Ulterior Motives

An important part of everyone's self-concept is a sense of how we compare to others in our behaviors. A common observation is that many people are overly optimistic in their judgments about themselves relative to others. For example, on average, people think they are more likely to be successful in business than others, or to be less likely to suffer from serious illnesses than others. Not everyone can be more successful in business than others, of course, so somebody in that sample must be being too optimistic.

What is the effect of this optimism on behavior? Read More

Confidence matters. We are much more likely to act in situations when we are confident. We make purchases based on confidence. We are also persuaded by others based on their confidence. A statement made confidently and forcefully is much more likely to sway our opinion than a statement that is hedged.

Presumably, the power of confidence lies in the belief that when people are more confident in an outcome they are more likely to be correct in their predictions. Read More

Reading the business pages over the last year, it is clear that a lot of investors did not know what they were buying. That is not to fault the investors entirely. There is far too much information out there for people to be able to inform themselves fully about every investment opportunity. In addition, it is clear that banks, and rating agencies, and companies were not entirely forthright in providing information about themselves.

But, if people are not using information about the health of companies to purchase stocks and bonds, what are they doing? Read More

We often talk about abstract concepts and emotions using metaphors to physical objects.We might say, "John felt the pressure building up inside of him until he finally blew his top." This metaphor reflects a common belief about the way anger works. Read More