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[רמב"ם]
"כי לאדם יש בטבעו אהבה ונטייה אל מה שהוא מורגל אליו;
עד שאתה רואה את בני המדבר כפי שהם פרועים, נעדרי תענוגות ולחמם צר,
סולדים מן הערים ואינם נהנים מהנאותיהן, ומעדיפים את התנאים הרעים
שאליהם הם רגילים על מצבים טובים שאין הם רגילים אליהם. נפשם לא תסכון
לשכון בארמונות, ללבוש בגדי משי, להתענג במרחץ ולמשוח עצמם בשמן ובבשמים.
כן קורה לאדם שיאהב את הדעות שהוא מורגל אצלן ונתחנך עליהן,
ויגן עליהן, וירגיש זרות כלפי דעות אחרות ודחייה מפניהן". |
[Heuer]
"As a general rule, people are too slow to change an established
view, as opposed to being too willing to change. The human
mind is conservative. It resists change. Assumptions that
worked well in the past continue to be applied to new situations
long after they have become outmoded . A study of senior managers
in industry identified how some successful managers counteract this
conservative bent. They do it, according to the study, By paying
attention to their feelings of surprise when a particular fact does
not fit their prior understanding, and then by highlighting
rather than denying the novelty. Although surprise made
them feel uncomfortable, it made them take the cause [of the surprise]
seriously and inquire into it....Rather than deny, downplay, or
ignore disconfirmation [of their prior view], successful senior
managers often treat it as friendly and in a way cherish the discomfort
surprise creates. As a result, these managers often perceive novel
situations early on and in a frame of mind relatively undistorted
by hidebound notions. Analysts should keep a record of unexpected
events and think hard about what they might mean, not disregard
them or explain them away. Minds are like parachutes. They only
function when they are open". |
[Willemien
and Voorneveld] "The behavioral economics literature provides
several motivations for the common observation that agents appear
somewhat unwilling to deviate from their recent choices. For instance,
Tversky and Kahneman (1982) mention the bias towards recent choices
as an example of the availability bias, the ease
with which instances come to mind. Similarly, Schelling (1960) has
argued that players, when indifferent between strategies, choose
the most salient strategy. In combination with
the recency effect, i.e., the cognitive bias resulting from disproportionate
salience of recent stimuli or observations (Miller and Campbell,
1959), this may explain why agents appear to have a preference for
recent choices. Other motivations include models
for agents displaying defaulting behavior or inertia
(Vega-Redondo, 1993, 1995, Madrian and Shea, 2001), the formation
of habits (Young, 1998), the use of rules
of thumb (Ellison and Fudenberg, 1993), or the locking
in on certain modes of behavior due to learning by doing
(Grossman, 1977) or, as Joosten (1995) express it: unlearning by
not doing". |
[Shefrin]
"A combination of overconfidence, together
with anchoring and adjustment leads investors and
analysts to adapt insufficiently to the arrival of new information.
The result is conservatism". |
[Fuller] Both analysts and investors are slow to
recognize the information associated with a major earnings surprise.
Instead, they overconfidently remain anchored
to their prior view of the company's prospects. That is, they underweight
evidence that disconfirms their prior views and overweight confirming
evidence. Consequently, both analysts and investors interpret a
permanent change as if it were temporary; thus the price is slow
to adjust. Fuller would
buy a stock soon after a major positive earnings surprise and hold
it until the positive earnings surprises diminished or disappeared. |
[Montier]
"(Conservatism bias) is the tendency to cling tenaciously to
a view or a forecast. Once a position has been stated most people
find it very hard to move away from that view. When movement does
occur it is only very slow (this creates under-reaction to events)". |
[Munger]
"Now let's talk about efficient market theory, a wonderful
economic doctrine that had a long vogue in spite of the experience
of Berkshire Hathaway. In fact one of the economists who won - he
shared a Nobel Prize - and as he looked at Berkshire Hathaway year
after year, which people would throw in his face as saying maybe
the market isn't quite as efficient as you think, he said, "Well,
it's a two-sigma event." And then he said we were a three-sigma
event. And then he said we were a four-sigma event. And he finally
got up to six sigmas - better to add a sigma than change a theory,
just because the evidence comes in differently. [Laughter] And,
of course, when this share of a Nobel Prize went into money management
himself, he sank like a stone". |
A
Model of Investor Sentiment, Barberis, Shleifer and Vishny,
1998
"Recent empirical research in finance has uncovered two families
of pervasive regularities: underreaction of stock prices to news
such as earnings announcements; and overreaction of stock prices
to a series of good or bad news. In this paper, we present a parsimonious
model of investor sentiment that is, of how investors form beliefs
that is consistent with the empirical findings. The model is based
on psychological evidence and produces both underreaction and overreaction
for a wide range of parameter values". |
The
Extreme Future Stock Returns Following Extreme Earnings Surprises,
DOYLE, LUNDHOLM and SOLIMAN, 2003
We find that firms with extreme earnings surprises tend to be "neglected"
stocks in terms of the information environment. Firms with extreme
positive earnings surprises tend to have persistent earnings surprises
in the same direction, strong growth in cash flows and earnings,
and large increases in analyst coverage, relative to firms with
extreme negative earnings surprises. |
On
Confirmation Bias and Deviations From Bayesian Updating, Chetan
and Wolfe, 2004
"Psychologists have documented several biases and heuristics
that describe deviations from Bayesian updating in individual decision
making under uncertainty. Confirmation Bias predicts that individuals
will exhibit systematic errors in updating their beliefs about the
state of the world given a stream of information. The experiment in
this paper examines (and) shows that subjects display conservatism
by underweighting new information when updating. In addition, subjects
display confirmation bias by differentiating between confirming and
disconfirming evidence". |
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