of Gross Domestic Product (GDP) decline, you cannot know you are in a recession until you are atleast 6 months into one. Unfortunately, at the first sign of decreasing GDP, the media reports a possiblerecession, people panic and start a chain of events that actually cause a recession.6.THE HALO EFFECTThe Halo effect is the tendency for an individual’s positive or negative trait to “spill over” to other areas of their personality in others’ perceptions of them. This bias happens a lot in employee performance appraisals. For example: my employee, Biff, has been late to work the past three days; Inotice this and conclude that Biff is lazy and does not care about his job. There are many possiblereasons why Biff was late, perhaps his car broke down, his babysitter did not show up, or there has been bad weather. The problem is, because of one negative aspect that may be out of Biff’s control, Iassume that he is a bad worker.
The Physical Attractiveness Stereotype is when people assume that attractiveindividuals possess other socially desirable qualities, such as happiness, success and intelligence. This becomes a self-fulfilling prophecy when attractive people are given privileged treatment such as better job opportunities and higher salaries.5.HERD MENTALITYHerd mentality is the tendency to adopt the opinions and follow the behaviors of the majority to feelsafer and to avoid conflict. Also known as “Mob Mentality,” this is, at its most common form, peer pressure. Herd mentality explains why fads get so popular. Clothes, cars, hobbies, styles, all it takes is agroup of people who think something is cool, and it catches on.
things that are unattractive, or that would never seem cool or popular now have hadhuge followings due to herd mentality. Examples include parachute pants, pet rocks, mullets, cone bras,tie-dye, sea monkeys, and the 1980s (by the way, that is an ’80s guy in the picture above).4.REACTANCEReactance is the urge to do the opposite of what someone wants you to do out of a need to resist a perceived attempt to constrain your freedom of choice. This is common with rebellious teenagers, butany attempt to resist authority due to perceived threats to freedom and/or choice is reactance. Theindividual may not have a need to do the specific behavior, however the fact that they cannot do itmakes them want to.
“reverse psychology” is an attempt to influence people using reactance. Tell someone(particularly children) to do the opposite of what you really want, and they will rebel and actually endup doing what you want.3.ESCALATION OF COMMITMENTEscalation of commitment is the tendency for people to continue to support previously unsuccessfulendeavors. With all the decisions people have to make, it is unavoidable that some will be unsuccessful.Of course, the logical thing to do in these instances is to change that decision or try to reverse it.However, sometimes individuals feel compelled not only to stick with their decision, but also to further invest in that decision because they have sunk costs. For example, say you use half of your life savings