Each event has a positive or negative weight. But we forget past events in exponential way. Due to this our judgement involves only recent events. And its a well known fact that negative events have an high impact on us then positive events. Many a times we judge people on the past negative event and lose them.
This is what happens in most of the company appraisals or in judging a dear friend or in a investment in the stock market.
We are not computers to do a weighted average on all the events. Many things can be corrected when understanding the fact that our judgement may be flawed due to the past events. Systematic analysis will help us do a real judgement.
We are wired like that so we act accordingly. We also make mistakes when modeling a system that involves state change due to human decisions. We do account for the fact the humans remember little past. Our modeling is based on Statistics and this is not the way human mind judges. So the models need to adjusted for this aging factor to make it near accurate.
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