Questioning Christianity ( Archived) (146)

A realist,,,,

Devout believers suffer from what in the stock market it known as "Confirmation Bias".



In short, your own mind acts like a compulsive yes-man who echoes whatever you want to believe. Psychologists call this mental gremlin the "confirmation bias." A recent analysis of psychological studies with nearly 8,000 participants concluded that people are twice as likely to seek information that confirms what they already believe as they are to consider evidence that would challenge those beliefs.

Why is a mind-made-up so hard to penetrate?
"We're all mentally lazy," says psychologist Scott Lilienfeld of Emory University in Atlanta. "It's simply easier to focus our attention on data that supports our hypothesis, rather than to seek out evidence that might disprove it."

It also is easier for people to rationalize than to be rational. "We're very good at cooking up post-hoc explanations of why our predictions didn't work," Prof. Lilienfeld says. "We reinterpret our failures as near-misses: 'This stock would have gone up if only X had happened,' or '99 times out of 100 I would have been right if not for this freak event.'"

The more you learn, the more certain you become that you are right. While gathering more data makes people more confident, it doesn't make their predictions much more accurate. Each new fact makes you more inclined to find another fact that resembles it, reducing the diversity and value of your information.

Confirmation bias contaminates the thinking of professional investors, too. "We've made tons of errors like this," says Staley Cates, president of Southeastern Asset Management, the Memphis, Tenn., value-investing firm that runs the Longleaf funds. "A lot of psychological traps can be combated with humility, but on this one, that doesn't help." Longleaf, Mr. Cates says, clung too long to a big position in General Motors, GM +0.92%letting product improvements and cost savings "blind us to the fact that GM might not make it" without government help.

But that principal is not confined to "devout believers". It applies just as well to atheists or neo-cons or whatever.

What constitutes normative thinking varies greatly from one situation or area to another. But in any place, most people will adhere to the prevailing beliefs without even bothering to question them analytically.