Investing Psychology: The Effects of Behavioral Finance on Investment Choice and Bias, + Website

CHAPTER 9

The Final Roundup

When you go to see a top-class conjuror at work, pulling rabbits from hats and silk handkerchiefs out of the ears and other parts of their scantily clad assistants, hopefully you don't believe that what you're looking at is really magic. You know that what you're watching is a highly skilled act of misdirection, which you're happy to pay for in order to get the privilege of seeing a professional entertainer at the top of his or her game, deliberately setting out to fool your brain, for your own amusement.

Often the magicians are using something called joint attention to fool us. Joint attention is essential to human society because it causes us to focus our attention on the same thing, which is a useful attribute for a social creature if you want to hold a conversation about an object or engage in joint activities. You can demonstrate joint attention simply by standing on the sidewalk and staring up in the air at a random point on a building: if people aren't too busy and distracted by other things they'll start looking in the same direction, trying to figure out what you're looking at. Don't try this in New York, though; you'll probably get flattened.

Magicians use both their gaze and their body language to direct our attention to one aspect of their performance, while the actual trick is going on somewhere else. And even though I know this I still find it incredibly hard to not look where they want me to. Joint attention is automatic and incredibly ...