What Color is the Dress? Political Edition


I had a conversation with a medical doctor 2 days ago-we looked at the now infamous Inauguration comparison images and he stated that “he wasn’t quite sure which image had the largest crowd”. Wow. We are just in a brand new place where objective facts and evidence are meaningless to a large group of people. Psychology does provide justifications for this. Cognitive biases like the confirmation bias and the backfire effect can explain why people would reject evidence that does not conform to their worldview. It is just so amazing to engage with people who you think should know better resort to mental gymnastics to explain their unsubstantiated worldview.


Last night, Rachel Maddow  discussed results from a PPP poll asking about the new Trump administration. Take a look at the chart below.  There is a bubble alright…two bubbles. The Trump supporter bubble…and the everybody else bubble.

President Trump appears to have his own reality where he is sacrificing trust in the White House to claim that 3-5 million undocumented immigrants illegally voted in the election and that his Inauguration was the largest ever–both easily prove falsehoods (or lies).  The good news is that a plurality of the people still believes in the objective truth.


Why discuss politics and psychology on a personal finance blog? Now, this is a matter of financial security for our customers and readers. White House policies from Obamacare repeal with no real plan for replacement, deregulating Wall Street and eliminating Dodd-Frank, weakening the Consumer Financial Protection Bureau, Infrastructure spending plan that is just tax breaks for Trump’s friends, and a tax reform plan that may raise taxes on the middle class are all affronts to the financial wellness of our customers. Trump’s Tax plan has been published and analyzed-it benefits top earners the most-as much as 7% and only 0.6% on the bottom quintile.


“A single parent who’s earning $75,000 and has two school-age children, they would face a tax increase of over $2,400,” Batchelder says. That’s if they had no child-care deductions; the increase in taxes comes partly because the Trump plan eliminates the $4,000 exemption for each person in a household.

Source: NPR, Who Benefits from Donald Trump’s Tax Plan

Facts matter. The truth matters. It matters that the Obamacare repeal and replace plan will leave more people without health insurance. President Trump may try to shower himself with praise after the Obamacare repeal and claim that the replacement is “terrific!” We the People, need to embrace the truth and recognize that the “shower of praise” isn’t rain-it’s something entirely different.


No Room for Seconds

A friend invites you over for Thanksgiving dinner. You can bring a $100 dollar bottle of wine but it’s not acceptable to give the host $100. Dan Ariely discussed this concept and many other forms of social & cognitive bias in his book, Predictably Irrational.  Obviously, the economic value of the bottle of wine and $100 is the same; yet, socially acceptable behavior is not consistent with economic value. Could we use social factors to positively impact behavior?

The Buffet

Picture yourself at a buffet or a family BBQ. The first plate on your first trip gets piled high. You go back for seconds and maybe thirds. You even grab a doggy bag or a “plate” on your way out. If it’s a holiday dinner with family – you may be compelled (or required) to eat as much as you’d like and more – even if you’re past full.

Work Lunch

Behavior can be very different when your at work and on the clock. How often do you see someone go for seconds at a “pay by the pound” deli? For instance, you may have a salad or sandwiche during a 45-minute work lunch that hardly fills you up. Do you go back for seconds? In this case, time is limited and cost is a factor. Thus, there is no room for seconds.

Behavior Hacks

Organizations like Cross Fit and Weight Watchers leverage support to empower members and positively impact behavior. Other factors including time and cost can have an impact on how much food we do (or don’t) consume. In addition, there are small tricks like using a smaller plate or a special plate with recommended portion sizes. We have sufficient evidence that we can change our behavior with the right hacks. How would you use these hacks to achieve goals like saving money, eating healthy or losing weight?

Millennials in a Modern Society

There is no doubt pressure exists in our ever growing capitalistic society. Although most can relate to the pressures of the society, it is our young generation, the Millennials who are feeling it the most. Student loan debts are rising and the competition for the jobs are getting tougher and tougher for the Millennials. The reality of financial insecurity can be stressful but is there something deeper we are not seeing that is attributing to the stress? Are we attaching something that makes us feel good about ourselves within external success? Amongst the constant noise of advertising and media, social media has emerged as an essential part of our lives. Social media plugs us into a world that is constantly letting us know what our friends or people around us are doing. This technology also gives us an opportunity to compare ourselves to others constantly. In a highly competitive climate for the upcoming generations, expectations are rising and with it comes a shaky and anxious ride to fulfill the basics of self-esteem and worth.

