- Cognitive Dissonance
- The unpleasant emotion that results from believing two contradictory things at the same time. The study of cognitive dissonance is one of the most widely followed fields in social psychology. Cognitive dissonance can lead to irrational decision making as a person tries to reconcile his conflicting beliefs.
Let's say an investor decides in advance that he is going to purchase shares of a firm when the price drops to $78 a share. The price is currently at $80 a share. All of a sudden, the company's stock price starts going up. The investor's belief that the stock would be a good buy at $78 seems to be contradicted by the stock's current behavior. The investor decides to buy at $85 instead of $78 to reconcile the cognitive dissonance he is experiencing. This may not be as good of an investment decision, but the investor will rationalize himself into thinking it is, mainly to get rid of his feeling of cognitive dissonance.
Investment dictionary. Academic. 2012.
Look at other dictionaries:
Cognitive dissonance — cognitive dissonance … Dictionary of sociology
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cognitive dissonance — n psychological conflict resulting from simultaneously held incongruous beliefs and attitudes (as a fondness for smoking and a belief that it is harmful) * * * anxiety or other unpleasant feelings resulting from a lack of agreement between a… … Medical dictionary
cognitive dissonance — 1957, developed and apparently coined by U.S. social psychologist Leon Festinger (1919 1989) … Etymology dictionary
cognitive dissonance — n. the confused mental condition that results from holding incongruous, often mutually contradictory, beliefs simultaneously … English World dictionary
Cognitive dissonance — The Fox and the Grapes by Aesop. When the fox fails to reach the grapes, he decides he does not want them after all. This is an example of adaptive preference formation, which serves to reduce cognitive dissonance. … Wikipedia
cognitive dissonance — A major cognitive theory propounded by in A Theory of Cognitive Dissonance (1957). The theory addresses competing, contradictory, or opposing elements of cognition and behaviour: for example, why do people continue smoking, when they know that… … Dictionary of sociology
cognitive dissonance — A state of mental conflict caused by a difference between a consumer s expectations of a product and its actual performance. As expectations are largely formed by advertising, dissonance may be reduced by making only realistic and consistent… … Big dictionary of business and management
cognitive dissonance — Term introduced by the American psychologist Leon Festinger (1919– ), whose Theory of Cognitive Dissonance (1957) directed interest to the ways in which the drive to reduce ‘dissonance’, or the sense that something is wrong in one s system of… … Philosophy dictionary
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