Authority Bias
Assigning greater weight to an opinion because of who expressed it rather than because of its evidence.
How it is identified
Test: the persuasiveness of a claim rises with the speaker's status, independent of the reasoning offered
Unit
qualitative
In depth
Authority is a reasonable shortcut in domains with reliable expertise and a poor one in markets, where forecasting records are weak even among the credentialed. It is exploited deliberately: unregistered advisers cite credentials, and social media presents follower counts as expertise. In India, SEBI requires investment advisers and research analysts to register, and checking registration is a two-minute step that filters a large amount of noise. The substantive question is always whether the reasoning survives on its own, and a claim that cannot be evaluated without trusting the speaker should be treated accordingly.
Worked example
A widely followed commentator names a target price. Their published record over three years, if anyone compiled it, would be the relevant evidence — and it is almost never compiled, while the following continues to grow.
Illustrative figures, chosen so the arithmetic is easy to follow. Not a live price and not a valuation of any company.
Educational reference only
This entry explains what “Authority Bias” means. It is not investment advice and not a recommendation to buy or sell any security. Any numbers above are illustrative, not live prices, and nothing here predicts price direction or rates a stock. Consider your own circumstances and consult a SEBI-registered investment adviser before acting.