The author and philosopher, Alain de Botton articulated this epidemic as status anxiety where one’s self-esteem is rooted by the perceptions of others, whether we’re judged by success or failure. Status anxiety is the idea of how we tend to attribute a higher value to people who are deemed successful (type of job, money, fame) and do the opposite to people seen as a failure. That is why we might cringe or look forward to hearing the question of “What do you do?” when we first meet someone. One of the ideas explored in de Botton’s work is the idea of a meritocracy and how we associate someone’s high or low value based on the implicit assumptions of a meritocracy. From the beginning, we are all told that we can be successful and that we can be whatever we want to be. At least that is the implication of a meritocracy, that wherever someone ends up is based on merit. This implicitly means that if we get to the top or end up at the bottom, we ourselves are responsible. But is that always the case? The revered 20th century political philosopher, John Rawls came up a thought experiment to show how our own societies could be unfair. He said to imagine ourselves in a conscious state before we are born but without knowing what circumstances we are going to be born into: the veil of ignorance. The vulnerability of not knowing what circumstances of intelligence, type of parents, social, economic condition, or area we will be born into can allow us to see how risky it is to be randomly born into many undesirable circumstances. This technique exposes the injustices of our society, the ignorance of the way we see our society, as well as create a vision of what kind of society we would want to live in. The possible variables attributed of what society deems as success or failure might not always be deserving or undeserving. De Botton points out that even though as flawed as the old aristocratic societies were, you at least knew the unfairness transparently if wherever you are born into. Considering De Botton’s investigation of the meritocracy structure and applying Rawl’s thought experiment we might see how that our own judgments of ourselves or others might be made on unfair assumptions. The reality is that there is many variables involved that might be with or without our control that might attribute to our successes or failures, and even though we strive to be that, perhaps our society cannot be totally meritocratic.

In a 2012 study, Millennials’ top sources of stress were work (cited by 76%), money (73%) and relationships (59%), the economy came in fifth, at 55%, just behind family responsibilities, cited by 56%. The survey found that 19% of Millennials have been told they have depression, compared with 14% of Generation Xers (ages 34-47); 12% of Baby Boomers (ages 48-66) and 11% of those ages 67 and older. And more Millennials than other generations have been told they have an anxiety disorder: 12% of the youngest, compared with 8% of Gen X, 7% of Boomers and 4% of the oldest. So you could be saying so what? This time period in life can be a difficult one with economic instability and the growing pains of adulthood, Yet, it might be fair to speculate the possible side effects of being born amongst the constant technological stimuli, social networking, and expectations to succeed in a world that tells you where you end reflects your total character. It is still a new phenomenon to be able to control a digital platform or profile in which we can be seen by the world. We release the parts of ourselves we choose to share and obtain information about our friends or people around us in the same way. These platforms provide great potential of enhancing our need for the approval of others or comparing ourselves to others. A 2013 study demonstrated the pressure that Millennials admit to keep up with the financial habits and lifestyles with their friends. Reporting that 61% need money from their parents to keep up, 64% of Millennials strive to stay on par with their friends with fashion and clothing, and nearly two-thirds experience pressure to keep up with the types of places they eat and the gadgets they carry.

Acknowledging the possibility that our standing in society or life might involve more random and uncontrollable factors can alleviate our need to judge others and feel a little less anxious, but is that enough? A start might to redefine what we call success and focus on what has made people are the end of their lives grateful. What is it that at the end of the day is important? The link between money and happiness is a real one but money has a limit.

Entropy, Probability, and March Madness

March Madness

The score is tied with just a few seconds left. In bound pass to the top of the key, the point guard passes the rock to the shooting guard who throws up a three-point buzzer beater to win the game! If it’s March – it’s time for March Madness. It’s easy to get excited about this American tradition but it is also a major betting event from online brackets to office pools to full on gambling. Why is March Madness such a big opportunity for gambling?


Entropy is the measure of disorder in a system. Think of it as the number of ways you can recreate that system. Sand on a beach offers a good example. We could have a pile of sand or a sand castle. Which item has more entropy (or ways that it can be arranged)? A pile of sand has high entropy. There are nearly an infinite number of ways to re-arrange the grains of sand without changing the structure of the system. The sand castle has low entropy because there are fewer ways to reorganize it.

