"The Consequences of Sense-Making"
Many mental processes can be understood as inferring which hypothesis best explains the available data, including causal reasoning, categorization, and theory-of-mind. In this talk, I sketch an account of what common cognitive machinery underlies these processes and discuss experiments suggesting that three, seemingly far-flung, phenomena that turn out to be best-understood in a framework of explanatory inference. First, I describe how puzzling behavior in financial markets may be a consequence of a tendency toward belief digitization – treating hypotheses as though they are certainly true or certainly false rather than weighting them by their probabilities when making predictions. Second, I show that even math novices experience mathematical arguments aesthetically, demonstrating a surprising degree of consensus when asked to match specific arguments to specific artworks. Finally, I discuss the problem of ineffective charitable giving, arguing that these behaviors result from a process of social signaling, best understood as choosing what evidence we want others to interpret so as to maximize our perceived moral character. Together, these lines of work show that basic cognitive processes can contribute to an understanding of a wide range of economic and social phenomena.