We are not very good at weighing evidence. We make assessments about issues and then decide, but our decisions are often based on our cultural identity. Asked if they can image evidence that would contradict their view and then ask if they would change their minds if presented the evidence, the answer for many was no. These are the findings of Dan Kahan and others who have done research work in cultural cognition. This has been the focus of a growing number of researchers at the cultural cognition project.
The Cultural Cognition Project is a group of scholars interested in studying how cultural values shape public risk perceptions and related policy beliefs. Cultural cognition refers to the tendency of individuals to conform their beliefs about disputed matters of fact (e.g., whether global warming is a serious threat; whether the death penalty deters murder; whether gun control makes society more safe or less) to values that define their cultural identities.
I will argue that systematic modelers are different than discretionary decision-makers who may have a greater cultural bias or are influenced by the cultural norms of their peers in the industry. There is a New York - London global macro bubble and those who are in it are more likely to think alike and look at data differently than the systematic manager who is away from a major city.
Keynes was aware of this when he discussed beauty pageants and the willingness to fail with others rather than thinking on your own, as well as the issue of many being ruled by the ideas of some defunct economist.
“Worldly wisdom teaches that it is better for reputation to fail conventionally than to succeed unconventionally.”
― John Maynard Keynes,
Cultural norms will affect risk perceptions and what data is important in the macro-economy. This is not a well-defined idea in finance, but I think it is well worth further discussion.