The content and development of schemas and scripts of narcissistic investors are described. These patients view themselves as highly visible, with special talents and destiny, excessive obligation to others, and avoidant of satisfaction. Their investment styles focus on regret, immediate outcomes and the use of recent, salient and irrelevant information. Envy is interpreted as reflecting a market value of the self, reflecting a belief in scarcity of respect and lack of intrinsic value. Developmental analysis indicates threats of abandonment, compensation for earlier inferiority, and family myths of uniqueness. Techniques for challenging narcissistic assumptions and a developmental cognitive treatment of a patient’s schemas and scripts are described.
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A multi-dimensional model of decision making, based on modern portfolio theory, is advanced that proposes that individuals consider in making behavioral decisions and contemplating risk. This model is specifically applied to depressive decision making. According to this model, depressed individuals view themselves as having few current and future resources, low predictability and control, less maximization of positives, greater minimization of negatives, less utility for gains, more disutility for losses, higher stop-loss criteria, higher information demands, more regret, and more reliance on waiting as a strategy. Participants were 153 adult psychiatric patients who were tested on a 25-item Decision Questionnaire that assessed 25 dimensions of decision making and these responses were correlated with the Beck Depression Inventory. The results substantially supported the assumptions of a general portfolio theory of risk. Risk aversion and depression were related to most of the dimensions and depression was related to risk aversion. Less depression was related to maximizing positives as a goal, but was unrelated to minimizing negatives. Four factors accounted for most of the variance: General efficacy, discouragement, unpredictability, and risk aversion.
Individuals with different personality disorders are hypothesized to approach decision making with a variety of concerns related to their perception of their general efficacy, information demands, risk aversion, and utility of gains and losses. A variation of modern portfolio theory is employed to examine decision-making in a clinical population of adult patients. Variations along personality dimensions were related to a number of decision-making concerns and strategies. The implications of these findings are examined in the clinical treatment of personality disorders.
Normative models of decision making imply that individuals will utilize a hedonic calculus about future utility ratios (subjective utilities) in considering current alternatives. In contrast, descriptive models of actual decision making indicate that individuals utilize heuristics, ignore base rates, and consider previous decisions when considering future choices. Sunk costs are reflected in basing future decisions on previous commitments or investments, thereby ignoring subjective utility expectations. The effects of sunk costs on resistance to change are discussed and interventions to overcome these effects are examined.
Scripts are identified as role patterns which provide self-consistency and consistency in the behavior of others. Script holders construct an interpersonal reality which reaffirms their automatic thoughts and self-other schemas. Consequently, scripts are difficult to modify using traditional cognitive therapy techniques. Two scripts—the Victim and the Acquisitor Narcissist--are described and cognitive-systemic interventions suggested. The implications of scripts for transference interpretations and interventions are indicated. Finally, developmental analysis of these scripts is advanced as a therapeutic strategy.
Beck’s cognitive theory of psychopathology is integrated with Piaget’s and Bowlby’s structural cognitive-developmental theories. Automatic thought distortions, maladaptive assumptions, and early maladaptive schemas are formed at the preoperational level of intelligence and are marked by structural limitations of moral realism, imminent justice, dichotomous and intuitive thinking, and magical causality. The specific negative content of self-other schemas is based on early object representations reflecting pathology in the attachment process. Personality disorders are described as the persistence of preoperational structure and early object representations which are submitted to compensation and avoidance through maladaptive life-scripts. A case formulation based on this model is described.
A functional utility model of depressive resistance is advanced, drawing upon modern portfolio theory of how individuals decide to allocate resources. According to this microeconomic model, depressed individuals believe they have few present and future resource and low utility of gain in a market that is volatile and downward sloping. Depression is viewed as a strategy to avoid further loss, resulting in active attempts to resist change as evidenced in motivated negative cognition. Depressives take a risk-averse strategy to minimize loss, utilizing high stop-loss criteria and rejecting optimism as a high exposure position. Unlike optimistic individuals who believe that there are many replications over a long duration to obtain gain, depressives have low diversification, high information demands, and utilize hedging, waiting, hiding and other tactics to minimize risk.
Individuals contemplate a number of factors in making decisions, including their tolerance of risk, their emphasis on maximizing gains, and their perception of current and future resources. I have proposed that depressed individuals utilize a scarcity and depletion “portfolio theory,” such that they place less emphasis on maximizing gains, see themselves as having fewer resources (currently and in the future), and view outcomes as unpredictable and uncontrollable. Depressed individuals suffer losses more and enjoy gains less, stop-out early, have a low threshold for defining loss and a high threshold for defining gain, and are risk-averse. This “portfolio theory” is extended to a model of manic decision making. Individuals in a manic phase are viewed as operating with “market assumptions” of abundance and magnification, rather than scarcity and depletion. Specifically, manic individuals are described here as “risk-lovers” who view themselves as having unlimited current and future resources, believe they have close to infallible prediction and control of outcomes, place high hedonic utility on gains, and have low dis-utility for losses. In addition, their resistance to helplessness is attributed to their low stop-loss criterion, their high threshold for defining loss and low threshold for defining gain, and their discounting of regret. Theoretical, empirical and clinical implications are developed from this conceptualization.
The universal and nonrandom distribution of anxiety, fears, and depression suggests that there may have been underlying evolutionary pressures leading to adaptations for pessimistic thinking. Symptoms and processes that today we may label as psychopathology may have solved problems in an evolutionarily relevant environment, providing variations in individual behavior as a response to variations in availability of resources and vulnerability to threats and danger from predation. For example, investment strategies, the focus of this article, change with seasonal variation. Hibernation is marked by reduction of demand by limiting metabolic rates, activity, and arousal during winter months when resources are reduced, and conservation is salient, whereas manic enthusiasm focuses on short windows of opportunity, emphasizing overvaluation of pleasure, exploration, breeding, and diversification. A general theoretical model of investment strategies is proposed that accounts for sex differences in parental investments. Cognitive schemata focused on pessimistic strategies are viewed as operating through evolved algorithms that attempt to assure that behavioral and genetic investments are protected. These cognitive biases may account for male strategies of diversification and female strategies of consolidation and protection, and suggest possible determinants of a greater likelihood of females to be characterized by inhibition and depression.
Traditionally, cognitive therapy has viewed psychopathology as a consequence of dysfunctional information processing and maladaptive assumptions or imperatives. However, one may also view dysfunctional behavior and cognition as purposive and as setting desired limits on individual change. Change always implies some risk and uncertainty and individuals may manage this risk and uncertainty by creating barriers to change or to self-evaluation. The resistant patient is viewed as invested in avoiding evaluation of the self under “optimal” conditions by obscuring attributional processes regarding the self. Self-handicapping strategies of resistance include noncompliance with homework, personal attacks on the therapist, distancing and volatility in emotions, waiting for readiness to change, and insistence on hopelessness. Therapeutic interventions include direct identification of self-handicapping as a strategy, examining the negative implications of achieving goals, investment in self-idealization rather than self-acceptance, and experimentation with success.