Behavioral finance FAQ / Glossary (Narrow)
This is a separate page of the N-O section of the Glossary
Dates of related message(s) in the
Behavioral-Finance group (*):
Year/month, d: developed / discussed,
See anchoring, framing, selective
exposure, tunnel vision, availability
heuristics, reductionism, focalization,
The brain might be stuck in one direction.
Why not train it to rotate like a ship radar?
Narrow thinking / narrow mindedness (or
selective thinking / selection bias) is focusing
the mind on only one element of an
issue and neglecting (or even denying) others.
See in this glossary the "selectivity bias" table.
An omnipresent bias
About every brain carries a mild or acute form of the virus.
Maybe that is why brains have problem to understand one another
and how fights start in the Dodge City saloon.
This overly selective mental bias is very common... and a source of
disastrous decisions, in business and finance (and in other activities).
Narrow thinking results from
either cognitive defects (in attention, memory, logic)
and/or emotional influences (attractions, aversions).
Narrow mindedness can affect even the highest intellectual authorities.
Here a factor might be vested academic interests. They make them deny that they have
to broaden their attitude, .
It takes many forms of narrow / reductive thinking, such as :
Specific ones More general ones
Those with an important role in
economic / financial behaviors.
Anchoring, framing, selective exposure,
tunnel vision, availability heuristics (and
other heuristics), reductionism, numeracy
bias, focalization, denial of realities,
Every one has its article in this glossary
Other forms, less related to
finance / economics, thus
less developed in this article,
but quite widespread, with
deep impacts in individual
and social life.
Let us cite the extreme ones:
Rigid principles, dogmas,
It might even be a paradigm
Let us call it extreme narrow logic.
The binary / formal / Aristotelian logic is often praised as the epitome
Its flaw is that it sees things always as either true or false, good or bad, excluding
the possibility of intermediate shades or more complex approaches.
Such an "narrow logic":
* Is useful in reasonings when things are clear-cut (*).
* But, as any dogma, it sometimes contribute to narrow
thinking - with extreme consequences - when they meet
evolving, many-sided and uncertain situations,
as the "fuzzy logic" article explains.
(*) To be half pregnant is a bit hard to understand, but even so pregnancy can be seen
to follow several phases.
(*) To find those messages: reach that Behavioral-Finance group and, once there,
1) click "messages", 2) enter your query in "search archives".
Members of the Behavioral Finance Group, please voteon the glossary quality at Behavioral-Finance/poll