tag:blogger.com,1999:blog-4039434.post6576197070207593439..comments2024-02-26T06:46:53.171-05:00Comments on Rajiv Sethi: To a Man with a HammerRajivhttp://www.blogger.com/profile/13667685126282705505noreply@blogger.comBlogger4125tag:blogger.com,1999:blog-4039434.post-86261988284507768192010-07-24T17:58:28.157-04:002010-07-24T17:58:28.157-04:00Kevin, I understand why you interpreted the statem...Kevin, I understand why you interpreted the statement in that way but that's not at all what I had in mind. Fund managers are well aware of recency effects (and other common behavioral anomalies) and would take countervailing positions if it were profitable. What I was referring to was an evolutionary selection effect whereby money flows to those who have been successful, at the same time as their balance sheets are growing. No adjustment in the behavior of these individuals in response to past performance is required.Rajivhttps://www.blogger.com/profile/13667685126282705505noreply@blogger.comtag:blogger.com,1999:blog-4039434.post-89290409813798076302010-07-24T06:23:59.862-04:002010-07-24T06:23:59.862-04:00"But they did so because such behavior had be..."But they did so because such behavior had been profitable in the recent past, not because they were expressing cognitive lapses in the manner of subjects in controlled experiments."<br /><br />Professor,<br /><br />I can't say that I understand this statement. Isn't the recency effect that you are referring to well documented in controlled experiments? In fact, isn't it one of the most important parts of the behavioral economics literature? I know that Robert Shiller, for instance, talks specifically about recency effects in the section on psychological factors in Irrational Exuberance.Kevin Machizhttps://www.blogger.com/profile/14885917248885247176noreply@blogger.comtag:blogger.com,1999:blog-4039434.post-67328029431713652562010-07-17T01:47:37.658-04:002010-07-17T01:47:37.658-04:00OOPS--here is the link I referred to above to sign...OOPS--here is the link I referred to above to sign the petition for Elizabeth Warren as Head of CFPA. http://act.boldprogressives.org/cms/sign/petition_warren/?source=hillTed Khttps://www.blogger.com/profile/04439145475995731508noreply@blogger.comtag:blogger.com,1999:blog-4039434.post-51712277560815676002010-07-17T01:45:09.894-04:002010-07-17T01:45:09.894-04:00I apologize to Professor Sethi for being off topic...I apologize to Professor Sethi for being off topic---but I feel the appointment of Elizabeth Warren as Head of the CFPA (Consumer Financial Protection Agency) is important, and I even feel so strongly as to say President Obama will be viewed as a failure as President in my mind if he doesn't choose her and get this accomplished. I won't be voting for him in 2012 if Elizabeth Warren doesn't get the job. I strongly encourage all of Professor Sethi's readers and students who care about the future of America to sign this petition to get Elizabeth Warren to head the CFPA.Ted Khttps://www.blogger.com/profile/04439145475995731508noreply@blogger.com