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Investment World
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Economics Columns - Simple Economics Spotlight on you?
B. Venkatesh I deliver investment courses at some leading business schools. One feature is common among these students — despite being intelligent, several hesitate to participate in the class discussions. They, perhaps, suffer from what behavioural psychologists call as the spotlight effect. What is it? Suppose you are invited to a dinner party. You have a nice dress that you wore on another occasion last week. Would you consider wearing the same outfit if you knew that the people who attended that occasion would be present at this week’s gathering as well? If you are like most others, you may keep the dress aside and look for another one. Why? You believe that people will remember the clothes you wore last week. But the truth is that most may not even remember. That is the spotlight effect. It refers to our tendency to believe that other people are paying closer attention to our appearance and behaviour than they really are. Behavioural psychologists contend that people often do not remember our shortcomings. Less noticed than one thinksIn one experiment, some students were asked to individually enter a room wearing a T-shirt of a pop singer who was not too popular then. These students were obviously self-conscious about the T-shirt. They individually guessed that at least half their peers in the room would notice their weird taste. On the contrary, less than a quarter of those in the room paid any attention at all. Similar experiments have found that people exaggerate by up to six times the percentage of observers who actually notice. Spotlight effect has some economic implications. Your wardrobe, for instance, may be overflowing with clothes so that you can wear something different on each occasion! There is nevertheless some social utility in the spotlight effect. You may give more thought to what you are doing because you believe people are watching you. But such self-conscious behaviour should not stop you from not doing anything at all for the fear of being ridiculed — in the class and elsewhere. More Stories on : Economics | Simple Economics
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