Acquiring and Updating Knowledge
Thus far we have discussed how attention and memory selectively highlight certain information to the exclusion of other details. We regularly distort incoming information to meet our current purposes. Our recollections reflect and amplify these distortions. In this third section we will discuss the role of our knowledge in altering our focus.
Knowledge spans the gap between attention and memory. It is built up over a lifetime and it actively shapes our focus of attention. We often have little ability to guide how we use our knowledge. Rather, our knowledge frequently guides us and does so very automatically. This strong effect of knowledge on investment performance can make its influence ...
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