"End Period Dominance?"

Years ago, I was discussing an investment result with a business partner. The investment had been lackluster, but suddenly shot up and the impact seemed disproportionate. His comment was that it was "end period dominance." It was a striking term and since he had just gotten an MBA, I assumed it was part of the MBA lingo.

Years later, I referenced "end period dominance" and he looked at me strangely. I retold how I got familiar with the term. He chuckled and told me that he had just made up the term so that we could move on to another topic (I can be obsessive - as my Spinoza studies reveal).

This week new research was published in the Journal of Neuroscience that confirms "end period dominance." Studies show that that two different parts of the brain are activated, and compete with each other, when we make decisions based on past experience. They can cause us to overvalue experiences that end well despite starting badly, and undervalue experiences that end badly despite starting well—even if both are equally valuable overall.

Two parts of the brain are the amygdala and the anterior insula. The part of the brain called the amygdala works out the 'objective value' of an experience, such as a Sum of The Parts valuation. Meanwhile a brain region called the anterior insula was shown to 'mark down' our valuation of an experience if it gets gradually worse over time, such as occurs in trend-following investors.

Not only a likely culprit for an obsession with the end of movies, this "end period dominance" pattern can also affect quality decision-making and is likely to be an objective reason why the political candidates are willing to spend enormous funds to advertise right before the election season. It may be that a "happy ending" disguises an "unhappy experience."

Self-Serving Bias Strikes Again!

Recently I read a blog post on Dr. James Fallon, a neuroscientist who discovered that he had the brain imaging pattern of a "full-blown psychopath." After his discovery, he checked in with family and friends to confirm interpersonal patterns that would indicate psychopathy. As a happily married man, father, grandfather, friend to many and successful scientist, he doubted that he had such traits. However, over the next years, he did identify that he lacked certain empathetic traits but these had been offset by a warm and nurturing childhood. As a result he coined a term for his condition - "pro-social psychopath."

This post caused me to reflect on my own self-assessments. Our "self-serving" biases give us a blind spot with regards to our own characteristics. Dr. Fallon took years after his discovery to become comfortable with the image in the brain imaging mirror. I don't think any of us are immune to the same issues.

When I was in college, I took my first Myers-Briggs personality test as part of a leadership program at the Center for Creative Leadership in Greensboro, NC. The test is certainly not scientific, because it is based on ideas of how you perceive yourself and your interactions with others. I tested as I have tested ever since - an Extroverted, iNtuitive (Big Picture), Thinking and Judgmental (Seeking Closure) personality. However, the personality described as The Commander never really resonated with me (although others have at times agreed with the description!).

Since quarantine, I have had increased time for self-introspection and decided to retake the test with my increased level of awareness as well as a willingness to remove my "self-serving" bias. When I retook the test, I did test differently. I shifted to Introverted, iNtuitive, Feeling, and Judgmental personality. The personality is described as The Counselor which is a much more fitting description of my offline interactions. So how did I get it wrong for nearly 40 years?

I believe that I have consistently defended myself against perceived weaknesses. I think that I believed people who were extroverted were more likely to be successful and popular. In addition, I think that I believed that people who were feelings-based were weak. As a result, I thought myself into these other roles which I could enact. But in my down time, I would naturally gravitate to my true patterns. Was this my personality "preference" or my "orientation"? I have no idea, but clarity on this issue does provide me a greater sense of internal harmony.