Golden Hammer

AAA

DEFINITION of 'Golden Hammer'

An excessive dependence upon a specific tool to perform all sorts of functions. The golden hammer principle states that given a specific tool to use, all of the world looks like an appropriate place to use that tool. For example, a small child that is given a hammer may regard everything around him or her as a nail.

INVESTOPEDIA EXPLAINS 'Golden Hammer'

The golden hammer is also known as Maslow's Hammer or the Law of the Instrument. It was first voiced by Abraham Kaplan in 1964 and then widely disseminated in Abraham Maslow's book "The Psychology of Science" in 1966. The idea has also been attributed to Mark Twain, despite the lack of evidence to that effect. In business, it refers to an overdependence on a tried and true strategy or instrument, when another approach may be more suitable.

RELATED TERMS
  1. Behavioral Finance

    A field of finance that proposes psychology-based theories to ...
  2. Behavioral Economics

    The study of psychology as it relates to the economic decision ...
  3. Market Psychology

    The overall sentiment or feeling that the market is experiencing ...
  4. Loss Psychology

    The emotional aspects associated with investing and the negative ...
  5. Inflationary Psychology

    A state of mind that leads consumers to spend more quickly in ...
  6. Bulldog Market

    A nickname for the foreign bond market of the United Kingdom. ...
Related Articles
  1. Retirement

    Financial Planners: Specialize In Seniors

    Find out how this demographic has all the needs to keep your firm busy year-round.
  2. Professionals

    Start Your Own Financial Planning Firm

    Read on to find business tips to make your dream a reality.
  3. Bonds & Fixed Income

    Protect Assets, Create Income, Retire Happy

    Find out what you can do to ensure a comfortable transition to your post-work years.
  4. Professionals

    Be A One-Stop Shop For Your Clients

    Offering comprehensive financial services can bring in business, but coordination is the key to success.
  5. Professionals

    Boost Earnings Through Financial Planning

    Meeting more of your clients' needs will help you achieve your financial goals.
  6. Active Trading Fundamentals

    20 Rules To Trade More Professionally

    Break free from the pack and join the professional minority with an approach that raises your odds for long term prosperity.
  7. Chart Advisor

    These 4 Swing Trades Could Place You in the Money

    Take advantage of moves both higher and lower with swing trades based on trend channels.
  8. Trading Strategies

    You'll Lose Profits Without This Trading Strategy

    A trading edge defines your technical or strategic advantage in the highly competitive market environment.
  9. Investing

    Why These Are 2015's Most-Promising Stocks

    A short list of stocks with strong potential for 2015 and beyond.
  10. Chart Advisor

    Are These Triangle Patterns Breaking Out?

    The next trending move in these four stocks could start from the breakout of these triangles.

You May Also Like

Hot Definitions
  1. Fixed Cost

    A cost that does not change with an increase or decrease in the amount of goods or services produced. Fixed costs are expenses ...
  2. Subsidy

    A benefit given by the government to groups or individuals usually in the form of a cash payment or tax reduction. The subsidy ...
  3. Sunk Cost

    A cost that has already been incurred and thus cannot be recovered. A sunk cost differs from other, future costs that a business ...
  4. Technical Skills

    1. The knowledge and abilities needed to accomplish mathematical, engineering, scientific or computer-related duties, as ...
  5. Prepaid Expense

    A type of asset that arises on a balance sheet as a result of business making payments for goods and services to be received ...
  6. Gordon Growth Model

    A model for determining the intrinsic value of a stock, based on a future series of dividends that grow at a constant rate. ...
Trading Center