Two new sciences shed light on an old problem of financial risk

With the stock market off to its worst first week of the year in history, investors are scrambling to decide whether or not to get out of the market. In my new book, The Mind of the Market, I describe the problem this way: our decisions about buying or selling things we value are heavily weighted by three psychological phenomena: the endowment effect, the sunk cost fallacy, and loss aversion. Understanding these will help you decide what to do with your investments. (continue reading…)

Journal article explanations of how science
works often differ from the actual process

According to 55 percent of 350,000 people from 70 countries who participated online in Richard Wiseman’s Laugh Lab experiment (discussed in last month’s column), this is the world’s funniest joke:

Two hunters are out in the woods when one of them collapses. He doesn’t seem to be breathing, and his eyes are glazed. The other guy whips out his phone and calls the emergency services. He gasps, “My friend is dead! What can I do?” The operator says, “Calm down. I can help. First, let’s make sure he’s dead.” There is a silence, then a shot is heard. Back on the phone, the guy says, “Okay, now what?”

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Dr. Michael Shermer, author of “Why Darwin Matters,” says we’re just as gullible as previous generations. (Source)

How the curious science of the oddities
of everyday life yields new insights

Using an index finger, trace the capital letter Q on your forehead. Which way did the tail of the Q slant?

What an odd thing to ask someone to do. Exploring weird things and why people believe them, however, is what I do for a living. Coming at science from the margins allows us to make an illuminating contrast between the normal and the paranormal, the natural and the supernatural, and the anomalous and the usual. The master at putting uncanny things to the experimental test — the man I call the Mythbuster of Magical Thinking — is University of Hertfordshire psychologist Richard Wiseman. His new book, Quirkology: How We Discover the Big Truths in Small Things (Basic, 2007), presents the results of his numerous (and often hilarious) experiments on all matters peculiar. (continue reading…)

To be of true service to humanity, science must be
an exquisite blend of data, theory and narrative

Over the past three decades I have noted two disturbing tendencies in both science and society: first, to rank the sciences from “hard” (physical sciences) to “medium” (biological sciences) to “soft” (social sciences); second, to divide science writing into two forms, technical and popular. And, as such rankings and divisions are wont to do, they include an assessment of worth, with the hard sciences and technical writing respected the most, and the soft sciences and popular writing esteemed the least. Both these prejudices are so far off the mark that they are not even wrong. (continue reading…)