Pile of Sand
Pile of Sand. High Entropy.

Sand Castle
Sand Castle. Low Entropy.

There is a connection between the chaos and order described by entropy and probability theory. The probability of an event occurring is the number of events divided by the total number of ways an event can occur. High entropy systems or processes are more chaotic or volatile and they can provide more opportunities for an event to occur. For instance, the chaotic big bang eventually led to the conditions for life on Earth. However, low entropy systems would yield a lower probability or likelihood of a specific event.

High Entropy. Chaos.
High Entropy. Chaos. March Madness.

March Madness is a high entropy process. As we all know, anything can happen. We love to see Cinderella going to the big dance. We get excited about the improbable but amazing upset: a low seed team beating a higher ranked team. We also bet on the unlikely event that the undefeated Kentucky Wildcats win the entire NCAA Tournament. Entropy provides opportunities for black swan events and plenty of excitement. At the same time, humans are extremely bad at predicting rare events like the perfect bracket. The odds of picking a perfect bracket have been calculated at 1 in 9.2 quillion. Yes, that’s a quillion.


In this case, uncertainties are resolved over the course of the tournament. The closer we get to the Final Four and the championship game the more knowledge we will have about whether Kentucky can actually go undefeated. In conclusion, enjoy March Madness and friendly wagers. We are, once again, predictably irrational, if we think we can successfully make predictions with a high entropy or chaotic process.

New Year, New Goals, New Beginnings

According to a 2014 study done by the University of Scranton, up to 45 percent of Americans make New Year’s resolutions. But how many will actually succeed? It turns out that only around 8 percent fulfill their goals. People are willing to keep trying to adapt a new lifestyle, goal, or kick a bad habit. The study reports that the most common goals are trying to lose weight, get organized, spend less save more, and enjoying life to the fullest. But then why are so many failing? It is a common myth that setting goals such as New Year’s resolutions is mostly about one’s personal will power but with more research available, it seems that the strategies and attitudes can have more of an impact than previously thought.

Be prepared
First off, it needs to be acknowledged that changing behavior and creating new habits is not an easy feat. To make the commitment is recognizing the fact it will require discipline and practice to consolidate your new lifestyle or goal. To recognize this is not to scare someone of the change but simply become aware that it is a process and not an overnight accomplishment. An engrained behavior actually has a neurological imprint in our brains that interacts like a circuitry when we have made something a habit. The good news is this can be changed with persistence and repetition. It is important to consider the internal attitude held towards this new change such as cultivating patience through practicing mindful awareness. When you practice mindfulness, you are directing your attention to the present moment usually into the sensory experience such as breathing, which is not involving the constant thinking mind and internal narrative of your experience. Programs such as Mindfulness Based Stress Reduction (MBSR) have demonstrated how when your attention is stuck in your thinking mind, you are predominately occupied with the past or future, which can evoke stress or resistance to change. In reality, the present moment is the only moment to be lived, so inherently directing one’s attention into the present enables one to be patient and handle what task is at hand in a more stress-free manner. Consider it as a new beginning or start which can free up the burden of how much farther you are from your goal that you really desire.

Perhaps your goal is trying to move away from a certain lifestyle or behavior that you do not like. It is important to consider a goal that is not only about not participating in a certain behavior or lifestyle like spending money or eating junk food but about moving toward something concretely positive as well. In other words, you are not only running from a negative but moving towards a positive. This goes along with making your goal as explicit and concrete as possible. Research as shown that people who explicitly make resolutions are ten times more likely to attain their goals than people who don’t. This means making clear and concrete goals such as if one’s goal is spending less and saving more, then how much? What is the timeline like for saving? Perhaps track how much you spend and having monthly goals. What are some reward behaviors to replace spending habits for when you want to reward yourself? If you have a clear strategy, then it is more likely be executed since it is less abstract to carry out.

Change your surroundings
Since willpower is less important than previously thought, it is more about learning behaviors and the environmental influences that can potential help or hinder us. The environment in which we live is an underestimated influence in our lives. Whether it is adding reminders of post-it stickers around the house or removing potential hindrances that could trigger our old behaviors, research shows that this is a very significant factor. Arrange your environment in a way to help motivate and promote positive change. This may mean getting a new social circle. It will be difficult, but remember, you are the company you keep.

