Introduction

The theory of cognitive dissonance theory can explain our motivation to seek the information that drives our choices. When investors are engaged in their investments and even for some time afterwards, they continue to search for information and make judgements and, both the search and the judgements are guided by this engagement. In the context of investment decision-making, cognitive dissonance can also explain the patterns in the news cycle, and even the famous ‘wall of worry’.

Part of the Finology short course, Behavioural Finance - Investment Decision-Makin...