The Old Constant : Human Psychology

Antoinette Frank, a former New Orleans police offer, she was raised her early years in New Orleans and moved to Opelousas later. When she graduated, she later returned to New Orleans to fulfill her dream of becoming a police officer. Since a small girl, she always wanted to be a police officer.

The scientific endeavor helps us become more educated citizens so that we are able to approach data presented by political candidates with a healthy dose of skepticism by providing them with the tools needed. Critical thinking skills are important to have when viewing any new data in order to really understand the date presented, instead of just trusting the biased opinion of the one presenting the data. In chapter 1 of Psychology: Core Concepts, it provides a list of six critical thinking skills that are based on six specific questions.

As Chapter 10 questions, if further evidence continues to surface that capital markets do not always behave in accordance with the efficient market hypothesis, then should we reject the research that has embraced the EMH as a fundamental assumption? In this regard we can return to earlier chapters of this book in which we emphasised that theories are abstractions of reality. Capital markets are made of individuals and as such it would not (or perhaps, should not) be surprising to find that the

Kahneman’s article is an analysis of intuitive thinking and how it guides our decision-making. Although primarily aimed at the field of psychology, it is an interdisciplinary article with applications in economic theorising. Kahneman attempts to differentiate between two systems of thought, one of intuition (system 1) and one of reasoning (system 2), and argues that many judgements and choices are made intuitively, rather than with reason (a slower and more deliberate process). Intuitive decision making, which encompasses heuristics, although generally more efficient and rapid, makes the agent potentially subject to errors due to framing effects or violations of dominance. The analysis of the studies and theoretical situations also provides criticism of the commonly held model of the rational agent within economics. The article also further conceptualises Kahneman’s theory, the Prospect Theory (Kahneman & Tversky, 1979), which has descriptive applications of people’s choice in decision-making situations involving risk and known probability of outcomes. These situations are typically unexplained by the more normative rational agent model.

Compare and Contrast the approach to studying children’s friendships taken in the Bigelow and La Gaipa (1975) study with that taken by William Corsaro.

Investment analysis is said to be psychological in various aspects. The irregularity observed in financial markets in recent times has yet again brought to question the practical application of traditional financial theory and the Efficient Market Hypothesis. There is therefore the need to put this base of accepted finance theory under scrutiny. The foundation of one of the broadly examined problems with traditional financial theory is the effect of psychological influences on individuals’ behavior towards investment. According to Slovic (1972), Daniel, Hirshleifer ,Subrahmanyam (1998) and Hilton (2001), they believe that financial markets are functioning at a rapid and increasingly cut throat environment and have been transformed in several ways, one of which is technological. The growing rate of technology has had an immense effect on trading and investment. Technology has aided in allowing information to be easily accessible to investors, but there has been little focus on the issue of interpreting the information skillfully. It is important to note that the appropriate use of information is a crucial part in making investment decisions.

Economists have often modelled human decision makers as completely rational. According to this model, rational people know their own preferences, gather and accurately process all relevant information, and then make rational choices that advance their own interests. However, Herbert Simon won a Nobel Prize in economics by pointing out that people are rational, but only boundedly so in that they seldom gather all available information, they often do not accurately process the information

A long time ago, I heard about the myth that people only use 10% of the brain. At first I thought that only people who were not in the field of psychology or neurology would believe this misconception. Until I read that in one study one-third of psychology students answered that people only use one-tenth of their brain power (Higbee & Clay, 1998, p. 471). Then, when people kept asking me what I thought about humans only being capable of using ten percent of their brain and reading things like 59% of a sample of individuals who went to college in Brazil believe in this myth and that six percent of neuroscientists agreed (Herculano-Houzel, 2002), I understood that I was reading about one of the most prevalent myths in

In the book “Discovering Psychology” psychology is defined as “The scientific study of behavior and mental processes” (Hockenbury, 2014, p.3). What I’m testing for in participants is their general knowledge of psychology based on specific questions. The questions and their correct answers will be addressed when I explain the method by which I tested their knowledge. The participants answers to these questions will reveal how much they know about psychology. If they have any misconceptions, it will be revealed in their responses. Their ages will also be used in order to show which group has a better grasp of what psychology is.

Daniel Kahneman is one of the most influential psychologists who has a tremendous understanding on how and why individuals make the decisions they make. In 2002, professor Kahneman received the Nobel Prize in Economic for his contributions integrating insights from psychological research into economic science focusing on human judgment and decisions making. Human decisions are influenced by environmental, physical, and emotional characteristics of life impacting decisions making at any given moment. In the book, Thinking Fast and Slow, Kahneman described in the first part of the book, the basic elements of a two-system approach to judgment and choice. When individuals perceive and react to things automatically and require little or no effort,

Within the business disciplines, we are fortunate to have two major paradigms (schools of thought): rationalist and behavioralist. An ideological/theoretical conflict has existed between the two paradigms for over 50 years. Is human decision behavior more consistent with the rationalist models or behavioralist models? Behavioral finance has grown out of this conflict and will likely result in the resolution of the conflict as time passes.

What affects our Self: Self-esteem is how we assess ourselves as people, and how open-minded are we to receive feedback from a friend, family member, co-worker, etc. How we react to it all matters on high self-esteem or low self-esteem.

Social psychology tells us that daily behaviors and attitudes stem from the influences of social factors on the individual. In other words, all of our daily actions are fueled from social influences in our daily lives. Social psychology is a branch of psychology concerned with how social phenomena influence us and how people interact with others. There are some basic aspects of social behavior that play a large role in our actions and how we see ourselves. There have been many different theorists who have attempted to explain and understand this idea. After studying and learning about most the theories and ideas, I have come to the conclusion along with the author Kenneth Allan that George Herbert Mead is the only true social

The efficient market, as one of the pillars of neoclassical finance, asserts that financial markets are efficient on information. The efficient market hypothesis suggests that there is no trading system based on currently available information that could be expected to generate excess risk-adjusted returns consistently as this information is already reflected in current prices. However, EMH has been the most controversial subject of research in the fields of financial economics during the last 40 years. “Behavioural finance, however, is now seriously challenging this premise by arguing that people are clearly not rational” (Ross, (2002)). Behavioral finance uses facts from psychology and other human sciences in order to

My independent research in the field started with my curious interest in the processes of how decisions made by individuals and governments, what are the main factors encouraged them to choose particular decision over other options and the outcomes of those decisions. Then, I started to read theories of great Economists, such as, Keynes, Freidman , Devenport, Kinnerly and Mason who wrote on decision-making and the ability of individual to interpret the information. Additionally, there were theories by De Bondt , Clark , Tversky and Kehnman who argued that human psychology is interconnected with economics which cannot be ignored. Learning those theories and comparing them with the real life happenings, my enthusiasm to get deeper insights of economics increased. Encouraged by this, I have compiled