Volatility, Division, Dopamine, and Social Media ...another Tail Risk?

Social media can be influenced by the use of dopamine. Dopamine can make people believe certain things about a situation that could or not be true. This is particularly true in the markets given groupthink bias, the herd mentality in the markets, and the reinforced denial that results from this process.
Based on webmd.com, “dopamine is a type of neurotransmitter. The body makes it, and the nervous system uses it to send messages between nerve cells. Dopamine plays a role in how we feel pleasure. It's a big part of our uniquely human ability to think and plan. It helps us strive, focus, and find things interesting. The body spreads it along four major pathways in the brain. Like most other systems in the body, people do not notice it (or maybe even know about it) until there is a problem. Too much or too little of it can lead to a vast range of health issues.”
The topic may seem irrelevant, but the subtle tools used in social media are not. Manipulation can fly in many directions and from many fronts and sources. The entire process (combined) involves goals to desensitize and detach people from the real world. In other words, detaching people from what is really going on could deviate them and contribute to having biases. Although the impact of social media on markets is big, the impact on societal change is huge.
The control of social media has proven to be broken. Barriers or controls (in this case, they could also be called "stop losses") are difficult to set to avoid any catastrophic spillover effect. The codependency of society in social media that exists today should be treated effectively by applying psychology, of which some school of thoughts could be effective such as the attachment theory (Edward John Mostyn Bowlby, CBE, FRCP, FRC Psych 1907-1990) for instance.
All these combined, can lead to a polarized society that also may lead to more division, which ends in more uncertainty and volatility. A more divided society fosters more volatile markets. Short-term actions should be effectively taken by considering the visualization of long-term goals, which need to be clearly defined in advance by starting with a "purpose" or a “why”. If this is solidified well in advance, then markets will follow. Otherwise, volatility will continue.
The bottom line is that social media and dopamine are big sources of volatility and market dislocation will continue happening more often than in the past. They could move markets in any direction. All these represent another source of tail risk, which is the result of many years of a hidden buildup process.

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