Referral Paradox

Technical analysis by it's very nature is "attempting" to ascertain what the herd is going to do "next" and jump on board.

The "market" therefore becomes the authority figure.
The "market" is never wrong etc.
This is, of course, "Efficient market" theory taken to reality.

Whenever a trading decision is triggered by the influence of what some other individual or group "does" you are caught in the herd mentality.

However, as regards your references;

Settle & Gorden 1974
Smith & Hunt 1978
Hunt, Domzal & Kernan 1981
Doob & Gross 1968
Lefkowitz, Blake & Mouton 1955
Bushman 1988
Bickman 1974

cheers d998
 
I think referral paradox works in conjuction with other forces. Information that fits within the recipients view and understanding of the world, will be adopted more easily than information that donesn't. Even when the information is outright false. This is particularly true if the information is delivered by some king of percieved expert. It's proven that most people's brains work in such a way as to adopt an idea based on our early understanding of the information provided. We then tend to filter out information that is non-conforming to that core idea, until some type of paradgm shirt occurs, forcing us to re-evalute all the information that lead to the initial idea.

Runningbear
 
I know what you mean. The reason i think we are inclined to believe the person B is because of mystery. Who is person B?????????????????????????????????????????? :)
 
Quote from Runningbear:

I think referral paradox works in conjuction with other forces. Information that fits within the recipients view and understanding of the world, will be adopted more easily than information that donesn't. Even when the information is outright false. This is particularly true if the information is delivered by some king of percieved expert. It's proven that most people's brains work in such a way as to adopt an idea based on our early understanding of the information provided. We then tend to filter out information that is non-conforming to that core idea, until some type of paradgm shirt occurs, forcing us to re-evalute all the information that lead to the initial idea.

Runningbear
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This applies to investing and the internet.

You have bought a certain stock and only pay attention to positive views of the company and ignore posters whom have a not so positive view.
 
Quote from running:

I think referral paradox works in conjunction with other forces. Information that fits within the recipients view and understanding of the world, will be adopted more easily than information that doesn't. Even when the information is outright false. This is particularly true if the information is delivered by some king of perceived expert. It's proven that most people's brains work in such a way as to adopt an idea based on our early understanding of the information provided. We then tend to filter out information that is non-conforming to that core idea, until some type of paradigm shirt occurs, forcing us to reevaluate all the information that lead to the initial idea.

runningbear
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This is called cognitive dissonance. Basically you only change your view when the weight of evidence becomes overwhelming. I read this one paper where this Guy studied a doomsday cult. They said the world would end on a day in 1970's so they sold everything quit their jobs etc. This guy then studied them after the end of the world did not transpire, some admitted that they were just plain wrong others said no we avoided the end because we prayed so hard!!!

I have a feeling that we have evolved this way, we can handle a small group of people that we have known all our lives, i.e we know who to trust from experience. Now with the globalization of the world because of the internet, suddenly I am interacting with billions of people, becomes hard to know what the truth is?
 
Its strongly retated to the survival mechanism. For example, you're 10 years old and out hunting with you dad (it's 2000bc) you see a giant brown bear come out of the woods and eat your old man.

Bang. And idea forms in your head. Brown bears are baaaad.

No matter what happens for a long time, you're going to keep that idea in your head.

In modern times, it's exactly the same just less overt. The President makes healthcare cuts and your dad dies of some treatable contition. The President is baaad.

It's all to do with association. We're are programmed to believe that association means a relationship exists when it is often not the case. This is the basis of all dogma and misguided belief.

Runningbear
 
Quote from Runningbear:

Its strongly retated to the survival mechanism. For example, you're 10 years old and out hunting with you dad (it's 2000bc) you see a giant brown bear come out of the woods and eat your old man.

Bang. And idea forms in your head. Brown bears are baaaad.

No matter what happens for a long time, you're going to keep that idea in your head.

In modern times, it's exactly the same just less overt. The President makes healthcare cuts and your dad dies of some treatable contition. The President is baaad.

It's all to do with association. We're are programmed to believe that association means a relationship exists when it is often not the case. This is the basis of all dogma and misguided belief.

Runningbear
More...

The problem you describe is particulary bad with random events. I switched on the light traded I lose money must be that darned light switch, now I trade in the dark. :D
 
There is a mistake being made in this discourse.

Intelligent people, and possibly all people, derive comfort from consensus and consent in their social intercourse. It s not necessarily deference to any authority or authority figure. You will note that in company even where debate moves an argument about, general consent can move back to common ground or will move on to a different common ground.

Now my point is that your own intelligence can tell you when you are listening to faulty arguments but you are still happy to agree a common point or common points you can accept. You can enjoy many such occasions without wanting to start World War 3 over what are often things of footling importance but simply represent erroneous reasoning, prejudices or preferences.
:)
 
Quote from Cheese:

There is a mistake being made in this discourse.

Intelligent people, and possibly all people, derive comfort from consensus and consent in their social intercourse. It s not necessarily deference to any authority or authority figure. You will note that in company even where debate moves an argument about, general consent can move back to common ground or will move on to a different common ground.

Now my point is that your own intelligence can tell you when you are listening to faulty arguments but you are still happy to agree a common point or common points you can accept. You can enjoy many such occasions without wanting to start World War 3 over what are often things of footling importance but simply represent erroneous reasoning, prejudices or preferences.
:)
More...

I think you have a point, I have come across many liars in my time and the common denominator in all of them was they felt better than everyone else because no-one knew they were lying, when in reality most people figured it out but could not be bothered to "start third world war" over it.

What I am talking about is from an analysis of my own reactions. Somehow the information content seems to increase if I get a reference. Even if I admit that its not rational it still feels that way.
 
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