Keep going
Often people will not accomplish what they first set off to do, but it’s important to remember that even if you slip, keep going. According to John Norcross, a professor of psychology at the University of Scranton, “a majority of successful resolvers said that their first slip actually strengthened their resolution.” Don’t let a slip keep you down permanently; it is important to get back on track and boost yourself forward. It is definitely a challenge, but prepare yourself by learning the skills of mindful awareness. Then, create a smart plan that may involve changing your surrounding at home, at work, or in your social circle. Also, don’t forget to ask for support. Getting support from loved ones can help in the transition to help ease the difficulty of the change. In the end, change is possible. It’s going to take some work, but it will be worth it.

Making Decisions as a Group

A majority of people could probably relate to not speaking up in a group setting with the fear of voicing an unpopular opinion.  Whether you’re in a business meeting or just with a group of friends, dynamics might emerge from the process of creating group decisions.  Group decision making plays an important role in everyday life where social influences impact the problem solving processes towards figuring out the best solution with a given present problem or situation.

Group decision making definitely has its advantages as well disadvantages.  It can allow more information and knowledge to be explored,and the group to chose the best actions towards a solution. It also creates an opportunity of cohesiveness with the group where everyone might feel committed to the same solution.  On the other hand, when a group might seem too cohesive and all committed to the same solution, group decision making sometimes creates an inherit group pressure to fit in and conform to the same solution. According to Irving L. Janis, this occurrence, known as Groupthink, happens when the desire for group consensus overrides people’s common sense desire to critically evaluate the position, the possible alternatives, or express an unpopular opinion.  When a group has or desires a high level of cohesiveness, the vulnerability of Groupthink increases and can bring an opportunity to strong and persuasive leaders to push the group in one certain direction where no one wants to disagree.  The pressure from the external situation to come up with a good decision affects the participants of the group’s confidence of sharing contrary ideas of what has already been presented.  A lot of detrimental decisions are made from symptoms of Groupthink, including decisions that involve heavy financial stock, either from a macro business level or a personal level.  There are ways to spot and combat the negative side effects of group decision making so it is used to a group’s advantage.

It is important to understand the group’s tendencies for group cohesiveness and the dynamics; for instance, you should note if there are there are overbearing personalities.  This might be the first signs of potential negative influences of group decision making.  A leader is a necessary part of a group, but the process of leading is a delicate art that one must be very conscious of doing.  Although a leader might have some of their own good ideas, instead of convincing the group of only their ideas, they can create an environment where ideas are encouraged.  To be a good leader in the context of making group decisions is one that facilitates the group in a way to create as many ideas as possible. For example, they can facilitating a brainstorming session allowing every individual to speak up and voice his or her idea.  Encouraging team members to come up with different alternatives to ideas and positions is a good way to practice thinking in a flexible and open way that also combats symptoms of Groupthink.  It is good to balance each position as well, playing the pros and cons of certain ideas to balance out the perspectives of decisions.  A good group leader is about creating a safe environment where ideas are encouraged and shared with each other.  If the leader and the group are aware of the pitfalls of Groupthink, it can be beneficial to educate each other on the phenomenon so the risk is minimized.  The next time you feel a little nervous about speaking up in a group, whether you are with your friends or in a business meeting, see if you can spot the signs of Groupthink.  If so, know that you are not the only one feeling tentative about sharing; take the step to break the silence and share what you think!  Even if it is not the final and magical solution to the problem, it encourages others to start sharing as well.  Be on the look out and start speaking up!

Janis, I. L. (1972). Victims of Groupthink: a Psychological Study of Foreign-Policy Decisions and Fiascoes. Boston: Houghton Mifflin.

Using Game Theory to Improve Your Finances

You are hanging out with two of your friends trying to decide where to spend the following weekend. Your options are a local spa or Las Vegas. While the more expensive option is a guaranteed good time, you are feeling tight on finances at the moment, and spending over $1,000 next weekend doesn’t feel very wise or comfortable. Then again, your friends seem really excited about the Vegas option and you don’t want to let anyone down.

In the above scenario, you are weighing out your options, trying to make the most favorable decision, not only to you but also in regards to your friends. This strategic thought process is studied by scientists from all different fields and is known as Game Theory. The name is rather appropriate, considering life is really like a game, everything we do is a calculated move, as we try to situate ourselves nicely on the board game of life.

