Behavioral Psychology : Herd Behavior!

Consider these situations:

1) Financial Crisis:

Why did Economists across the world failed to see through the Financial Crisis that hit the world economy in 2008? There have been a whole set of reasons been put forward for the failure of the Financial Economy to withstand the Sub-Prime Crisis & inevitability of the Credit Crunch. Mostly, it has hovered around inadequate regulation.. incorrect Risk assessment of the financial structured products like CDO,CBS,MBS etc (These are derivative products which is understood by a chosen few.. others are clueless of the risks involved)

Well, the aspect of human behavior has been largely ignored. Paul Krugman, the Nobel Prize winner & famous economist, has advocated that the root cause of the Crisis could be the irrational behavioral traits shown by humans in some situations especially when deciding in a group even though individually they may be rational human beings. This is a new and upcoming branch of finance known as Behavioral Finance which explores the herd behavioral traits in people when they make financial decisions.

Btw: Being irrational.. is being human.. just that you have to consider this irrationality when you are developing those complex mathematical models & financial products.

2)Communal violence:
In a Communal or ethnic violence taking place any where in the world.. you ll find perfectly normal humans behaving irrationally like beasts in groups in those moments of raze & madness.. killing fellow humans. The herd mentality allows them to justify their acts to themselves.

That is why, the World Leaders should take care of the irrationality involved in human behavior & have proper checks and balances else it erupts like a volcano with catastrophic results, as in both the above cases.

Sachin : 'The Phenomenon'

Sachin scored the first double hundred in ODIs recently & the media has gone ga-ga over it. But, he doesn't need this knock to affirm his greatness. Its almost like adding a bucket of water into the ocean.. does that increase the height of the ocean? no it does not. Even if he goes on to add more records to his name, it will just be a side show to the phenomenon called 'Sachin'.
His achievement off the field: the way he has carried himself,his modesty, a role model for all generations across the world, outstrip his greatness on the cricket field. If India goes on to win the World cup next year.. it will be the fitting tribute to this phenomenon. The Team India under Dhoni should win it for Sachin. That will be a perfect culmination of his extraordinary cricketing career. But, even if India do not Win the World cup & Sachin has to retire without that world cup medal around his neck still 'Sachin' : The 'phenomenon' will live for ever.. long after he leaves the cricket field.

What is life?

Meaning of life is tough to know. If you look at it from a purely biological perspective, humans or living organisms as we know them have evolved over billion of years since the universe came into being. Is it just the culmination of the Darwin's theory of natural selection? Is it just a coincidence that life came up on earth? Is it no different from the non-living things like rocks & mountains? Or does life has a meaning far greater then the earthly existence? How are living things different then nonliving?

Well, you may come up with answers like we are made of organic matter.. We grow.. we die.. But, how do you infer that life and death is what it is as we know it.. Life may have a completely different meaning for things we may consider as nonliving. For example, virus (not the electronic virus.. think biology) is a weird kind of entity (we are not sure they are living or nonliving). Strictly speaking, they are living when they are inside your body and the moment they leave your body they become nonliving. So, it is difficult to predict how life will be defined may be 1000 years from now. It could turn out that life is not unique to Earth and it may be more common. It may also be that the universe we live in is not unique & there could be millions like these all around. Knowing where we stand is difficult.. it is like staying in a deep well, unable to find what lies beyond..

No definite answer to the puzzle called life!

What makes people Successful?

Well, you may have read a lot about the essential traits of a successful man. Great pioneers in all works of life have been considered successful. They all have the obvious qualities such as dedication, devotion, discipline, passion for their work and many more. But, one thing that stands out is how they all have channelized their emotions & taken care of it.

Most of us don't realize that how much what we think about ourselves impacts positively or negatively to our chances of doing a work successfully. Proper nourishment of your emotions is a prerequisite to having a successful & fulfilling life. People relate this to EQ ( Emotional Quotient) which is defined as " The ability to identify and manage the emotions of one's self or a group".

Success is more than just emotional intelligence or EQ. Our mind is a complex system which still hides a lot of secrets then it reveals. The conscious mind is what helps us do the daily mundane work, recall faces, names etc.The Unconscious mind is what drives us to take critical decisions. How many time has it happened with you that : you are really bad at remembering birthdays or anniversaries and just on 'D' day you somehow recall your friends birthday or Anniversary. Or you slept at night with an alarm to wake you up early morning to catch a flight or a train & you woke up just before your alarm rang. Well, in all these cases your sub-conscious mind is at work. It goes into hyperactive mode when you are fast asleep but even while you are awake it is active, even though you may not realize it.

The unconscious mind is the source of most of our actions. It is this sub-conscious mind which successful people tap into, knowingly or unknowingly & bring about the change they want to see, within themselves and beyond. How did Thomas Edition invent the electric Bulb? : It took him 1000 attempts to get it right. How many people would have tried that many times? Most of us would have left it, after 10 attempts or a few may have gone up to 100. What kept him going was more then just a hunch, he was tapping into his Unconscious mind which kept assimilating each failure & kept motivating him to try again.

So, pay attention to your unconscious which takes cues from the environment we live in. It is connected to the conscious mind. Have a optimistic outlook towards life & most importantly, don't think negatively about successfully completing a work even though it may seem daunting. Stay calm & cheerful and see how things change in life.

Cricket-mind- howzzat! My prediction of the Cricket World Cup’07

As the countdown to the biggest event in the cricket world ,the world cup’07 ends at the morrow – there will be billions of fans right round the world glued to the events unfolding in the Caribbean islands over the next month & a half. Well, predictions for this world cup is a risky job as most of the heavyweights are closely matched. Still I will stick my head out and predict the possible teams to make it to the semi-finals and of course the eventual winner.
My predictions after the super-eight stage with ranks are:

1) Sri lanka
2) India
3) South Africa
4) Australia
5) New Zealand
6) West Indies
7) Pakistan
8) England

So, the semi-final lineup could be
A) Sri lanka Vs Australia
B) India Vs South Africa

Finals- 28th April’07
Australia Vs India

And hold your breath! Finally India winning this time round, a sweet revenge after four long years.

Lets wait and watch how much of this will be true.. but this is how I see it going. Do spare me if it doesn't workout this way.