We get more attention to what we hear, observe, and talk about first, and that work as a belief creator among us. This bias is known as the primacy effect. That’s defined by the well-known saying – “first impression is the last impression”.
The primacy effect is not always the culprit; the contrasting recency effect matters as well. The more recent the information, the better we remember it. This occurs because our short-term memory file drawer, as it were, contains very little extra space. When a new piece of information gets filed, an older piece of information is discarded to make room.
Investment – First and last both Impression matters so that when we read annual reports, many companies make it attractive to create a first impression. Later on, they try to hide the truth between the first and last impressions. We have to be very careful while we read any information rather than get biased with primacy or recency effects.
This entire series will be reviewed with various examples from books which are “Thinking, Fast and Slow” and “The Art of Thinking Clearly“.