The recency effect is a cognitive bias in which more recent information is weighted more heavily than older information, leading to a greater influence on decision-making (Kahneman, 2011). This phenomenon has been extensively studied in the fields of psychology, neuroscience, and economics, and its implications have far-reaching consequences in a variety of situations, such as marketing, sports, and education.
In psychology, the recency effect is often linked to the serial position effect, which states that items at the beginning and end of a list are better remembered than items in the middle (Kahneman, 2011). This is due to the human brain’s tendency to prioritize recent information, which is often viewed as more salient and relevant than older memories. Consequently, the recency effect leads to a greater focus on the last item on a list, which can lead to a biased decision-making process.
In neuroscience, the recency effect has been studied primarily through the use of functional magnetic resonance imaging (fMRI). In an fMRI study conducted by Hsu et al. (2015), participants were shown a series of pictures and asked to remember them in order. Results showed that the brain’s medial temporal cortex was more active when viewing the last picture in the sequence, indicating a stronger focus on the most recent item.
In economics, the recency effect often manifests itself in the form of price floors. When setting prices, businesses tend to base their decisions on more recent information, such as current demand and trends in the market. This can lead to a situation in which businesses are unable to set prices that accurately reflect long-term trends, resulting in inefficient pricing structures.
Overall, the recency effect is an important phenomenon that has implications in many areas, from psychology to economics. It is important for decision-makers to be aware of this bias and make an effort to consider all relevant information when making decisions.
References
Hsu, A. Y., Huang, C. L., & Wang, J. J. (2015). Neural evidence for the recency effect: An fMRI study. Neuroimage, 109, 225–234. https://doi.org/10.1016/j.neuroimage.2014.12.038
Kahneman, D. (2011). Thinking, fast and slow. Farrar, Straus and Giroux.