Courtesy of Simoleon Sense
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People don’t know when they’re lying to themselves – Not Exactly Rocket Science-
Using experiments where people could cheat on a test, Chance has found that cheaters not only deceive themselves, but are largely oblivious to their own lies. Their ruse is so potent that they’ll continue to overestimate their abilities in the future, even if they suffer for it. Cheaters continue to prosper in their own heads, even if they fail in reality.
[I’m including a couple more excerpts from this truly fascinating article – Ilene
You don’t have to look far for instances of people lying to themselves. Whether it’s a drug-addled actor or an almost-toppled dictator, some people seem to have an endless capacity for rationalising what they did, no matter how questionable. We might imagine that these people really know that they’re deceiving themselves, and that their words are mere bravado. But Zoe Chance from Harvard Business School thinks otherwise.
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This tells us a little about the mindset of people who fake their research, who build careers on plagiarised work or who wave around spurious credentials. There’s a tendency to think that these people know full well what they’re doing and go through life with a sort of Machiavellian glee. But the outlook from Chance’s study is subtler.
She showed that even though people know that they occasionally behave dishonestly, they don’t know that they can convincingly lie to themselves to gloss over these misdeeds. Their scam is so convincing that they don’t know that they’re doing it. As she writes, “Our findings show that people not only fail to judge themselves harshly for unethical behaviour, but can even use the positive results of such behaviour to see themselves as better than ever.”]
The Neuroscience of Social Decision-Making
Given that we live in highly complex social environments, many of our most important decisions are made in the context of social interactions. Simple but sophisticated tasks from a branch of experimental economics known as game theory have been used to study social decision-making in the laboratory setting, and a variety of neuroscience methods have been used to probe the underlying neural systems. This approach is informing our knowledge of the neural mechanisms that support decisions about trust, reciprocity, altruism, fairness, revenge, social punishment, social norm conformity, social learning, and competition. Neural systems involved in reward and reinforcement, pain and punishment, mentalizing, delaying gratification, and emotion regulation are commonly recruited for social decisions. This review also highlights the role of the prefrontal cortex in prudent social decision-making, at least when social environments are relatively stable. In addition, recent progress has been made in understanding the neural bases of individual variation in social decision-making.
The Seven Immutable Laws of Investing – By James Montier -Sean Riskowitz
In my previous missive I concluded that investors should stay true to the principles that have always guided (and should always guide) sensible investment, but I left readers hanging as to what I believe those principles might actually be. So, now, for the moment of truth, I present a set of principles that together form what I call The Seven Immutable Laws of Investing.
