There was a nice article in Science this week about Memory Conformity, the phenomenon whereby people will alter their own memories to conform with versions of events claimed by others. In the study, even people who correctly remembered a test event would persuade themselves that they had seen something different if their peers claimed to have seen it.

The study used brain imaging to try to figure out how this happens, and their results seem so vague as to be of little use. However the phenomenon itself is fascinating, and I wonder if it explains anomalies like the Angel of Mons, a fairy tale about angels appearing in the sky over British troops in WWI, subsequently believed by some of the people who were there.

The theory seems to me relevant to the financial markets, as the number of opinions in the market tend to collapse to a much narrower range than the breadth of experience and knowledge present would seem to justify. Most people abandon their own memory of precedents, and their own intuitive or formal models, and buy into the consensus narrative for why housing prices should be high, or internet stocks, or whatever.