Are investors really willing to agree to disagree? An experimental investigation of how disagreement and attention to disagreement affect trading behavior

Using a series of laboratory markets, this paper provides evidence that a willingness to engage in speculative trade is largely driven by a failure of traders to account for information about value implicit in other traders’ actions and that this behavior arises because traders construct myopic mental models that ignore the perspective of other traders. In a baseline set of markets, where traders are prompted to estimate fundamental value but are not overtly prompted to consider disagreement, I find that traders are generally insensitive to adverse selection and readily engage in suboptimal, speculative trade. Moreover, this effect does not decline across trials suggesting that market feedback alone is unlikely to correct traders’ behavior. In contrast, when traders are prompted to assess disagreement over asset values or when they trade in more transparent markets, they appear less willing to “agree to disagree.” These results provide insight into why investors depart from rational trading strategies and how investor psychology will influence trading behavior.     

Simulation à la Goldman: pretend and collapse

Theories of mind draw on processes that represent mental states and their computational connections; simulation, in addition, draws on processes that replicate (Heal 1986) a sequence of mental states. Moreover, mental simulation can be triggered by input from imagination instead of real perceptions. To avoid confusion between mental states concerning reality and those created in simulation, imagined contents must be quarantined. Goldman bypasses this problem by giving pretend states a special role to play in simulation (Goldman 2006). We argue that this path leads to the resurgence of the threat of collapse (Davies 1994), diluting the principled distinction between simulation and theory use. Exploration of a related method of real-mental states operating in a pretend mode leads to a factually untenable model. Our main goal here is to raise this problem as a challenge for Goldman’s reconfigured simulation theory. Only at the end we will briefly sketch a possible alternative way of quarantine that preserves the replicative element of simulation and avoids collapse. Figure 1 provides a guide to our argument. Fig. 1 Structure of argument

---

Effects of exposure to community violence on school functioning: The mediating role of posttraumatic stress symptoms

This study investigated the association between exposure to community violence (ECV) and school functioning, as well as posttraumatic stress (PTS) symptoms as a potential mediator of the relationship. PTS symptoms are commonly associated with ECV, and are characterized by difficulty regulating emotions and behaviors. Thus, PTS symptomatology may be one mechanism through which community violence impacts school functioning. The community-based sample included 47 low-income African American children (aged 10-13). Results revealed that ECV was inversely related to academic performance and attendance. Symptoms of posttraumatic stress emerged as a mediator of the relation between ECV and academic performance. Results have implications for urban students who face violence in their communities, and emphasize the need for school-based mental health services.     

Introduction to Three Diagnoses of God

This brief article introduces the three articles diagnosing God by Helsel, Capps, and Carlin as examples of a skeptical strain that has been present throughout Judeo–Christian history, suggesting that psychology as an “interrogative” mode is a necessary counterpoint to theology’s dogmatic mode. The three articles are recommended on the basis of their heuristic value for instruction about mental illness, their playfulness and humor, and their potential for reshaping traditional images of God that have been harmful.     

The role of visual perspective in information processing

Social events can be described from the perspective of either a person in the situation in which the event occurs (e.g., “John came into…”) or that of an outside observer (“John went into…”). We find that when individuals are disposed to form visual images, they have difficulty comprehending both verbal statements and pictures when the perspective from which the event is described differs from the perspective from which they have encountered similar events in daily life. Furthermore, the disposition to form visual images increases the intensity of emotional reactions to an event when the event is described from the perspective of someone in the situation in which it occurs. These effects are not evident, however, among individuals who typically process information semantically without forming visual images.     

Dyslexia and dyscalculia: Two learning disorders with different cognitive profiles

This study tests the hypothesis that dyslexia and dyscalculia are associated with two largely independent cognitive deficits, namely a phonological deficit in the case of dyslexia and a deficit in the number module in the case of dyscalculia. In four groups of 8- to 10-year-olds (42 control, 21 dyslexic, 20 dyscalculic, and 26 dyslexic/dyscalculic), phonological awareness, phonological and visual-spatial short-term and working memory, naming speed, and basic number processing skills were assessed. A phonological deficit was found for both dyslexic groups, irrespective of additional arithmetic deficits, but not for the dyscalculia-only group. In contrast, deficits in processing of symbolic and nonsymbolic magnitudes were observed in both groups of dyscalculic children, irrespective of additional reading difficulties, but not in the dyslexia-only group. Cognitive deficits in the comorbid dyslexia/dyscalculia group were additive; that is, they resulted from the combination of two learning disorders. These findings suggest that dyslexia and dyscalculia have separable cognitive profiles, namely a phonological deficit in the case of dyslexia and a deficient number module in the case of dyscalculia.     

Relations between mental verb and false belief understanding in Cantonese-speaking children

Previous research has shown that linguistic forms that codify mental contents bear a specific relation with children’s false belief understanding. These forms include mental verbs and their following complements, yet the two have not been considered separately. The current study examined the roles of mental verb semantics and the complement syntax in children’s false belief understanding. Independent tasks were used to measure verb meaning, complements, and false belief understanding such that the verbs in question were present only in the verb meaning test, and no linguistic devices biased toward false belief were used in the false belief test. We focused on (a) some mental verbs that obligatorily affirm or negate what follows and (b) sentential complements, the content of which is to be evaluated against the mind of another person, not reality. Results showed that only (a) predicted false belief understanding in a group of Cantonese-speaking 4-year-olds, controlling for nonverbal intelligence and general language ability. In particular, children’s understanding of the strong nonfactive semantics of the Cantonese verbs /ji5-wai4/ (“falsely think”) predicted false belief understanding most strongly. The current findings suggest that false belief understanding is specifically related to the comprehension of mental verbs that entail false thought in their semantics.     

When the mental number line involves a delay: the writing of numbers by children of different arithmetical abilities

Our study focused on number transcoding in children. It investigated how 9-year-olds with and without arithmetical disabilities wrote Arabic digits after they had heard them as number words. Planning time before writing each digit was registered. Analyses revealed that the two groups differed not only in arithmetical abilities but also in verbal and reading abilities. Children with arithmetical disabilities were overall slower in planning Arabic digits than were control children with normal arithmetical abilities. In addition, they showed a number size effect for numbers smaller than 10, suggesting a semantically mediated route in number processing. Control children did not need more planning time for large numbers (e.g., 8) than for small numbers (e.g., 3), suggesting a direct nonsemantic route. For both two- and three-digit numbers, both groups of children showed a number size effect, although the effect was smaller each time for control children. The presence of the stronger number size effect for children with arithmetical disabilities was seen as a delay in the development of quick and direct transcoding. The relation between transcoding problems and arithmetical disabilities is discussed. A defect in the linking of numerical symbols to analog numerical representations is proposed as an explanation for the transcoding problems found in some children.