Editing Confirmation bias (section)

=== Finance ===
{{See also|Escalation of commitment|Sunk cost}}

Confirmation bias can lead investors to be overconfident, ignoring evidence that their strategies will lose money.<ref name=WSJ /><ref>{{Citation |title=Behavioral finance and wealth management: how to build optimal portfolios that account for investor biases |first=Michael M. |last=Pompian |publisher=[[John Wiley and Sons]] |isbn=978-0-471-74517-4 |oclc=61864118 |year=2006 |pages=187–190}}</ref> In studies of [[election stock market|political stock markets]], investors made more profit when they resisted bias. For example, participants who interpreted a candidate's debate performance in a neutral rather than partisan way were more likely to profit.<ref>{{Citation |last=Hilton |first=Denis J. |journal=Journal of Behavioral Finance |year=2001 |title=The psychology of financial decision-making: Applications to trading, dealing, and investment analysis |volume=2 |issue=1 |doi=10.1207/S15327760JPFM0201_4 |issn=1542-7579 |pages=37–39|s2cid=153379653 }}</ref> To combat the effect of confirmation bias, investors can try to adopt a contrary viewpoint "for the sake of argument".<ref>{{Citation |first1=David |last1= Krueger |first2=John David |last2=Mann |title=The secret language of money: How to make smarter financial decisions and live a richer life |isbn=978-0-07-162339-1 |oclc=277205993 |year=2009 |publisher=[[McGraw Hill Professional]] |pages=112–113}}</ref> In one technique, they imagine that their investments have collapsed and ask themselves why this might happen.<ref name=WSJ />