Situation, Cognition, Emotion, and Personality

Stephen Greenspan writes in the wsj.com article Why We Keep Falling for Financial Scams of the traits that causes us to be gullible. Some good historical fleeces are referenced such as Tulipmania (In the 1630s, tulip-bulb speculation raged in the Netherlands. Prices
of some rare bulbs doubled weekly, or even daily, and rose so high that
people were investing in shares of one bulb, rather than an entire
bulb. The market crashed in February 1637.) The South Sea Bubble (The British South Sea Co. was formed in 1711 and promised a monopoly on
trade to the Spanish colonies. It lured investors with the promise of
riches from abroad. Prices of shares spiked and then collapsed in 1720.
Sir Isaac Newton lost the modern-day equivalent of about $1 million.) and the 419 Scam (Many email users are familiar with the 419 fraud, in which scammers
(often based in Nigeria) offer a share in a large fortune in exchange
for a fee. Some cases have gone to trial. In 2005, Amaka Anajemba
(above center) was convicted of taking part in a scheme that defrauded
a Brazilian bank of $242 million.).

The article summarizes the mental tendencies towards gullibility. Greenspan, an expert in gullibility, writes how even the experts fell for the scam.

January 6, 2009 In: Fleeced, Fleecing Fighters, People Comments (None)