AFM351 Lecture Notes - Lecture 6: Motivated Reasoning, Randomness, Psychopathy

• School: University of Waterloo
• Department: Accounting & Financial Management
• Course: AFM351
• Professor: Adam Vitalis

Document Summary

Directional goals: a form of motivated reasoning that cause people to evaluate information selectively and search for information that allows them to justify their desired conclusion. Can be unintentionally inherited from superiors or clients. Halo effect: when we like another person, we tend to like everything about that person. Moreover, we tend to develop impressions by more heavily weighting early information received and ignoring later information. Ego depletion: acts of volition, such as exercising sel f-restrain of exerting mental effort, deplete a limited but renewable self -control resource. Randomness and patterns: people tend to be poor intuitive statisticians and are not very adept at distinguishing patterns from random events. Regression to the mean: evaluating a body of work or an average of outcomes paints a more accurate picture of overall performance, because events are likely to regress to the mean over time. Bauer: the effects of client identity strength and professional identity.