Morgan Housel: The Thrill of Uncertainty

Excellent blog post by Morgan Housel on incentives, markets, and addictive behavior.

  • Three types of incentives:
    • Fixed.
  • Changing.
  • Variable interval

Variable interval rewards flood your brain with dopamine because that high is evolutionarily necessary to survive the hellish world of hunting and famine.

So, we have a pretty good idea that stocks will reward us over time. But we have no idea when, or how, or what it will make us endure in the meantime.

It is a variable interval reward. Which is a hell of a drug.


Read the full blog post: Morgan Housel: The Thrill of Uncertainty

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