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Investment Madness

Investment Madness

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Published by Manasi Hinge

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Published by: Manasi Hinge on Jul 13, 2011
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09/15/2013

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One example ofthe reasoning mistakes caused by the brain is the

visual illusion.Consider the optical illusion in Figure 1.1.Ofthe two

horizontal lines,which looks longer?

In fact,both lines are the same length.Look again.Although you

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YOUR BEHAVIOR MATTERS!chapter 1

InvestMadness-01 6/1/01 10:10 AM Page 4

know that the horizontal lines are equal in length,the top line still

lookslonger.Just knowing about the illusion does not eliminate it.

However,ifyou had to make some decision based on these lines,

knowing that it is an illusion would help you avoid a mistake.

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