Groupthink, Market Bubbles, and Exponential Modes
Robin Hanson recently demonstrated how much a contrarian he can be. In a society devoted to individualism, he came out in favor of conformity:
My first reaction was that if he takes that theory seriously, he should reject it.
This is a concrete occasion to revisit a general issue. In general, if you want to believe the truth, then you should just accept the average belief on any topic unless you have a good (and better than average) reason to think the causes of your belief difference would be substantially more informed than average.
On the other hand, although people in our society claim to be individualists, investor behavior during market bubbles show how easily the same people can move their opinions towards the average. Speculative bubbles are a classic counterexample to “the majority is reliable.” It can be financially dangerous to move your opinion on the price of an investment towards majority opinion during a bubble.
On the gripping hand, if you reject anything that looks like a speculative bubble out of hand, you might miss the next exponential mode (another Robin Hanson theory).
These apparently “odd” opinions fit together…