DEFINITION of 'Socionomics'

The study of the relationship between social mood and social behavior pioneered by Robert R. Prechter, Jr. Socionomic theory proposes that social mood influences the aggregate character of social actions, such as those found in the economy, financial markets and politics.

BREAKING DOWN 'Socionomics'

Socionomics can be applied to many areas of social activity. The socionomic perspective frequently differs from that offered by conventional observers of society. Prechter has noted the following, for example:

Conventional observers often imply that rising markets make investors optimistic. Socionomic theory proposes that optimistic investors make markets rise.

Conventional observers often imply that recessions result in more cautious business practices. Socionomic theory proposes that more cautious business practices result in recessions.

Conventional observers often imply that scandals outrage the public. Socionomic theory proposes that an outraged public seeks scandals.

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