Johannesburg — WHETHER people are making financial decisions or worrying about crime, they are likely to be influenced by what others think. Unfortunately, according to a study in the Journal of Personality and Social Psychology, repeated exposure to one person's viewpoint can have almost as much influence as exposure to shared opinions from several people.

The study, conducted by Kimberlee Weaver of Virginia Polytechnic Institute and State University, Stephen M Garcia and Norbert Schwarz of the University of Michigan, and Dale T Miller of Stanford University, found that hearing an opinion several times creates a sense of familiarity and that we tend to assume that a familiar opinion is a popular opinion. This creates the (false) sense that an opinion is more widespread than it actually is.

The study divided the participants into three groups: a control group, a repeated opinions group and a single opinion group. The control group heard three opinions made by different group members. The repeated opinions group heard one opinion repeated by different group members. Those in the single opinion control group heard one opinion attributed to one group member.

The study revealed that an opinion is more likely to be assumed to be the majority opinion when different group members express their opinion.

However, the study also found that hearing one person express the same opinion several times has nearly the same effect as hearing several people express that opinion.

In other words, instead of correctly estimating the distribution of opinions within a group we tend to think that a familiar opinion is a prevalent one, even when its familiarity is derived solely from one individual.

Which might explain why we can be so easily swayed (manipulated?) by anyone with sufficient clout to have their message propagated by the media.

Ouch

HERE's a reminder of how quickly a derivative position can turn sour: Earlier this week, Cape Empowerment Trust (CET) announced it s CEO had purchased 20000 single stock futures, representing 2-million shares in the company, at between 270c and 271c a share. The next day, the CET share price dropped to 226c. Which, assuming a 10% margin, would create a loss in total value of more than R895000 on an initial investment of about R540000.