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Dr. Daniel Crosby

πŸ‘€ Speaker
368 total appearances

Appearances Over Time

Podcast Appearances

Australian Finance Podcast
Behavioural Investing | Dr Daniel Crosby, PhD

right?

Australian Finance Podcast
Behavioural Investing | Dr Daniel Crosby, PhD

So set that aside for a moment and let's visit some of the seminal research that was done on shared narratives and peer pressure.

Australian Finance Podcast
Behavioural Investing | Dr Daniel Crosby, PhD

So there was work done by a gentleman named Dr. Solomon Ash that was work that was done on conformity or sort of social pressure, peer pressure.

Australian Finance Podcast
Behavioural Investing | Dr Daniel Crosby, PhD

And what he asked people to do

Australian Finance Podcast
Behavioural Investing | Dr Daniel Crosby, PhD

He showed them two cards.

Australian Finance Podcast
Behavioural Investing | Dr Daniel Crosby, PhD

One card had a line on it of a certain length, and then the other side of the card had three lines of different lengths, one of which corresponded to the line on the left.

Australian Finance Podcast
Behavioural Investing | Dr Daniel Crosby, PhD

And he said, which line on the right looks the most like the line on the left?

Australian Finance Podcast
Behavioural Investing | Dr Daniel Crosby, PhD

Now, if I showed you or anyone listening to this program this, every single one of you would get it right.

Australian Finance Podcast
Behavioural Investing | Dr Daniel Crosby, PhD

It's as easy.

Australian Finance Podcast
Behavioural Investing | Dr Daniel Crosby, PhD

I mean, it couldn't be any easier.

Australian Finance Podcast
Behavioural Investing | Dr Daniel Crosby, PhD

But what Ash did was he introduced peer pressure into this experiment.

Australian Finance Podcast
Behavioural Investing | Dr Daniel Crosby, PhD

So the person that was being tested was not sort of in on the joke.

Australian Finance Podcast
Behavioural Investing | Dr Daniel Crosby, PhD

And seven people would go before them and give the wrong answer.

Australian Finance Podcast
Behavioural Investing | Dr Daniel Crosby, PhD

So let's say the correct answer is A. Every one of the seven people before them that were confederates of the experiment would say, it's C, it's C, it's C, it's definitely C. And so by the time they get to the eighth person, 76% of the time, that eighth person gave the answer C and not the correct answer A. Now it's incredible to think that something as easy as judging how long a line is

Australian Finance Podcast
Behavioural Investing | Dr Daniel Crosby, PhD

could be influenced by a shared narrative.

Australian Finance Podcast
Behavioural Investing | Dr Daniel Crosby, PhD

But what's even more interesting is this was done, I think, in the 70s.

Australian Finance Podcast
Behavioural Investing | Dr Daniel Crosby, PhD

But what's more interesting is we can do the Ash experiment today with modern technology and look at people's brain patterns through a fMRI.

Australian Finance Podcast
Behavioural Investing | Dr Daniel Crosby, PhD

And what we find is it's not the part of the brain associated with peer pressure or groupthink that is lighting up.

Australian Finance Podcast
Behavioural Investing | Dr Daniel Crosby, PhD

when these people are getting the line wrong, it's actually the part of the brain associated with sensation and perception.

Australian Finance Podcast
Behavioural Investing | Dr Daniel Crosby, PhD

So that should really blow your mind.