What is self deception in Behavioural finance?
Self-deception is classified as the one of the decision-making errors which impede making reasonable decisions. The efficiency of the financial market is associated with the belief that all the participants of the market behave reasonably.
Self-deception refers to the idea that humans may be missing important information that is required to make an informed decision. People may think they know more than they actually do, which can lead to errors when making financial decisions.
Self-deception involves convincing oneself of a truth (or lack of truth) so that one does not reveal any self-knowledge of the deception.
So, the difference between self-deception and delusion is simple: In self-deception, there is a decision that can be judged as optimal or not, while in delusion, there is a desire or preference that is orthogonal to the question of optimality or rationality.
Self-deception helps a person cover up shortcomings and is a coping strategy for negative, uncomfortable emotions. It is a way of thinking that allows a person to justify false beliefs about himself and others. No one is immune from self-deception and most of the time we are unaware that we are engaged in it.
Self-deception is seeing the world the way we wish it to be rather than the way it is. When people have a self-deception, they use their hopes, needs, desires, theory, ideology, prejudices, expectations, memories, and other psychological elements to construct the way they see the world.
But if we took the time to look for it earnestly, we'd likely find many examples of it in our lives. For example, we may be pretending we still like a job or career when we don't anymore or concealing our disappointment in ourselves for giving up on our dreams and goals.
Minimally, self-deception involves a person who (a) as a consequence of some motivation or emotion, seems to acquire and maintain some false belief despite evidence to the contrary and (b) who may display behavior suggesting some awareness of the truth.
Self-deception refers to a state in which individuals are unaware of their own biases, assumptions, and behavior patterns that prevent them from seeing the world as it is. As a result, the human mind naturally tends to justify actions and beliefs, even if they do not align with reality.
Self-deception, for Smith, is an impediment to self-knowledge and moral understanding. If a person does not clearly perceive his character, and its manifestations in action, then he is less able to act morally, and to make amends for previous acts of injustice.
What is the root cause of self-deception?
Desire is at the root of self deception. A combination of sensation and thought form desire. Desire works with belief and hope to propagate the self deception. Belief is accepting something to be correct because we desire it to be so.
These paradoxes reach their peak in the phenomenon that involves deceptive lying to oneself, the so-called literal self-deception: the literal self-deceiver supposedly believes that not-p and intentionally causes herself to believe that p by lying to herself (i.e. by telling herself that p is true).
Thus, we consider various types of self-deception, including biased infor- mation search strategies, biased interpretive processes, and biased memory processes.
Self-deception allows one to behave self-interestedly while, at the same time, falsely believing that one's moral principles were upheld. The end result of this internal con game is that the ethical aspects of the decision “fade” into the background, the moral implications obscured.
delusion fantasy mistaken belief self-deception sophistry. self deception (noun as in delusion)
four such enablers: language euphemisms, the slippery slope of decision making, biased perceptual causation, and the constrained representation of our self.
Apparently, self-deception is associated with the group of phenomena related to defense mechanisms, so the issue is about differentiating one notion from the other in order to determine the specific character of self-deception.
This is called “self-deception.” Self-deception is a personality trait and an independent mental state, it involves a combination of a conscious motivational false belief and a contradictory unconscious real belief (von Hippel and Trivers, 2011).
Professors of philosophy Francisco Marchi and Albert Newen said we have an evolutionarily developed tendency toward self-deception. With few changes, moderate self-deception helps us feel good about ourselves and others in normal times. But in times of great change, self-deception is costly.
Self-deception (along with internal conflict and fragmentation) may serve to improve deception of others; this may include denial of ongoing deception, self-inflation, ego-biased social theory, false narratives of intention, and a conscious mind that operates via denial and projection to create a self-serving world.
Is self-deception intentional?
Philosophers who deem self-deception conceptually or psychologically impossible typically contend that deceiving, by definition, is an intentional activity and that putative self-deceivers, therefore, must intentionally deceive themselves.
Take responsibility for what is in your locus of control. Don't use others' actions as excuses for you not living your values. This is one of the most common ways we get stuck in self-deception. Don't get wrapped up in spotting self-deception in others, and don't get stuck beating yourself up.
The only significant difference is that in self-deception one is not deceiving others but oneself. This difference may sound harmless, but it is not. It takes complicated and controversial assumptions about the nature of the human mind to avoid that deceiving Page 2 2 oneself appears paradoxical.
Anybody who tries to pretend the contrary is indulging in self-deception or hypocrisy. Our parents and grandparents seemed to need the protection of an armour-plated self-deception to cope with the harsh realities of life. It is self-deception to pretend that that is not so.
Positive self-deception, on the other hand, is more helpful to us, especially when we are facing difficult times. When tough times strike, do you want to hope for a better future, see yourself as capable and in control to make all the changes you require; or do you prefer to give up?
