Every day, we are faced with a constant stream of new information: news about the economy, back-and-forth scoring over the course of a basketball game, daily fluctuations in the stock market. But how good are we at updating our views about the world in response to this information?

This talk will discuss research documenting a powerful, predictable pattern in how people and institutions react to news: we consistently overreact to weak, ambiguous information, and underreact to strong, clear signals. We will dive into the high-stakes world of sports betting to see this bias in action, discovering how a single basket in the first quarter of an NBA game is often given too much importance, while a pivotal play in the final minute is surprisingly undervalued. Then, drawing on data from both controlled experiments and real-world financial markets, we'll see how this same pattern helps us understand investor behavior and asset-price swings. You’ll leave with a new lens for understanding belief formation, market dynamics, and your own decision-making.