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Posts Tagged ‘Confidence’

“Stocks only go up, $TSLA to the moon” — Elon Musk (probably)

December 3rd, 2020 No comments
A graph of $TSLA (Tesla Inc.) stock price going up.

A graph of $TSLA (Tesla Inc.) stock price going up.

I hope that you haven’t put all your life savings on $TSLA after seeing that juicy green graph. Hopefully, you won’t open the Robinhood app on your phone before reading this article. Even if you are one of the teenagers contributing to Robinhood’s 4.3 million daily average trades, I suggest you read this post before you go make another trade from your (or worse, your mom’s) life savings.

Here is a simple game for you. From what you can observe in the graph above, where do you think Tesla stock will go next. Would you buy some stocks? What about if you already had some Tesla stock. Would you hold, buy more, or sell? There is a lot of information missing from the graph, however, this type of graph remains the most important visual information that everyone sees first when. If you are a reader of this blog, you can probably guess that our primate brain isn’t as rational as we would like it to be!

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I’m Not Biased… You Are!

November 26th, 2019 3 comments

Us vs. Them

Think about the last time you immediately doubted someone’s actions or statements. Maybe you thought they were only doing it for their own self-interest. Perhaps they stated a political opinion that opposes your own beliefs, or they agreed to complete a survey but only to be compensated with money, at least that’s why you think they did it. Let’s say you and a fellow classmate were talking about whether the new $200 million Colby College athletic complex is reasonable. You say no! The college could spend that money on so many other more beneficial things. However, your classmate says they are all for the new athletic center. You know they’re part of an athletic team so you think to yourself, “Yeah you’re in favor of it because you’re on a team and it would benefit you.” But did you actually take time to think about that person’s reasoning or did you just assume that they were biased and believe that you were the one being objective in the situation? We all may not be aware of it, but we usually expect others to have more personal bias and believe that we are able to judge situations objectively even though that may not be the case, and this is called naïve cynicism. Although this bias may seem really similar to naïve realism, they have some differences. The cognitive bias of naïve realism is the belief that a person can view the world objectively, and so can all the other people who agree with them and are “reasonable”, in their opinion. Naïve realism states that people believe everyone else who disagrees with them can’t help being subjective because they are all biased. Both of these biases are also clearly related to the bias blind spot, which is a phenomenon in which we are able to recognize how other people’s judgments are affected by their biases but fail to see those effects in ourselves. Even though we may be educated on these cognitive biases, we remain susceptible to them and are unable to recognize our personal biases.

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“I’m awesome” “No, you’re not” – the Dunning-Kruger effect

May 14th, 2017 No comments

You’ve just taken an exam. As you push through the doors to the refreshing, cool air of the outside world, you feel a weight lift off your shoulders and a childish giddiness makes its way throughout your body. You feel like you really nailed that exam, which is quite the feat, given you only studied for about 30 minutes the night before. Flash-forward two weeks of vigorously patting yourself on the back, and your exam has been graded. Expecting the absolute best, you accept your graded exam from your professor with a flourish and find yourself just a tad confused to find your grade much lower than you expected.

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Flashbulb Memories: How Our Memories Change Overtime and Why We are so Confident in Them

November 24th, 2015 2 comments

Is there a specific event in your life that you will always remember, no matter how much time passes? What about a public event, a tragic one, one that your whole community experienced? Is there a specific eveWorld Trade Center Attackednt that comes to mind? For many people, the tragic September 11, 2001 attacks in New York City come to mind when asked this question. Ask just about anyone alive during this time, and they can probably tell you where they were when the attacks occurred, or what they were doing, or how they were feeling. Oftentimes, when such an important or prominent event takes place, people can recall it very vividly. A person’s recollection of how they were feeling during such an event is called a flashbulb memory, while their recollection of specific details of the event is called an event memory.

 Flashbulb memories are interesting because of how very detailed and vivid they are, even years and years after an event occurs. The question being debated by many psychologists is, how much do flashbulb memories change over time? How can the long-term retention of flashbulb memories be characterized? For example, after 9/11, one might initially recall being at work when he/she hears the news of the plane crashes. However, a month later, when asked again, the same person could report being at home making breakfast. Typically, you wouldn’t expect flashbulb memories to ever change at all because of how detailed, and vividly they are recalled. Nonetheless, changes in flashbulb memories occur quite often. How much and how often do flashbulb memories really change? Why do they change? These are the questions psychologists are seeking to understand. Read more…

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How Safe Are Our Memories?

April 29th, 2013 No comments

We live in a world today that is constantly bombarding us with stimuli. Even a simple morning routine of getting to school or work shows how much information we have presented to us. Say we turn on the TV to look at traffic reports; we will see which celebrity is promoting his or her new film, which route to take and the new product we absolutely need to have. We have to make breakfast and get ourselves ready to leave. On the way there, we could run into advertisements on billboards and a new song we like on the radio. By the time we finally arrive, so much has been stored away in our memory. Yet how many times has it happened that we distinctly remembering hearing a specific song on the radio or which person was on the news that morning and someone else confidently tells us we are mistaken? How can we so strongly and vividly remember something when it did not happen at all?

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