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Wall Street misreads music, plays on

I think I've identified the underlying cause of the nightmare on Wall Street.

It's called the Goldovsky effect.

Once you absorb its message, you may never again fully trust financial advice. Or medical advice. Or legal advice. Or your waiter's recommendation on the osso bucco.

In fact, you may eschew expertise altogether in favor of the jabberings of televangelists, surly preteens, the Moviefone guy and Snoop Dogg.

I, for one, know with certainty that neither of my golden retrievers at their friskiest could have possibly led us this far from the jogging path of righteousness.

“Human error has three root causes: we are inherently overconfident, oblivious to our limitations and unlikely to learn from our mistakes.”

I stumbled upon the Goldovsky effect while reading "Why We Make Mistakes" by Joe Hallinan, a Pulitzer Prize-winning journalist formerly with the Wall Street Journal. The book itself -- with its undersized, misaligned, intentionally ill-fitting flyleaf -- is the perfect gift for the OCD loved ones on your list.

As a certain phylum of reporters is prone to do, Joe collects newspaper clippings of real-life human blunders.

I'm guilty of the habit, too. One from my personal collection involves a masked teen who one night pulled into the drive-through of the fast-food restaurant that had recently canned him and demanded cash at gunpoint.

Of course, everybody from the window tender to the fry cook recognized his voice. And his car.

Mortal misfires
I suppose our purpose in collecting these mortal misfires is as vague as our calling to the journalism profession itself, although both go well with beer.

But Joe takes his foible file one step further and actually seeks answers for our misfires in the infinity-edge reflecting pool of behavioral science.

There, he finds explanations for all sorts of human quirks and curiosities, only a few of which suggest self-medication.

For instance, did you know we all have an inordinate preference for the number seven and the color blue?

Or that right-handed people tend to instinctively turn right when entering a building?

Or that most of us mistakenly believe our first answer on a test is our best answer (it's not)?

Curiosity led Joe to discover that human error has three root causes: we are inherently overconfident, oblivious to our limitations and unlikely to learn from our mistakes.

Requiem for Wall Street
Which brings us to the Goldovsky effect.

Boris Goldovsky was a distinguished piano teacher and sight-reader who from 1943 to 1990 provided the commentary during Saturday afternoon radio broadcasts from the Metropolitan Opera in New York. He died in 2001 at age 92.

One day, Goldovsky was tutoring a beginner on a much-used edition of a Brahms capriccio (Opus 76, No. 2) when the poor girl hit a sour note. When the teacher asked her to correct her mistake, she gave him a puzzled look and said she had played what was written.

To Goldovsky's surprise, she was right: There on the sheet music was an errant G-natural note where a G-sharp should have been, given the musical context of the piece. What's more, the same clinker was found in all editions.

Not only had virtually all seasoned professionals misread the music, they had all misread it in exactly the same way. Subsequent experiments found that when several altered notes were placed in the sheet music, the musician's proofreading errors didn't go down the second time playing the piece -- they went up!

As Hallinan observes: "As something becomes familiar, we tend to notice less, not more. We see things not as they are, but as (we assume) they ought to be. This ingrained behavior can cause us to overlook not only small things, like altered musical notes, but some that are surprisingly large."

Hello, Wall Street? Boris Goldovsky on line one.

If you have a comment or suggestion about this column, write to Bank Shots.

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