A rational person should not cling to previous beliefs for emotional reasons. They should welcome losing an argument, as that would mean they gained new information. On the other hand, there might be good reason to be embarrassed by the factors that cause you to update your beliefs.
I’m often bemused when I see a news story about someone who begins to question their faith in God after a tragedy strikes someone near and dear to them. Yes, I know this makes me a cold, heartless, bad person, but I can’t help myself. I think to myself “After everything that happened in the 20th century, it’s a loved one getting cancer that makes you think God doesn’t exist?” That’s the new information that leads you to update your priors?
[And don’t lecture me on human nature; I certainly understand that emotion plays a big role in how people view the world. Still, I can’t help noticing the craziness in the way we form beliefs.]
After 2008, the economics profession mostly abandoned its view that the BOJ was incompetent in allowing deflation, and adopted a new view—the idea that monetary policy is mostly ineffective at the zero bound. When I speak with economists, I almost never get a good explanation for this change. They mention things like low interest rate policies and/or QE coinciding with low inflation, as if we didn’t already know that from Herbert Hoover’s policies, or the BOJ policy of the early 2000s. Where is the new information that would lead you to suddenly doubt the efficacy of monetary policy at the zero bound?
Or how about January 6th finally convincing someone that Trump was a lawless authoritarian demagogue? It took that?
People often ask me if some sort of odd market anomaly has led me to re-evaluate my views on the EMH, as if history isn’t full of odd asset price movements accompanied by wild speculative activity. If someone told me that GameStop led them to question their belief in the EMH, I’d wonder if their belief was ever well founded. Had they ever studied financial history?
I’m not embarrassed to re-evaluate my views on various issues; I do so all the time. For instance, I don’t think our long run fiscal situation is as bad as I had thought in the early 2000s. I’ve revised my views on the likely path of real interest rates during the 21st century. On the other hand, I would be embarrassed to re-evaluate my views on an issue on the basis of information that any intelligent person should have known all along.