A train was speeding along the tracks in 19th-century England when a passenger suddenly started smashing windows and waving a handgun in the air. People thought his actions were brought on by what was, at the time, a brand-new and unknown type of transportation. Medical professionals posited the rattling movement and noise of trains might trigger travelers to act erratically, developing the short-term but popular myth of "train insanity."

In this episode of Choiceology with Katy Milkman (), we take a look at how individuals typically overreact to poor quality or incomplete details.

An unexpected explosion in 1889 ripped apart the USS Maine, the United States' biggest warship at the time. The ship sank, eliminating majority of the sailors on board. The Maine had been anchored in Cuba, and regardless of having little evidence, the American public instantly blamed the Spanish for the sinking. Paper editors released headings such as "Remember the Maine, to Hell with Spain!" Nearly a hundred years later, an underwater examination would expose what likely caused the surge.

Historian David Silbey () recounts how public pressure from this disaster pushed the United States to decide that would have enduring consequences for the world..

David Silbey is a military historian and adjuncta teacher and director of teaching and learning at Cornell University. He is likewise the author of A War of Frontier and Empire: The Philippine-American War, 1899-1902 (). His new book is called Wars Civil and Great: The American Experience in the Civil War and World War I ()..

Next, Katy consults with Ned Augenblick () about his research study that shows people's propensity to overreact to weakly supported details and underreact to highly supported details..

You can read more in the paper he co-authored with Eben Lazarus and Michael Thaler, called "Overinference from Weak Signals and Underinference from Strong Signals (.).".

Ned Augenblick is a professor in the Economic Analysis and Policy Group at the Haas School of Organization at the University of California, Berkeley.

Choiceology is an initial podcast from Charles Schwab..

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Important Disclosures.

The comments, views, and opinions expressed in the presentation are those of the speakers and do not necessarily represent the views of Charles Schwab.

Data contained herein from third party companies is obtained from what are considered reputable source. However, its precision, efficiency or dependability can not be ensured and Charles Schwab & Co. expressly disclaims any liability, consisting of incidental or substantial damages, occurring from errors or omissions in this publication.

All corporate names and market information shown above are for illustrative functions just and are not a suggestion, offer to offer, or a solicitation of a deal to purchase any security. Supporting documents for any claims or analytical details is offered upon demand..

Investing includes danger consisting of loss of principal.

The book How to Modification: The Science of Obtaining from Where You Are to Where You Want to Be is not affiliated with, sponsored by, or endorsed by Charles Schwab & Co., Inc. (CS&C o.). Charles Schwab & Co., Inc. (CS&C o.) has actually not examined the book and makes no representations about its content.

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