Originally game theory looked at zero-sum games, which tried to prove people operate on a system of exact exchanges, equal parts lost to equal parts gained. For instance you buy your roommate dinner tonight, because she bought you dinner last night. Of course, humans are never that simple all of the time, and so since its origins, gaming theory has expanded into complicated scenarios. In simplicity, it aims to describe why we do what we do in social situations.

How Can You Use Game Theory To Improve Your Finances?

Understanding how people think and why they do what they do gives you a lot of power. You can better understand your loved ones and even yourself; in fact, you can actually use the ideology behind game theory to improve your own life. According to one NYU professor, you can score a better deal on a car using game theory. He says he’s successfully done it at over 11 car dealerships. Business Insider explains that this professor simply calls up a number of dealers, says he will buy a specific car at a specific time that day from the dealership that offers the best price. Since car dealerships work on ‘dominate strategy’ logic, this means they want to make a sale more than they want to make a large profit spread, the Professor gets a great deal from someone.

If you just walk into a dealership, the salesmen are going to be using game theory psychology on you, selling you a car at the price they want. Few businesses use ‘optimum outcome,’ which would be the opposite and mean that they only want to make a sale for full retail price. Always keep this in mind when negotiations are on the table.

Besides getting a better deal on your next car, you can use game theory to improve your finances in many other aspects of life, too. If you are going to buy a house, or anything that involves negotiations, you can get a better deal by thinking outside of the box, and applying game theory to understand the real thought process of the seller and anyone else involved. You can also take note of your own rationalizations to help you spend less and save more. The mind is a powerful thing, the better you understand how it operates, the more control you have over your own destiny and bank account!

Rocking the Boat

Team meetings never begin with the group agreeing to make a bad decision. Yet, current events repeatedly demonstrate how “group think” results in sub-optimal or even disastrous decisions. The US went to war in Iraq based on the belief that there were Weapons of Mass Destruction. As the drumbeat of war got louder, dissenting opinions were silenced. We can also think of other crises like the BP oil spill or General Motors’ refusal to implement a simple, in-expensive design change that would have saved lives. As it turns out, there is evidence that General Motors silenced a whistle-blower that pointed out the issue with the ignition.

This is the Abilene Paradox at work. A group is presented with a problem. The optimal solution to the problem is evident but the members of the group gravitate towards a different solution. To prevent “rocking the boat” other members agree and just go with it. The consensus created by the group becomes unstoppable and dissenting opinions are easily tossed out. This paradox occurs very often in politics. A few issues come to mind, e.g., gun control, immigration, and raising the minimum wage. 90% of Americans agreed that background checks for gun purchases were a good idea. However, both Democratic and Republican politicians did not want to “rock the boat” and pass legislation to prevent gun violence.

According to a survey administered by the Brookings Institution and the Public Religion Research Institute, a solid majority of Republicans, Independents and Democrats are for comprehensive immigration reform. We have a new crisis with young immigrants from Central and South America crossing the border and being granted the right to stay in the US because of a provision in the Patriot Act. There are no shortages of plans to make comprehensive immigration reform with a path to citizenship a reality. Yet, in the face of overwhelming consensus and a growing crisis, politicians do nothing.

At some point, we must stop playing the blame game. It doesn’t help our families, communities or businesses to intentionally make bad decisions. It takes courage to challenge conventional wisdom. We must use data and logic to identify and promote the best solutions. Challenge group think. Fight the good fight. Rock the boat.

The Psychology of Bubbles

Market Bubbles

The history of economic bubbles has indubitably shown enormous impact on certain markets and the public. The term “bubble” is often used by economists to describe how an asset price rises significantly over its fundamental or intrinsic value but then crashes with a market slowdown or contraction. Historical examples of this include the famous stock market crash of 1929; the Dot.com bubble in the U.S. information technology stocks in the late 90’s and early 2000’s; and, the more recent housing and credit bubble that has impacted U.S. and global markets. There is anything from small to large market bubbles that can have either local or even global impact. Although it is easy to see the consequences of these bubbles bursting, price bubbles still puzzle economic theory (Levine and Zajac, 2007). Although there is no clear agreement, price bubbles have been attempted to be explained by the effects of social psychological factors, how people’s thoughts, feelings, and behaviors are influenced by the actual, imagined, or implied presence of others.

