[W]hat I’m saying here is that the human mind is a lot like the human egg, and the human egg has a shut-off device. When one sperm gets in, it shuts down so the next one can’t get in. The human mind has a big tendency of the same sort. And here again, it doesn’t just catch ordinary mortals; it catches the deans of physics. According to Max Planck, the really innovative, important new physics was never really accepted by the old guard. Instead a new guard came along that was less brain-blocked by its previous conclusions. And if Max Planck’s crowd had this consistency and commitment tendency that kept their old inclusions intact in spite of disconfirming evidence, you can imagine what the crowd that you and I are part of behaves like.
Charlie Munger (from fs.blog)
Once we get an idea in our head, it is hard to be open to a new idea. This is a clear bias that cannot be easily solved. This has been called the belief perseverance bias which includes several variations and is closely related to cognitive dissonance.
Belief perseverance biases can include conservatism, confirmation, representativeness, the illusion of control, and hindsight. We could also include information biases like anchoring within this group. Do not think for a second that you can just will not to have this bias. It takes a lot of discipline to offset this bias, so quantitative decision-making may be the best way to avoid it. There are no easy solutions to the closed mind.
However, even a quantitative model may have a problem as a human egg. Markets change and a model that is based on old data is like a closed mind. This why models have to be retrained and recalibrated with new data.
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