Human Error and Uncertainty
The human experience is anything but predictable. If you are an economist you face this problem sooner than later. One of the great purposes of the sciences is to offer predictability. It is how we made the calendar, how we got to the moon, and how we opened up the world of the internet through understanding and predicting radio wave frequencies. Science and mathematics have also tried to predict human behavior usually in the form of economics, but much of human behavior remains unpredictable. One of the main reasons is that humans don’t always do what’s in their best interest. People make mistakes and act on emotions rather than logic. More than emotions there seems to be even errors in our cognitive machine. It is these mistakes that make us human. In some ways, the human experience is a product of stupidity. Yet this stupidity and the accidents that often permeate human life have also created some of the greatest inventions and advances in human history. Penicillin was made by a mold contaminating a petri dish and killing the bacteria they were studying. The Microwave oven was invented after the microwaves from a radar set Percy Spencer was working on melted the chocolate in his pocket. The difference between success and failure isn’t always so obvious. The world is more uncertain than we would like to believe.
It reminds me of a famous Chinese parable:
Once upon a time, there was a Chinese farmer whose horse ran away. That evening, all of his neighbors came around to commiserate. They said, “We are so sorry to hear your horse has run away. This is most unfortunate.” The farmer said, “Maybe.” The next day the horse came back bringing seven wild horses with it, and in the evening everybody came back and said, “Oh, isn’t that lucky. What a great turn of events. You now have eight horses!” The farmer again said, “Maybe.”
The following day his son tried to break one of the horses, and while riding it, he was thrown and broke his leg. The neighbors then said, “Oh dear, that’s too bad,” and the farmer responded, “Maybe.” The next day the conscription officers came around to conscript people into the army, and they rejected his son because he had a broken leg. Again all the neighbors came around and said, “Isn’t that great!” Again, he said, “Maybe.”
The whole process of nature is an integrated process of immense complexity, and it’s really impossible to tell whether anything that happens in it is good or bad — because you never know what will be the consequence of the misfortune; or, you never know what will be the consequences of good fortune.Allen Watts Retelling the parable
As great as this quote is I am not about to just sit here and say maybe all the time. Even if it is almost impossible I feel that it is still worth the attempt. Advertisement agencies would agree, and likewise your bank account. The beauty about studying mistakes is that not only can we prevent them in ourselves, we can predict whether other people will make them or not.
How we can predict mistakes and not just say maybe
What makes people so difficult to predict is the relativism by which they pursue their dreams and goals. We destroy our environment one day and try to save it the next. We are racists one day and equals the next. We feel joy but then soon feel sad. The morals we hold are ever-changing throughout history from integrity to sex. Our origin and in consequence the meaning of life remains one of the great mysteries. I argue though that we humans are improving, coming closer to truth, and changing for the better. That said, we still make mistakes. Lots of them!
Some of the mistakes we make can be accounted for by considering the very ways that our brain works. Many of the ideas I am about to mention come from the Nobel prize-winning author, Daniel Kahneman, who summarized much of his life’s work in his bestselling book Thinking Fast and Slow. He is both a psychologist and economist who aims to figure out why humans act the way they do. In some ways, his ideas are better than recognizing mistakes because he explains why we make the mistakes. Understanding ourselves is the key to making strengths out of weaknesses. Without further ado, here are two of the mistakes that we often make and how we can fix them:
Availability heuristic mistake
Heuristic refers to our personal method for solving a problem in an effective or timely manner that often involves shortcuts to providing correct answers and is thus prone to error. One heuristic that is often used is the availability of thought, aka “whatever comes to mind”.
Daniel Kahneman wrote, “People tend to assess the relative importance of issues by the ease with which they are retrieved from memory—and this is largely determined by the extent of coverage in the media.”
