Re: [IP] People Believe a 'Fact' That Fits Thei r Views Even if It'sClearly False
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Subject: Re: [IP] People Believe a 'Fact' That Fits Their Views Even if
It'sClearly False
Author: Barry Ritholtz <ritholtz@xxxxxxxxxxxxx>
Date: 5th February 2005 12:28:01 pm
Hey Dave,
The Begley article reminded me of a book that was terribly
influentialon my own thinking: "How We Know What Isn't So," by
Thomas Gilovich.
(http://www.amazon.com/exec/obidos/ASIN/0029117062/thebigpictu09-20/002-8088463-8433620)
It is a very readable analysis of many of the same sorts of broad
analytical errors Begley discusses that us Humans are prone to.
Gilovich explores dozens of faulty observation, perception,
comprehension, and recollection errors, all of which we make on a
dialy basis. Its particularly astounding to read how even after a
subject is informed of the study, and shown how and why they made a
particular error, a significant majority go out and repeat the error
again and again.
This book as part of broader curricula I am developing for both
investors and B-school students on Markets and Investor behavior.
Despite being published in 1991, it is especially relevant for those
who have confidence in the public's ability to invest their own
dollars for retirement in Private Social Security accounts.
Truly, one of the more eye opening books you will ever read . . .
Cheers,
<fontfamily><param>Arial</param><x-tad-bigger>Barry L.
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On Feb 4, 2005, at 10:45 PM, David Farber wrote:
<excerpt>
------ Forwarded Message
From: "John F. McMullen" <<observer@xxxxxxxxxxx>
Date: Fri, 04 Feb 2005 21:01:53 -0500 (EST)
To: johnmac's living room <<johnmacsgroup@xxxxxxxxxxxxxxx>
Cc: Dave Farber <<farber@xxxxxxxxxxxxx>
Subject: Sharon Begley -- People Believe a 'Fact' That Fits Their
Views Even
if It's Clearly False
From the Wall Street Journal --
http://online.wsj.com/article/0,,SB110746526775045356,00.html?mod=todays_us_
marketplace
SCIENCE JOURNAL
People Believe a 'Fact' That Fits Their Views Even if It's Clearly
False
By SHARON BEGLEY
Funny thing, memory. With the second anniversary next month of
the U.S.-led invasion of Iraq, it's only natural that
supporters as well as opponents of the war will be reliving
the many searing moments of those first weeks of battle.
The rescue of Pvt. Jessica Lynch. U.S. troops firing at a van
approaching a Baghdad checkpoint and killing seven women and
children. A suicide bomber nearing a Najaf checkpoint and
blowing up U.S. soldiers. The execution of coalition POWs by
Iraqis. The civilian uprising in Basra against Saddam's
Baathist party.
If you remember it well, then we have grist for another verse
for Lerner and Loewe ("We met at nine," "We met at eight," "I
was on time," "No, you were late." "Ah yes, I remember it
well!"). The first three events occurred. The second two were
products of the fog of war: After being reported by the media,
both were quickly retracted by coalition authorities as
erroneous.
Yet retracting a report isn't the same as erasing it from
people's memories. According to an international study to be
published next month, Americans tend to believe that the last
two events occurred -- even when they recall the retraction or
correction. In contrast, Germans and Australians who recall
the retraction discount the misinformation. It isn't that
Germans and Australians are smarter. Instead, it's further
evidence that what we remember depends on what we believe.
"People build mental models," explains Stephan Lewandowsky, a
psychology professor at the University of Western Australia,
Crawley, who led the study that will be published in
Psychological Science. "By the time they receive a retraction,
the original misinformation has already become an integral
part of that mental model, or world view, and disregarding it
would leave the world view a shambles." Therefore, he and his
colleagues conclude in their paper, "People continue to rely
on misinformation even if they demonstrably remember and
understand a subsequent retraction."
For the study, the scientists showed more than 860 people in
Australia, Germany and the U.S. a list of events -- some true
(the first three examples above), some reported but retracted
(the second two), some completely invented ("Iraqi troops
poisoned a water supply before withdrawing from Baghdad").
Each person indicated whether or not he or she had heard of
the event and rated its likelihood of being true. People were
pretty good at weeding out the invented reports. Then, for
each report they said they had heard, they noted whether it
had subsequently been retracted.
</excerpt>SNIP
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