People like to hear narratives. They make decisions often by following a narrative instead of data and facts. Here’s an article that expands on the point and says economics should incorporate narratives and related characteristics in economic theory and research. Too often I see investors make bad choices because they were persuaded by a narrative or story. You’ve probably heard of “story stocks.” They are a classic example. Protect yourself by being aware that people are programmed to be persuaded by narratives. Then, dissect any narrative you hear and search for data and a firm foundation.
Your mind is really built for narratives, and especially narratives about other humans. That is why advertisers tend to focus not on a product itself, but rather on somebody doing some human action related to the product.
Narratives are contagious: they spread from one person to another. Some narratives disappear quickly; others can last a long time. I think of a narrative as a gem, something that you heard somewhere, and you think, I’ll remember that next time I’m in a conversation. I’ll use that. I’ll say it. I’ll try to present it right because I want it to have the effect that it had on me. That is a narrative. Narrative can, in the parlance of the internet, go viral.