Steven Pinker, a Canadian psychologist, in his book The Better Angels of Our Nature: Why violence has declined writes about a textbook case in the psychology of fear created by the media. It follows along perfectly with what Kahneman wrote. Our culture is hyper-aware of kidnapping and we have instituted huge cultural changes in wake of the news about kidnapping constantly berating us. The interesting thing is that the chances of a child being fatally kidnapped are 1 in a million. In addition, The writer Warwick Cairns found that if you wanted to get your kid kidnapped you would have to leave your child outside and unattended for 750,000 years. We fear children getting kidnapped because it is readily available to us through the news and so we deem it of high importance. In fact, the opposite is true. Steven Pinker points out that twice as many kids are hit by cars driven by parents taking their kids to school than by other traffic. To prevent children from getting killed by kidnappers, parents are driving their kids to school more. The net result is more children getting killed.
I am still not quite sure why the availability heuristic exists. I think for the most part it is not really advantageous. Evolutionarily it may have developed because it’s easier to just rely on what comes to mind than to produce frequency data on what happens the most often. Evolution can be lazy in that it simply takes the minimum necessary for survival. It isn’t concerned about the perfection or best outcome for our species. It may have been more likely for our species to survive making quick decisions and save energy while not thinking about things too much. This is unfortunate but we have ways to counteract our inborn laziness.
Humans have the ability to think about their thinking and get an education. Learning can be hard but it has led to greater survival of our species so that we have grown significantly more than any other animal on Earth. In The Anthropocene Reviewed, John Green contrasted our growth with that of other species through biomass. All of the other animals on Earth combined for less than a third of what we weigh. Our species has gotten fat.
How do we overcome the availability heuristic?
The best solution is to develop a quantitative mindset. Steven Pinker suggests doing this in his book Enlightenment Now. It becomes increasingly important to look at statistical data and make decisions based on the frequency rates at which problems occur. If we as a human race did this we would realize that many of the problems of our day are not the ones that we are trying to solve. Kidnapping is not as big of a problem as say cancer, car accidents, or heart disease. I commend our actions in preventing the spread of Covid-19 and I hope that our community will continue to take action in preventing death in other ways at the level we did with Covid-19. Looking at frequency data in deciding which problems to put as a top priority could help in doing this in the most morally enlightened way.
Outcome bias mistake
Another big mistake that we can make is to exaggerate our ability to have known something all along. In the book Moneyball you can see tons of examples of this within the superstitious world of baseball. Scouts would look (still look) for high school players with lots of potential instead of relying on the telling statistics of college players. The problem with their thinking is that almost all promising high school baseball players show potential because they are so young. The result was lots of money and draft picks spent on mediocre players. For the few scouts that would be correct on a high school baseball player turning into a star, they would say that they knew it all along, but really they got lucky. When the scouts were wrong the decision would fade as problems like not listening to coaches, being prone to anger, or the player being in a bad spell of play offering misdirection from the real problem. Maybe the high school kid was never as good as the scout predicted. The damage of the outcome bias was done though. Scouts were praised when they got lucky and nobody cared if you got things wrong.
On the other end, there were the college students who had great statistics but didn’t have stardom potential like the high school kids. Some college players also didn’t get picked because they didn’t look the part. These players would be fat, lanky, or have some other characteristic that didn’t help them to fit the model of stardom. They weren’t picked up by teams because of these reasons but The Oakland A’s didn’t care. They would take these players purely based on the numbers. Could you play or not? The Oakland A’s would then go on to win consistently more than the other teams like the Yankees with a third the size of the available budget. The Oakland A’s couldn’t pay these players too much but they still did better than the high school kids the other scouts were picking for.
The even crazier thing is that as these college players for the Oakland A’s started to play well in the big leagues the other teams would have their reasons for why they knew they would be great all along. Outcome bias causes one to look back at all the reasons for why the outcome occurred, but people ignore or often are unable to recall why they thought differently before. We base all our thinking on the outcomes and provide a story to fit. We do this because it gives us a stronger sense that we know how the world works and have a good understanding of the past. In reality, we have no clue what is going on.
