First contributed by: Anonymous, aka: Curious George on 12/1/2009
What is cognitive dissonance?
Anxiety
that results from simultaneously holding contradictory or otherwise
incompatible attitudes, beliefs, or the like, as when one likes a person
but disapproves strongly of one of his or her habits. (Dictionary.com)
It’s
not so much the definition of cognitive dissonance but rather how we
respond to it that is important. If investment decisions are built on
untruths, results will suffer. Every day we are presented with
conflicting information and we are conflicted in what to believe. If one
wants good investment results then good information really does matter.
So, where is the truth?
Social psychologist Leon
Festinger says “Dissonance and consonance are relations among cognitions
that is, among opinions, beliefs, knowledge of the environment, and
knowledge of one's own actions and feelings. Two opinions, or beliefs,
or items of knowledge are dissonant with each other if they do not fit
together; that is, if they are inconsistent, or if, considering only the
particular two items, one does not follow from the other” (Leon
Festinger 1956: 25).
His three ways of dealing with cognitive dissonance
1. One may try to change one or more of the beliefs, opinions, or behaviors involved in the dissonance;
Showing posts with label cognitive dissonance. Show all posts
Showing posts with label cognitive dissonance. Show all posts
Tuesday, December 21, 2010
Sunday, January 10, 2010
Cognitive Dissonance Strikes Again!
Curious George offers this rare guest post. (Thanks! I hope there will be more.)
We all want to believe the data we receive is good, sound information from a thoughtful and honest process. Good data is so important to making good decisions. Consider the recent reporting of December 2009 retail sales.
The Sydney Morning Herald reports December US retail sales up 2.9%. Reuters estimates US retail sales for December up 1.3-2.0%. Yahoo reports a 2.8% increase. All my searches for retail sales reported increases for December 2009. So, if retail sales are up, then what about sales tax revenue. It should be up too, right? Nope, it’s down.
We all want to believe the data we receive is good, sound information from a thoughtful and honest process. Good data is so important to making good decisions. Consider the recent reporting of December 2009 retail sales.
The Sydney Morning Herald reports December US retail sales up 2.9%. Reuters estimates US retail sales for December up 1.3-2.0%. Yahoo reports a 2.8% increase. All my searches for retail sales reported increases for December 2009. So, if retail sales are up, then what about sales tax revenue. It should be up too, right? Nope, it’s down.
Tuesday, December 1, 2009
Please, Just Lie to Me. A lesson on Financial Cognitive Dissonance.
Contributed by: Anonymous, aka: Curious George
What is cognitive dissonance?
Anxiety that results from simultaneously holding contradictory or otherwise incompatible attitudes, beliefs, or the like, as when one likes a person but disapproves strongly of one of his or her habits. (Dictionary.com)
It’s not so much the definition of cognitive dissonance but rather how we respond to it that is important. If investment decisions are built on untruths, results will suffer. Every day we are presented with conflicting information and we are conflicted in what to believe. If one wants good investment results then good information really does matter. So, where is the truth?
Social psychologist Leon Festinger says “Dissonance and consonance are relations among cognitions that is, among opinions, beliefs, knowledge of the environment, and knowledge of one's own actions and feelings. Two opinions, or beliefs, or items of knowledge are dissonant with each other if they do not fit together; that is, if they are inconsistent, or if, considering only the particular two items, one does not follow from the other” (Leon Festinger 1956: 25).
His three ways of dealing with cognitive dissonance
1. One may try to change one or more of the beliefs, opinions, or behaviors involved in the dissonance;
2. One may try to acquire new information or beliefs that will increase the existing consonance and thus cause the total dissonance to be reduced; or,
3. One may try to forget or reduce the importance of those cognitions that are in a dissonant relationship (Festinger 1956: 25-26).
Let’s try a real world example
What is cognitive dissonance?
Anxiety that results from simultaneously holding contradictory or otherwise incompatible attitudes, beliefs, or the like, as when one likes a person but disapproves strongly of one of his or her habits. (Dictionary.com)
It’s not so much the definition of cognitive dissonance but rather how we respond to it that is important. If investment decisions are built on untruths, results will suffer. Every day we are presented with conflicting information and we are conflicted in what to believe. If one wants good investment results then good information really does matter. So, where is the truth?
Social psychologist Leon Festinger says “Dissonance and consonance are relations among cognitions that is, among opinions, beliefs, knowledge of the environment, and knowledge of one's own actions and feelings. Two opinions, or beliefs, or items of knowledge are dissonant with each other if they do not fit together; that is, if they are inconsistent, or if, considering only the particular two items, one does not follow from the other” (Leon Festinger 1956: 25).
His three ways of dealing with cognitive dissonance
1. One may try to change one or more of the beliefs, opinions, or behaviors involved in the dissonance;
2. One may try to acquire new information or beliefs that will increase the existing consonance and thus cause the total dissonance to be reduced; or,
3. One may try to forget or reduce the importance of those cognitions that are in a dissonant relationship (Festinger 1956: 25-26).
Let’s try a real world example
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