Jerome Brunner, one of the towering figures in psychology and cognitive learning, developed a simple cognitive theory through framing experience into two models, propositional and narrative. Propositional thinking focuses on logic and formality, while narrative is based on storytelling. Narrative is emotional and needs to be personally convincing. It is the narrative that holds the propositional logic together as a useful tool. Simply put, we cannot develop theory and logic in a vacuum; instead, we use narrative as a tool to support our thinking or convey it through stories. The narrative provides an emotional connection.
We can use that framework to think about how stories are conveyed on Wall Street. Nothing is done through a review of model results. No talking head refers to a model. The models are condensed into a concise story or narrative. The narrative can provide a connection that is not present in a model.
Perhaps an extreme, but Fed independence is not presented as a formal problem in time inconsistency, but as a fight for control over a policy lever. The acquisition of a firm is not described in terms of numbers, although a price is associated with the purchase. There is a discussion of strategic advantage and how the whole will be greater than the sum of the parts.
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