Baseball isn’t the only place that this happens. Outcome bias occurs when we think of the stories of geniuses too. I hate this the most about outcome bias. Stories of genius are great because they allow us to have a hero we wish to emulate. They can often show that hard work leads to success. They can motivate us to be better and to achieve more than we would if not motivated by the desire to be a genius ourselves. But!! The problem is that we sometimes overemphasize talent when luck is the deciding factor between failure and genius. Kahneman uses the example of Google where the two developers developed a company from a series of decisions that turned out well. They then decided to sell their company for less than 1 million dollars but got lucky because the buyer thought it was too expensive and thus didn’t buy it. Their decisions continued to work out well for them, time and time again, as they ran the company themselves.
Kahneman writes, “The ultimate test of an explanation is whether it would have made the event predictable in advance. No story of Google’s unlikely success will meet that test, because no story can include the myriad of events that would have caused a different outcome. The human mind does not deal well with nonevents. The fact that many of the important events that did occur involve choices further tempts you to exaggerate the role of skill and underestimate the part that luck played in the outcome. Because every critical decision turned out well, the record suggests almost flawless prescience—but bad luck could have disrupted any one of the successful steps. The halo effect adds the final touches, lending an aura of invincibility to the heroes of the story.”
This can be said about almost all the greats that we idolize like Warren Buffet, Bill Gates, and Steve Jobs. Can their path be replicated? This isn’t to downplay the skill and hard work that was obviously involved in their ascendancy but it is important to remember how much luck played a role in their triumphs. I don’t mean to be pessimistic about people’s ability to be geniuses. I simply mean to point out that we are all not too far off from being a genius. Often the deciding factor can simply be luck. We can be great no matter if we also receive fame and recognition. Instead, we should look to define for ourselves what success is instead of depending on society to tell us. I don’t think success in life is necessarily dependent upon the outcome. We should stop looking at great singular moments for a measurement of how good we really are, and instead look for consistent patterns that produce desired outcomes most of the time. Then maybe we can get lucky too, but more importantly, we should look to be happy with what we are doing regardless of the fame and glory that we hope to receive.
Kahneman also writes about how Doctors and physicians can be prone to follow procedures and solutions that will prevent them from getting malpractice litigation when things go wrong. At times this risk-aversion can be to the detriment of the patient. We should not look at singular outcomes but the outcomes that most often will occur. On the flip side outcome biases also reward people that gamble and get extremely lucky. We can be found to praise stupid decisions simply because the outcome turned out good. It is also why self-help books can seem amazingly beneficial as we read them but do not turn out to be helpful at all in practice. Many self-help books provide reasons that explain the success that revolve heavily around outcome bias. These books help us to feel good and reduce our anxiety about living in a world where we have so little control over the results of our actions. They don’t however make us any more successful. Some principles in self-help books are good, but a lot of them aren’t helpful at all.
How do we overcome outcome bias?
I think that the ideas in Moneyball offer a sound practice of how to find success in a world revolving around luck. A lot of what the Oakland A’s did is surprisingly the same solution to avoiding the availability heuristic: Looking at frequency data and making decisions based on sound statistical, and quantitative analysis. Frequency data works in situations where you can produce and record a lot of data but it doesn’t always offer a solution for our individual lives.
One solution for combatting these problems in our individual lives is to gather personal data albeit on a much smaller scale. It would be prudent to have a data journal in which certain practices are recorded day after day with the outcomes that resulted. When I am blogging it is cool because WordPress does this for me automatically. I can see how my viewership has developed over time. It would be neat to see this data over other aspects of my life as well like dating, and religious beliefs. My solution for individual problems thus far has been to look at data of similar situations to my own and compare and contrast. Obviously, it isn’t perfect but I think it gives me a more accurate worldview. I have also become more critical of the content I read to make sure that it isn’t based on outcome biases. Simply recognizing outcome bias can be a powerful skill.
These are just two mistakes that we as humans make. Just learning how to prevent one of these mistakes could be incredibly beneficial to our lives. Now imagine if we could prevent even more. I hope to write about more of the common mistakes we humans make later on so stay tuned for future posts.