Technical analysis (TA) is a tool believed to support investor’s investment decisions. Even if research has demonstrated that TA cannot be used to make systematic profits over a long time period, it could potentially bring psychological payoffs to its users in the form of enhancing their confidence. In an experimental study we show that: (1) chartists demonstrate
overconfidence in TA usage, believing that they are better than they actually are in TA formation recognition, and that; (2) the act of naming an observed trend as a TA formation brings extra confidence to the chartist, regardless of whether this is a real TA sequence or a random sequence. Thus, both naming an existing TA formation as a TA formation and naming a random sequence as a TA formation result in greater confidence. Also, irrespective of the high popularity of TA among investors, there are marked individual differences in TA followers. In a questionnaire study, we demonstrate that declared positive attitudes toward TA correlate positively with high need for (cognitive) closure (as measured by the Need for Cognitive Closure Scale; NFCS), specifically, desire for predictability.

In this paper, we consider the illusion of control by using Bayesian updating as the rationality model. Our paper contributes twofold. First, we empirically verify that the illusion of control may have two concurrent sources, “emotional” and “rational”. The fi rst one produces biased Bayesian processing due to emotional engagement and the second one yields biases due to prior assumptions on the level of control. Second, we propose a method for identifying these two sources. Moreover we verifi ed two hypotheses H1: The emotional factor causes overestimation of the actual level of control. and H2: The rational factor is responsible for the reverse relationship between observed levels of the illusion of control in three separate situations, when subjects have significant control, moderate or no control. Only the hypothesis H2 received partial empirical support.

The paper presents the literature review on judicial decision making process and focuses particularly on sentencing decisions. The first paragraph has been devoted to legal directives that should inform the judge decisions about the decision weight of particular perpetrator/offence features in sentencing. Whatsoever the system of sentencing is immensely complicated even for judges: the definitions of the above mentioned directives seem to be fundamentally contentious and it remains obscure how much weight is and should be given to each of them. This situation makes different judges give different sentences for the same offence. Furthermore, the judicial practice reveals some turns-out-to-be aggravating factors that should never be taken into consideration in sentencing. Thus, in the same paragraph, the authors present methods which may help to identify the true factors and their weight in sentencing process. In the second paragraph the authors discuss the influence of judges’ cognitive dispositions (deeply rooted in psychophysics as well in heuristic reasoning) on sentencing decisions. The roles of Weber’s law and anchoring heuristic have been highlighted. Finally a discussion follows on the influence of dispositions rooted in Prospect Theory on parties’ propensity toward reaching a compromise even before the trial.