Behavioral EconomicsOriginal Framework
YES Bias
The psychological tendency to overpay for affirmative outcomes and underweight pessimistic scenarios.
EC
Ethan Cho
Chief Investment Officer, TheVentures
What is YES Bias?
Humans exhibit affirmative bias - we want things to happen. At 1-cent prediction market prices:
- YES contracts: -41% expected return
- NO contracts: +23% expected return
- Gap: 64 percentage points
This isn't rational. It's hope beating calculation.
Practical Application
Founders: 'YES, our TAM is $100B. YES, we'll have 10M users in Year 2.'
Taker VCs: Invest based on the YES case.
Maker VCs: Structure around the NO case. Ask: 'What if TAM is 10% of projection? What if growth is 2x instead of 10x? Does the investment still work?' If yes, you're the maker. If it only works when everything goes right, you're paying the YES bias tax.
Data Source
Behavioral economics research + prediction market data
How to Cite
APA: Cho, E. (2026). YES Bias. VentureOracle. https://ventureoracle.kr/concepts/yes-bias
MLA: Cho, Ethan. “YES Bias.” VentureOracle, 2026, ventureoracle.kr/concepts/yes-bias.
TOPICS
YES biasaffirmative biasbehavioral economicsprediction marketsventure capital psychologyoptimism biasEthan ChoTheVentures