In his book “Beyond Greed and Fear – Understanding Behavioral Finance and the Psychology of Investing” ; Hersh Shefrin explains a particular human behavior as under:
One way people attempt to shift responsibility is by playing the “blame game”. This game, whereby a client picks someone regarded as an expert and relies on him or her for advice, is usually set up in advance. If things go well, the client takes the credit, attributing the success to his or her own skill. But if things go badly, then the client can attribute the blame to the expert, thereby reducing regret by shifting responsibility for the negative outcome.
Compare this blame game with the following excerpt from “Riding The Roller Coaster – Lessons from financial market cycles we repeatedly forget”
After every crisis, there is a post-mortem process. We all want to know whom to blame for our miseries. Hence, after every market crash, a committee is set up to investigate the reasons for the crash. No committee has ever come up with the conclusion that the rise itself was the reason behind the crash.
Even the governments and the regulators are not left behind in this finger-pointing exercise.
There seems to be a deep psychological reason behind such thinking.
And the need to lay the blame on someone else.
Failure is a part of life for those who try. It is unavoidable and in many cases, even when one has made the efforts to win, victory eludes one and failure stares one in the eye. It is not easy to embrace this situation for most. In almost all such cases, when you do not get the desired results and the enemy is not visible (market forces in this case), one is considered either a fool who got to the situation on account of some stupid decisions and actions; or a victim of the circumstances.
#RidingTheRollerCoaster – 257