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MrMark
Abstract Data Type
Joined: Jul 04, 2006
Age: 50
Posts: 9795
Location: Tallahassee, FL
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 Posted: Tue Sep 30, 2008 2:58 pm Post subject: Herd mentality rules in financial crisis (Reuters) |
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Herd mentality rules in financial crisis
By Maggie Fox, Health and Science Editor
WASHINGTON (Reuters) - Herd mentality rules during a financial crisis because people are wired to follow the crowd when times are uncertain, experts say.
Brain and behavior studies clearly show that when information is scarce and threats seem imminent, people often stop listening to their own logic and look to see what others are doing.
"People are afraid, and the reason they are afraid is there tremendous uncertainty right now in the markets," Gregory Berns, a neuroeconomist at Emory University in Atlanta who studies the biology of economic behavior, said in a telephone interview.
http://news.yahoo.com/s/nm/20080930/lf_nm_life/us_financial_psychology
Neuroeconomist. Wow. That's what I want to be when I grow up.
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"Keep walking, though there's no place to get to. Don't try to see through the distances. That's not for human beings. Move within, but don't move the way fear makes you move."
- Rumi (Translated by Coleman Barks) |
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caramateo
Pileated woodpecker
Joined: Sep 19, 2007
Posts: 189
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| Posted: Tue Sep 30, 2008 3:12 pm Post subject: |
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Funny thing, I just read this article and thought about how me being an aspie makes me be different. I've never had the "herd" mentality. I prefer to act by logic and reasoning first.
Most people don't get me until they see (if they ever) what I'm talking about. |
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pbcoll
Phoenix
Joined: Feb 15, 2007
Posts: 1799
Location: England
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| Posted: Tue Sep 30, 2008 3:21 pm Post subject: |
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Yet the most fundamental assumption in economics is that people are rational...
Following the herd in times of crisis makes sense when running away from tigers, but is not rational in finance.
Nice avatar, caramateo.
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I neither take revenge, nor beg for favours. (Rabindranath Tagore)
I am the steppenwolf that never learned to dance. (Sedaka) |
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anna-banana
and yet it moves!
Joined: Aug 31, 2008
Age: 25
Posts: 1728
Location: Europe
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| Posted: Tue Sep 30, 2008 3:36 pm Post subject: |
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I don't get this. isn't herd mentality supposed to be something you don't conciously think about, like you see people running away so you start running too (I only know the theory too)?
| Quote: | | Zak knows what he is doing. "I am buying stocks," he said. |
that's what I would do if I had a spare dollar...
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I got some bad ideas in my head. (Taxi Driver) |
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