Out-of-control pattern invention

Not to come across like president of the Jason Zweig fan club or anything, but he has another very good column today, tying some recent research about feelings of lost control and pattern invention to some of the more conspiracy-minded responses to the current market/economic turmoil.

The research is summarized briefly in this Discovery.com article, and at more length in this recent Science Friday radio broadcast (I linked to both of these in the sidebar the other day; much earlier and unrelated Murketing post on the subject of pattern invention, or pareidolia, here). The upshot is that when people feel that they have no control over their circumstances, they are more likely to believe in false patterns and conspiracy theories and the like.

From Mr. Zweig’s column:

In a related experiment, investors who had been stripped of their sense of control by market volatility were convinced that they had read more negative evidence about a company than they had actually seen — and were less willing to buy the company’s stock.

In other words, when our sense of control is threatened, we feel the natural urge to pretend that whatever information we do have is more complete and reliable than it is. Imagining that we know what’s coming next (even if we think it will be bad) gives us a slight feeling of comfort.