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There are Free Lunches: Behavioral Clues to Live Happy in the Economic World is a blog that intends to present updated and relevant information about the "hidden" and only recently uncovered dimensions of the economic science: the behavioral factors. With this blog we intend to promote in Europe and in the rest of the World, the top research articles and perspectives on behavioral economics, decision making, consumer behavior, and general behavioral science. We aim to be followed by journalists, academics, managers, civil servants, and everyone who wishes to improve their daily interaction with the economic world and consequently, their lives' happiness.

Tuesday, 11 October 2011

Markets don’t think, feel or believe anything (via BusinessJournalism)

The markets believe Greece needs a restructuring.

No, they don’t.

Journalists have been told for decades to “humanize” their stories, so readers might better understand complicated subjects. That’s why when oil prices break through some imaginary “psychological barrier,” tag teams of reporters are dispatched to America’s gas stations to ask customers what they think it all means. The fact that these consumers generally have no idea has not stopped us from dumping millions of words’ worth of clichéd observations about “pain at the pump.”

Attempts to humanize are harmless enough. If writers and editors can’t rid their stories of valueless opinions from people who know nothing about what they’re being asked, they can rest easy knowing that most astute readers will just skip over them.

More insidious is the convention of writing about markets as though they were human beings, such as these examples:

There is alarm at Berlin’s inability to grasp how financial markets think.

The Fed’s hope is to relieve some of the pressure on institutions to sell at fire-sale prices, easing the strains on economic activity and making the credit markets feel more comfortable in buying mortgage bonds again.

Could Egypt destabilize global economy? Markets say no.

NYSE Euronext chief executive Duncan Niederauer can say something. The New York Stock Exchange, in a written statement or through an official, can say something. The market it enables cannot. The “market” is cold and lifeless. It couldn’t order a sandwich, let alone think about the “global economy.”

How we write and edit affects how people think. I can’t say it’s purposeful, but it’s safe to say that anthropomorphism (attributing human characteristics to things) can actually affect how real live people think about the markets.

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