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Housing Pundits and the If-Then Fallacy

Published on 24/08/07
by zot

This post has been rolling around in my head for a week while I tried to think of a good example for the if-then fallacy, and now Dr Housing Bubble had provided a perfect one for me.

It seems that we have a particular weakness to logical fallacies presented as if-then statements. Here’s the example I’m talking about, read it fast:

Since the market is going down, buyers now have the leverage in negotiations (True). Since there is more inventory, you have more choice (True). Therefore, you should buy a house.

It’s funny because I actually agree with the whole thing. But a second later I’m saying to myself “wait a minute…”

The trick is fairly simple: get the person to agree with your if statement. The housing market IS going down. Buyers DO have leverage. Then just make the particular then statement you’d like. “Now is a good time to buy”. It’s the if-then fallacy in action.

Most people will accept the then statement without question, since the if statement is true, then the then statement must follow. The problem is that we don’t check to make sure that the if-then relationship is correct.

Just a short example of how our subconscious decision making process can trip us up. Anyone have any stories of how they’ve fallen prey to this behavior?

-zot

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