Readings 2 Flashcards
The epistemic self-confidence argument involves
showing how prejudice decreases epistemic self-confidence and how decreased epistemic self confidence decreases the quality of financial decision making
Statistical discrimination takes place when
members of a certain social group receive disparate treatment because they are believed to be statisticaclly different from members of other groups in relevant ways.
E.g. if yloan applications form members of group X are rejected more oftan than those of members of group Y, because loan officers believe that members of group X are, on average, less creditworthy, then this counts as statistical discrimination. statistical discrimination is illegal if and only if it involves groups that are defined by characteristics singled out by law for special protection
People who are epistemically self-confident in a certain domain of knowledge have a sense of
possessing sufficient capacities and motivation to obtain knowledge and acquire skills in that domain. Epistemic self-confidence contributes to efficient knowledge acqisition. If you dont trust your capacity to distinguish a good source of information nfrom a bad one, or if you do not have the energy or desire to carry out an investigation, then you will be less likely to end up with an answer to a question.
–> self confident people are for instance more likely than those with a deflated sense of self confidence ot have savings and investment accounts, less likely to have credit card debt investment accounts and less likely to have credit card debt
The free market approach
holds on to the view that biases will tend to disappear in competitive markets. Many economists believe, however, that more interventionist strategies are needed. they observe that the free market approach makes an assumption to the effect that you will spot your own biases as soon as you become aware of the fact taht non biased people do better; in other words, the assumption is that people will learn from their mistakes
Advocates of the interventionist approach to countering cognitive biases believe that
this assumption does not hold in all casaes. Their argument is that in order to learn about your errors and change behaviour, two conditions have to hold: the number of biased actions has to be sufficiently large, and the time period between biased action and perceived consequences has to be sufficiently limited
The principle of wrongful possession states that
if it is inherently wrong form someone to possess something, then it is morally wrong for that person to sell it or buy it. There are many cases where – thanks to special circumstances – it can be wrong for particular people to buy and sell certain things that would otherwise be permissible to buy and sell
Limites due to the principle of wrongful possession
there are some things that people inherently hsould not have – indeed, that should not even exist – and, as a consequence, people should not buy or sell
Incidental limits to the market
there are cases where particular people hsould not sell particular things - things that normally would be permissible to sell - because of special circumstances, such as that they promised not to sell those items, or the items will be dangerous in these special circumstances, or because they have pref-existing duties that require them to do something else other than engage in buying or selling
Inherent limits to the market
There are some things that people aren ormally allowed to own or possess in some way, but which should not be for sale (rejected) There are no inherent limits tot he market. if you can have it, you can buy it; if you can give it away to someone, you can sell it to her
