Economic Crises

Ian I Mitroff and Can M. Alpaslan
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Ian I Mitroff: University of California
Can M. Alpaslan: California State University

Chapter 5 in The Crisis-Prone Society: A Brief Guide to Managing the Beliefs that Drive Risk in Business, 2014, pp 39-49 from Palgrave Macmillan

Abstract: Abstract Humans are not rational calculating machines. They suffer from a tremendous number of cognitive biases. For instance, they are not good at computing and distinguishing between probabilities; they overestimate the probability of recent or more salient events, and their degree of control over events; they are overconfident and overly optimistic; they search for and remember information that confirms their beliefs, and stick to their beliefs when presented disconfirming evidence. While humans may or may not consciously recognize their biases, psychoanalytic theory tells us that human behavior is also influenced strongly by unconscious fantasies. These fantasies and projections are among some of the deepest assumptions that humans have. In this chapter, we highlight the importance of constantly questioning our deepest assumptions about the world.

Keywords: Hedge Fund; Behavioral Economic; Psychoanalytic Theory; Housing Bubble; Hedge Fund Manager (search for similar items in EconPapers)
Date: 2014
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-1-137-45483-6_5

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DOI: 10.1057/9781137454836_5

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