Feeling like you’re an expert can make you closed-minded

I just came across this article on Research Digest which explores the relationship between expertise and closed-mindedness.  It is definitely worth a read but it got me thinking about decision making.

The article expresses that there could indeed be a strong link between people who feel that they are experts in a field and the dogmatism they provide.  A recent study in the Journal of Experimental Social Psychology published the findings.

So my first thought was does this occur in economics or finance?  We assume that agents are experts in things like ranking their own choices for utility.  Do these dogmatic feelings carry over to here?  I’m sure they do to some degree.  And if this is the case, how does an economist model this behavior?

We use habit persistent utility functions, but what about misidentified preferences?  Generally, our assumptions on preferences require them to be complete, reflexive, and transitive.  This last assumption should hold for “rational” individuals.  It would be interesting to include the dogmatic behavior of agents to see if any tractable results rise to the surface.

A more macro view of this behavior would be to see how individuals in the finance sector absorb information.  Does expertise breed closed-mindedness in this arena?  My intuition says yes.  I believe that there is some persistence to beliefs rooted in some dogma surrounding each institution.  Again, It would be interesting to see how, if at all, this could be measured through econometrics.

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