From a social psychological perspective an individual’s thoughts, feelings, and behaviors drive our social interactions. Often an individual’s ability to process information from the environment can be overstimulated, so as an adaptive skill, she creates mental short cuts called heuristics in social situations. Although these mental short cuts can help process information efficiently, they can also create cognitive bias which leads to a distortion in an individual’s judgment or thinking. Cognitive bias is present in everyday life but can skew decision making, belief formation, and overall behaviors that can be detrimental to such matters such as economic and business decisions.

The Greater Fool Theory

Especially in highly competitive market landscapes, self belief can be a key adaptive skill for success. The Greater Fool Theory, however, demonstrates the potential destruction of this adaption on a collective scale. It relates to the naturally overconfident investor who buys an over-priced asset and still assumes that he can resell at even higher and inflated price. The goal of this buyer is to seek out even more gullible investors, known as the “greater fools” (David Dreman, 1993). The heart of this stubborn overconfidence is called self serving bias, where one can overlook negative feedback or external stimuli to maintain one’s own self esteem or worth. According to research, people have the tendency to assess themselves to be above average in various positive characteristics such as driving, ethics, productivity, and other desirable traits (Ola Svenson, 1981; Linda Babcock and George Loewenstein, 1997). If this were true in pertaining to a collective society participating in the rise of overpriced assets, the average participant in buying the asset will believe they could outsmart the next buyer therefore creating a chain effect until the asset plateaus and diminishes in value.


Herd mentality and behavior can also help describe how bubbles happen because herd behavior is rooted in how individuals tend to adopt to group behaviors, trends, and purchasing/consuming decisions without planned direction. This has been an exercised theory to help explain market bubbles since herd behavior explains how individuals are driven by irrationality and emotionally-charged decisions through the trend of the group. Another cognitive bias also known as the bandwagon effect, where despite the underlying evidence, people still participate with the trend of the group. From an individual outside of the group, seeing people participating in the group has an attention-grabbing effect that most likely acts as the best evidence of success. The Self Herd theory is an evolutionary theory that proposes the idea that it is instinctual to fundamentally feel safer with more people, leading individuals to gravitate towards a herd. These biological herd instincts could help explain when rationality is bypassed and individuals make decisions based on the trend of the herd.

Bounded Rationality

The basis of bounded rationality is that rationality is only limited to the resources or information one can have to make a decision. For instance, in experimental designs it has been shown that bubbles abated when participants traded repeatedly within the same group (Levine and Zajac, 2007). The basis of this adaptive bias is that our minds are built to adapt the best we can given the information present in the social situation. It seems that this effect could accumulate in small groups when individual cognitive processing is limited to the knowledge of the group such as wrong pricing of the intrinsic value of the asset.

Normative Institutionalism

Similar to herd behavior, economic theorists have talked about the effect of how social norms could play a significant role in market bubbles. Groups often hold onto implicit rules and expectations for the participants of the group to follow, which in time become internalized into preferred behavior by the group. For instance, the simple impulse of saying “bless you” when a person sneezes demonstrates a norm. These norms differ from culture and environment, but in all societies, become an overarching influence in behavior. Therefore in an economic market, direct communication might not be necessary to enable members of groups to internalize a belief: “the mere posting of bid and asks can be sufficient to spread beliefs and sway markets away from intrinsic value” (Levine and Zajac, 2007). This might seem like the exact same thing as herding and although very similar, I refer herding as the direct impulse and instinct to gravitate towards group trends contrary to institutionalism, where the internalization of the working model of expectations or deemed a social norm creates the effect of institutionalism.

Although there has been inclinations to separate each one of these factors to explain the phenomena of market bubbles, I would propose that the complexity of market bubbles is the result of the interactions of these distinct social psychological factors. The fragility of an individual’s and groups’ reasoning and actions can be influenced and swayed by the uncertainty of real world markets. Therefore, individual cognitive bias along with social influence could create large sways in the asset prices increases, creating bubbles imminent crashes.

Levine, Sheen S.; Zajac, Edward J. (2007-06-27). The Institutional Nature of Price Bubbles.
Dreman, David. “One More for the Road?” Forbes. New York, 1993, 363.
Svenson, Ola. “Are We All Less Risky and More Skillful Than Our Fellow Drivers?” Acta Psychologica, 1981, 47, pp. 143-48.
Babcock, Linda and Loewenstein, George. “Explaining Bargaining Impasse: The Role of  Self-Serving Biases.” Journal of Economic Perspectives, 1997, 11(1), pp. 109-26.