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Cognitive dissonance is an uncomfortable feeling caused by holding two contradictory ideas simultaneously. The theory of cognitive dissonance proposes that people have a motivational drive to reduce dissonance by changing their attitudes, beliefs, and behaviors, or by justifying or rationalizing them. It is one of the most influential and extensively studied theories in social psychology. […] The most famous case in the early study of cognitive dissonance was described by Leon Festinger and others in the book When Prophecy Fails. The authors infiltrated a group that was expecting the imminent end of the world on a certain date. When that prediction failed, the movement did not disintegrate, but grew instead, as members vied to prove their orthodoxy by recruiting converts.

✖ Via Wikipedia: “Cognitive dissonance”

Learn more about Leon Festinger and his famous book When Prophecy Fails

• May 07, 2010 link notes tagged: science psychology cognition reality faith beliefs prophecy order chaos study

Ethical issues aside, the banks also did poorly at their core job, which is managing risk. And, while there are plenty of honest, capable people in finance, the ease with which investors looked past Wall Street’s failings seems like a classic case of what the social psychologist Leon Festinger called “cognitive dissonance.” Festinger argued that when beliefs come into conflict with reality we think up explanations that shape reality to our beliefs, rather than vice versa. He used the example of the Millerites, a millenarian religious sect that came to believe that Jesus Christ would return to earth on October 22, 1844. He didn’t. But not all the Millerites abandoned their faith. Many set about constructing elaborate rationalizations to justify their belief, arguing that Christ had returned spiritually, or that the event had occurred in Heaven, if not on earth. Similarly, when people’s faith in Wall Street as an honest broker, a smart allocator of capital, and a path to personal wealth was disappointed, they managed to explain things away.

✖ Via The New Yorker: “Déjà Vu” by James Surowiecki, May 3rd, 2010, p. 25

About James Surowiecki:

“James Surowiecki has been a staff writer at The New Yorker since 2000. He writes The Financial Page. Surowiecki came to The New Yorker from Slate, where he wrote the Moneybox column. He has also been a contributing editor at Fortune and a staff writer at Talk. Previously, he was the business columnist for New York magazine. He has contributed to The Wall Street Journal, Wired, the New York Times Magazine, the Washington Post, and Lingua Franca, and has written on subjects ranging from Silicon Valley to college basketball.” (more)

More importantly, James Surowiecki is the author of The Wisdom of Crowds (2004)

• May 03, 2010 link notes tagged: communication bank finance greed cognition faith reality economy theory crowd capitalism fraud lost loser

✖ Via Un siècle d’écrivains: Emil Cioran, French documentary directed by Bernard Jourdain and written by Patrice Bollon, 1999.

Transcript: “Au fond, avec l’âge, tout s’épuise, même le cynisme. Je n’ai pas dépassé le cynisme, comme attitude théorique, je ne l’ai pas dépassé. Mais on le dépasse sur le plan affectif. Tout s’use. Je n’ai aucune raison de revenir sur ce que j’ai écrit. Dire : je me suis trompé, les choses dans le fond ne sont pas si terribles que ça… Non. Mais les choses qu’on a exprimées, on n’y croit un peu moins. Pourquoi ? Elles se détachent de vous. En ce sens, le fait d’écrire – c’est connu, tout le monde le dit – est une sorte de profanation, parce que les choses auxquelles vous croyez intégralement, à partir du moment où vous les avez dites, elles comptent moins.”

Watch this documentary on YouTube via Cioran.eu

• Aug 08, 2009 link notes tagged: author book philosophy doubt cynicism death evolution time destruction life faith