Soros: General Theory of Reflexivity

While Soros focuses on the principle of reflexivity in financial markets, it operates in many other domains of life. People worry about what other people will think before they say something—which affects what they say. In other words, our perception of reality changes reality by altering the way we might otherwise act. This leads to a self-fulfill

Reflexive processes that become historically significant tend to follow an initially self-reinforcing, but eventually self-defeating, pattern.

Our understanding of the world in which we live in is inherently imperfect. There is always a discrepancy between the participants' views and expectations and the actual state of affairs. Sometimes the discrepancy is so small that it can be disregarded but, at other ties,