X is more appealing.

Unless it’s a BIG personal, ethical, or moral decision, your customers are making instinctive, lightning-quick decisions when evaluating, judging, remembering and ultimately purchase a brand or product. It is human nature to form biases—shortcuts to quicker thinking. Sometimes that's beneficial sometimes it's not. Marketers, consider what biases might be in play and use them to your advantage.

Why are we so irrational? Well, to act according to perfect rationality would require us not to be influenced by any cognitive biases, to be able to access all possible information about potential alternatives, and to have enough time to calculate the pros and cons of each. But since we are only human after all, it is nearly impossible to satisfy all these factors. This is referred to as bounded rationality, which explains why humans do not make decisions that are perfectly rational. So, instead of striving to make the “best” choices, we often settle on making merely satisfactory choices.