The blame game – whom to blame?

Yesterday I wrote about “The blame game“. It is a common human trait. However, there is another pattern if you consider who gets the blame. In “Beyond Greed and Fear”, Hersh Shefrin continues:

Of course, for this to work, the person to whom responsibility gets shifted must be seen to have expertise. Otherwise, the client will feel just as much regret for having relied on a novice for advice.

 The person to be blamed must be known as an expert, else the blame comes back in a different form, “How could you trust such a person?” But with an expert, there is a comfort that there is no mistake in trusting the expert.

It’s all in the mind, after all.

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The Blame Game

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.

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Stupid or victim?

Very interesting article regarding how Deutsche Bank is being positioned as a victim rather than one who committed a mistake:

Deutsche Bank’s Troubles Touch a Nationalist Nerve

The following line is especially interesting:

“Instead of parceling some of the blame on Deutsche’s management, many Germans are circling the nationalist wagons. The idea that Deutsche Bank is in large part a victim feeds into an increasingly popular narrative that Germany’s traditions, standards and institutions are under threat from outside.”

Read that in line with the point we made in the book:

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.

It is better to be known as a victim rather than a fool. A fool would get ridicule; whereas a victim would get sympathy – the latter appears to be a better choice.

#RidingTheRollerCoaster – 254

Stupid or victim – which feels better

Failure is a part of life for those who try. It is unavoidable and in many cases, even when someone has made the efforts to win, the victory eludes one and failure is staring in the eye. It is not easy for most to embrace this situation. 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 victim of the circumstances.
Read more at: http://www.moneycontrol.com/news/investing/stupid-or-victimwhich-feels-better_1277796.html?utm_source=ref_article

 

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