Changing Minds --- Our Own and Others

The subject of how minds do or don't change seems to me like it ought to be a major topic of investigation.

It would tell us a lot about the nature of scientific progress, social change, professional blind spots, and more dynamic things such as the evolution of a financial crisis.

I'll target this as a topic for a future essay, perhaps a longish one. There is bound to be a vast literature on this theme, and it will inevitably be spread out over many different fields.

In the meanwhile, I'll collect a few useful quotes and links on a catch-as-catch-can basis.

Evolution of a Crisis

"The crisis takes a much longer time coming than you think and then it happens much faster than you would have thought." ----Rudiger Dornbusch.

This has charm. It also sounds right, but I'd like some carefully studied empirical evidence.

Many believe that the Shanghai market, USD/Euro, CDO market, have had less impact on the real economy than one might have thought, but why do we think that?

Maybe, in economics as in politics, it is as Balfour suggested:

"Remember that nothing matters very much, and few things matter at all.".

The Time It Takes

Douglas Hofstadter had a view that things take longer than you expect, and he modifited it: "It always takes longer than you expect, even when you take into account Hofstadter's Law."

An amusing piece of eponymous recursion, and there's nothing inconsistent with it. Monotone functions can have fixed points (typically two).

This is also nicely consistent with Dornbush's observation, as well as pickier things like positive excess returns to momentum strategies.

Persistence of Wishful Thinking

"Wishful thinking can dominate much of the work of a profession for a decade, but not indefinitely."

--- Robert Shiller in "From Efficient Market Theory to Behavioral Finance" (Cowles Commission Report, 2002)

Changing Someone's Mind --- a Non-starter

"I know that most men, including those at ease with problems of the greatest complexity, can seldom accept the simplest and most obvious truth if it be such as would oblige them to admit the falsity of conclusions which they have proudly taught to others, and which they have woven, thread by thread, into the fabrics of their life." --- Count Leo Tolstoy (in Chapter 14 of his incredible and contentious essay "What is Art?" --- with my thanks to Ricky Der for finding this source)


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