A Good One..

August 16, 2011 § Leave a comment

To say this study useful is to put it mildly.

Stanford’s Beshears and Milkman undertook analysis of stock dealers behavior etc and came up with what I sense is broadly the case for many business and related people in America today..

Take, for illustration;—

The research has broader implications for understanding financial markets. Persistent, widespread over-optimism or over-pessimism by market participants could lead to mispricing of assets, says Beshears. He suggests, for example, that stubbornness contributed to the financial crisis of 2007-2008. Despite initial signs of a weakening real estate market, many analysts, investors, and lenders maintained or stepped up their commitment to housing-related assets, such as mortgage-backed securities. The result: The housing bubble continued longer than it should have, delaying and exacerbating the subsequent bust. Stubbornness, Beshears says, “is one mechanism that might allow market bubbles and crashes.”

And if I be so bold, I’d say how business people and business-oriented people taking an interest in other fields of knowledge bring such attributes to their positions.. instance AGW and Climate Change.. where scientists of my acquaintance have often recognised the stubborness of MORE is BETTER assumptions of denial whilst, unfortunately, having to put up with such prolonging consequences.

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