Daily mail: House prices fall at fastest rate ever across England and Wales

Conrad

MacMickster wrote: »

I have yet to see anyone actually change their views about house prices on the basis of either the figures or someone else's analysis of them.

This phenomenon has been known to psychology for decades. People are either foxes or hedgehogs. A fox is wise and able to adjust to new information. Foxes have been shown in hundreds of experiments to make better judgments and predictions although foxes tend not to be listened to as they seem to be fence sitters.

Hedgehogs on the other hand 'know' the truth, they are afterall 'realists' aren't they...
Hedgehogs form a view and stick with come what may. Hedgehogs get more attention as they appear to be confident and righteous.
In every experiment ever done, the hedgehogs have been shown to have worse predictive ability. But they also have an uncanny knack of being able to subsequently rationalise thier incorrect predictions - for example 'ah but prices only didn't crash because the VI's dropped rates through the floor'.

When hedgehogs are shown later to be wrong they suffer with cognitive dissonance, and they seek to assuage this temporary loss of confidence by reinterpretting what they said in the past, or by claiming they were right all along, it's just other Humans did things that put thier prediction off course (so the supposed American famine predicted for the 1970s was put off course by the green revolution - ermmm yes that's what man does when faced with a problem - he solves it and alters the future - you don't say)

Tony Benn is a classic hedgehog, he starts out with a world view and ignores, even ridicules any evidence that does not fit. He his right, end of, period.

Graham_Devon

Hedgehogs and foxes!? !!!!!!.

Conrad

Graham_Devon wrote: »

Hedgehogs and foxes!? !!!!!!.

Berlin expands upon this idea to divide writers and thinkers into two categories: hedgehogs, who view the world through the lens of a single defining idea (examples given include Plato, Lucretius, Dante, Pascal, Hegel, Dostoevsky, Nietzsche, Ibsen, and Proust) and foxes who draw on a wide variety of experiences and for whom the world cannot be boiled down to a single idea


Philip E. Tetlock, a political psychology professor in the Haas Business school at UC, Berkeley, draws heavily on this distinction in his exploration of the accuracy of experts and forecasters in various fields (especially politics) in his 2005 book Expert Political Judgment: How Good Is It? How Can We Know?.



http://en.wikipedia.org/wiki/The_Hedgehog_and_the_Fox

Conrad

More on Foxes and Hedgehogs here;

The core of Gardner’s account comes courtesy of the research of Philip Tetlock, a psychologist at the University of California. In a nutshell, Tetlock determined that “experts” in any given field were just slightly better at making predictions than a dart-throwing chimp. In addition, the more certain an expert was of a predicted outcome, and the bigger their media profile, the less accurate the prediction was likely to be.


and why we are so easily conned by glib “hedgehogs” (experts who are certain of one big thing) and less impressed by thoughtful “foxes” (experts comfortable with their doubts and limitations).


Gardner’s ultimate point – that we need to cultivate skepticism and engage in cost-benefit analyses based on the probabilities of future outcomes


http://www.amazon.ca/Future-Babble-Expert-Predictions-Believe/dp/0771035195

Thrugelmir

MacMickster wrote: »

but I have yet to see anyone actually change their views about house prices on the basis of either the figures or someone else's analysis of them.

Unlike football where a team can sign new players or change the manager. The issues that face the property market following the financial crash of 2008 are far from resolved. If anything the subsequent events and relevations have pushed certainty further into the distance.

From the early 2000's the topic of conversation was how long house prices could carry on rising. With hindsight the UK mortgage lenders invention of mortgage securitisation appears to have provided many of the answers.

This is the ball that is now coming back towards the home goal.

Conrad

Thrugelmir wrote: »

Unlike football where a team can sign new players or change the manager. The issues that face the property market following the financial crash of 2008 are far from resolved. If anything the subsequent events and relevations have pushed certainty further into the distance.

Ha! You just made my day.

Your response here is the exact predicted response expected by a hedgehog - serioulsy, read the book called 'futurebabble' and you'll see what I mean.

In a nutshell the book summarises that the reason 99% of big picture economic predictions fail, is that billions of Humans can alter the things they do, each one of whom can have any one of trillions of new thoughts, which in turn leads to totaly 'chaotic' unpredictable outcomes.

What a hedgehog does is to take todays landscape and linearly extrapolate from this current reality, but this approach almost always fails. Don't take my word for it, read the book. It will change the way you think - unless you are too far gone.:A

IveSeenTheLight

Thrugelmir wrote: »

Unlike football where a team can sign new players or change the manager.
.............
This is the ball that is now coming back towards the home goal.

What additional signings are likely to be made for the defence by the government?

Being able to influence the rules could mean the ability to defend ones position and then progress up the park again

Conrad

IveSeenTheLight wrote: »

What additional signings are likely to be made for the defence by the government?

Being able to influence the rules could mean the ability to defend ones position and then progress up the park again

The Hedgehog cannot compute this.

Instead he draws a linear line from the current evidence to reach an 'obvious' preidction of where we're headed.

Of course Humans aren't linear though, and they can and do alter the course just as the BOE, massivly reduced rates which none of the Hedgehogs had properly forseen.

This time will be different though.... armageddon for sure...

Lets hold them to thier predictions 2 years from now.

geneer

:rotfl: Cracking headline in the mail.

No wonder the bulls are babbling about random animals.

Pimperne1

These newspapers make me laugh. Clearly the Editor of the Mail has a vested interest in house prices falling (I expect he's an STR and want to make a purchase at the expense of a hard working BtL). Really, at least no-one reads the Daily Mail.