Ethics in Finance

Tendencies

1. Reward and Punishment Superresponse Tendency

People strongly respond to rewards and punishments. Incentives drive behavior.

2. Liking/Loving Tendency

We overlook flaws and trust people or things we like.

3. Disliking/Hating Tendency

We ignore good qualities and exaggerate negatives in people or things we dislike.

4. Doubt-Avoidance Tendency

We dislike uncertainty and rush to make a decision.

5. Inconsistency-Avoidance Tendency

Once we make a decision, we resist changing our mind.

6. Curiosity Tendency

We naturally want to learn, explore, and understand things.

7. Kantian Fairness Tendency

People expect fairness and believe the same rules should apply to everyone.

8. Envy/Jealousy Tendency

We compare ourselves to others and want what they have.

9. Reciprocation Tendency

We feel pressure to return favors or respond to bad treatment.

10. Influence-from-Mere-Association Tendency

We judge something based on what it is associated with.

11. Simple, Pain-Avoiding Psychological Denial

We ignore or distort painful facts because we do not want to accept them.

12. Excessive Self-Regard Tendency

We tend to think too highly of ourselves, our decisions, and things we own.

13. Overoptimism Tendency

We tend to believe things will turn out better than they realistically might.

14. Deprival-Superreaction Tendency

We react strongly when we lose something or think something is being taken away from us.

15. Social-Proof Tendency

We copy what other people are doing, especially when we are uncertain.

16. Contrast-Misreaction Tendency

We judge something by comparing it to something else instead of judging it objectively.

17. Stress-Influence Tendency

Stress can change our thinking and make us react more strongly or irrationally.

18. Availability-Misweighing Tendency

We give too much importance to information that is easiest to remember or notice.

19. Use-It-or-Lose-It Tendency

Skills weaken when we stop practicing them.

20. Drug-Misinfluence Tendency

Drugs can seriously distort judgment and behavior.

21. Senescence-Misinfluence Tendency

Aging can reduce some mental abilities and make learning new complex skills harder.

22. Authority-Misinfluence Tendency

We tend to follow authority figures even when they may be wrong.

23. Twaddle Tendency

People often waste time with meaningless talk instead of focusing on important work.

24. Reason-Respecting Tendency

People are more likely to accept something when they are given a reason for it.

25. Lollapalooza Tendency

Several psychological tendencies can combine and create an extreme result.