Self-Fulfilling prophecy

Now is a great time to visit the concept of a self-fulfilling prophecy since so many are playing out in current events. I think many people have heard about this, but rarely have a understanding of the power that it holds over their actions. The classic run on the bank is a common example. It goes like this; the bank has enough reserves to conduct business as usual, but there is a false rumor going around that the bank may be on the verge of collapse and depositors should pull out their money to protect their interests. Next, on the advice of the false information the depositors in large numbers start to withdraw their money and in the process the bank is now in real trouble. Thus, what was originally not true has become true through the expectations that the bank would fail and the actions of the depositors which ultimately led the the bank collapse. There is a vast body of research on this subject in the workplace (an employee thinks they may get fired, and by changing their behavior because of this expectation, actually does get fired) and classroom (certain students are promoted as above-average, and this expectation leads teachers to expect and elicit better performance, thus getting above-average results because of the additional attention). Parents may do it to their own children even, based on generalizations of behavior (she's smart and and he's good at sports) which alters the outcomes for the child based on the same principal. Now it is happening in the market, stocks have a few bad weeks and more and more investors pull out their money which perpetuates further declines.

Recap from http://www.businessdictionary.com/definition/self-fulfilling-prophecy.html:

Positive or negative expectations about circumstances, events, or people that may affect a person's behavior toward them in a manner that he or she (unknowingly) creates situations in which those expectations are fulfilled. An employer
who, for example, expects the employees to be disloyal and shirkers, will likely treat them in a way that will elicit the very response he or she expects. Positive or negative expectations about circumstances, events, or people that may affect a person's behavior toward them in a manner that he or she (unknowingly) creates situations in which those expectations are fulfilled. An employer who, for example,
expects the employees to be disloyal and shirkers, will likely treat them in a way that will elicit the very response he or she expects.