Discussion - Evidence Based Psychoanalysis: An Imperative and an Opportunity

Freud published his ''On Narcissism: An Introduction'' in 1914. The writing has many levels, including, among other things, Freud's criticism of his former colleagues, Adler and Jung. Psychoanalysts received the essay with reservations. Ernest Jones, among others, expressed his concerns in his history of psychoanalysis. The aim of this study is to place Heinz Kohut's ideas about narcissism into the context of the history of ideas. Especially, the paper explores, at a theoretical level, the status of the castration complex both in self psychology and Freud's essay as well as seeks reasons why the discussion on narcissism should be continued.     

Phantastic objects and the financial market's sense of reality: a psychoanalytic contribution to the understanding of stock market instability

This paper sets out to explore if standard psychoanalytic thinking based on clinical experience can illuminate instability in financial markets and its widespread human consequences. Buying, holding or selling financial assets in conditions of inherent uncertainty and ambiguity, it is argued, necessarily implies an ambivalent emotional and phantasy relationship to them. Based on the evidence of historical accounts, supplemented by some interviewing, the authors suggest a psychoanalytic approach focusing on unconscious phantasy relationships, states of mind, and unconscious group functioning can explain some outstanding questions about financial bubbles which cannot be explained with mainstream economic theories. The authors also suggest some institutional features of financial markets which may ordinarily increase or decrease the likelihood that financial decisions result from splitting off those thoughts which give rise to painful emotions. Splitting would increase the future risk of financial instability and in this respect the theory with which economic agents in such markets approach their work is important. An interdisciplinary theory recognizing and making possible the integration of emotional experience may be more useful to economic agents than the present mainstream theories which contrast rational and irrational decision-making and model them as making consistent decisions on the basis of reasoning alone.     

Spirituality and Intersubjective Consensus: A Response to Ciocan and Ferencz-Flatz

In The Human Place in the Cosmos Max Scheler argues the question of philosophical anthropology must address three problems: (i) the difference between man and animal; (ii) the Cartesian problem of the mind and body; and (iii) the essence of spirit. In a recent issue of Human Studies, two articles by Cristian Ciocan and Christian Ferencz-Flatz addressed the first of these problems through investigations of Husserl’s Nachlass. In this paper, I respond primarily to Ciocan by drawing on Scheler’s phenomenology and the implications this has for understanding Husserl’s phenomenology. By looking at Husserl’s published comments, we can see how the attempt to differentiate between man and animal is bound up with his understanding of spirituality. This allows an alternative way of understanding normality and abnormality which shifts emphasises away from how far we can empathise with the Other (be they man or animal) to emphasise what it means to be normal or abnormal. This will allow us to address an ambiguity of Husserl identified by Ferencz-Flatz.     

Narrative expectations in financial forecasting

How do people form expectations about the future? We use amateur and expert investors' expectations about financial asset prices to study this question. Three experiments contrast the rational expectations assumption from neoclassical economics (investors forecast according to neoclassical financial theory) against two psychological theories of expectation formation—behaviorally informed expectations (investors understand empirical market anomalies and expect these anomalies to occur) and narrative expectations (investors use narrative thinking to predict future prices). Whereas neoclassical financial theory maintains that past public information cannot be used to predict future prices, participants used company performance information revealed before a base price quotation to project future price trends after that quotation (Experiment 1), contradicting rational expectations. Importantly, these projections were stronger when information concerned predictions about a company's future performance rather than actual data about its past performance, suggesting that people not only rely on financially irrelevant (but narratively relevant) information for making predictions but erroneously impose temporal order on that information. These biased predictions had downstream consequences for asset allocation choices (Experiment 2), and these choices were driven in part by affective reactions to the company performance news (Experiment 3). There were some mild effects of expertise, but overall the effects of narrative appear to be consistent across all levels of expertise studied, including professional financial analysts. We conclude by discussing the prospects for a narrative theory of choice that provide new microfoundational insights about economic behavior.