Confirmation bias reinforces existing beliefs from "summary" of Your Money and Your Brain by Jason Zweig
Confirmation bias reinforces existing beliefs because our brains are wired to seek out information that confirms what we already believe. When we come across information that supports our existing beliefs, our brains release dopamine, a neurotransmitter associated with pleasure. This creates a rewarding feeling that reinforces our belief, making us more likely to seek out similar information in the future. As a result, we tend to ignore or discount information that contradicts our beliefs. This is because our brains are naturally averse to uncertainty and discomfort. When we encounter information that challenges our beliefs, it can trigger anxiety and cognitive dissonance, leading us to dismiss or rationalize away the conflicting information. Confirmation bias can be particularly problematic when it comes to making financial decisions. For example, if we believe that a certain stock will perform well, we are more likely to seek out information that supports that belief while ignoring any warning signs. This can lead to risky investment decisions based on incomplete or biased information. To overcome confirmation bias, it is important to actively seek out information that challenges our beliefs and to consider multiple perspectives before making a decision. By being aware of our tendency to seek out information that confirms what we already believe, we can make more informed and rational choices.
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