Be Wary When Things Get Off to a Great Start: Beginner’s Luck
In the last chapter, we learned about the association bias—the tendency to see connections where none exist. For example, regardless of how many big presentations he has nailed while wearing them, Kevin’s green polka-pot underpants are no guarantee of success.
We now come to a particularly tricky branch of the association bias: creating a (false) link with the past. Casino players know this well; they call it beginner’s luck. People who are new to a game and lose in the first few rounds are usually clever enough to fold. But whoever strikes lucky tends to keep going. Convinced of their above-average skills, these amateurs increase the stakes—but they soon will get a sobering wake-up call when the probabilities “normalize.”
Why Experience Can Damage Your Judgment: Association Bias
Kevin has presented his division’s results to the company’s board on three occasions. Each time, things have gone perfectly. And, each time, he has worn his green polka-dot boxer shorts. It’s official, he thinks: These are my lucky underpants.
The girl in the jewelry store was so stunning that Kevin couldn’t help buying the $10,000 engagement ring she showed him. Ten thousand bucks was way over his budget (especially for a second marriage), but for some reason he associated the ring with her and imagined his future wife would be just as dazzling.
Do Not Marvel at Your Existence: Self-Selection Bias
Traveling from Philadelphia up to New York, I (Rolf Dobelli) got stuck in a traffic jam. “Why is it always me?” I groaned. Glancing to the opposite side of the road, I saw carefree southbound drivers racing past with enviable speed. As I spent the next hour crawling forward at a snail’s pace, and started to grow restless from braking and accelerating, I asked myself whether I really was especially unlucky. Do I always pick the worst lines at the bank, post office, and grocery store? Or do I just think I do?
Suppose that, on this highway, a traffic jam develops 10 percent of the time. The probability that I will get stuck in a jam on a particular day is not greater than the probability that one will occur. However, the likelihood that I will get stuck at a certain point in my journey is greater than 10 percent. The reason: Because I can only crawl forward when in a traffic jam, I spend a disproportionate amount of time in this state. In addition, if the traffic is zooming along, the prospect never crosses my mind. But the moment it arises and I am stuck, I notice it.
Suppose one day the phone rings: An excited voice tells you that you have just scooped the lottery jackpot—$10 million! How would you feel? And how long would you feel like that? Another scenario: The phone rings, and you learn that your best friend has passed away. Again, how would you feel, and for how long?
In chapter 40 (“False Prophets: Forecast Illusion“), we examined the miserable accuracy of predictions, for example in the fields of politics, economics, and social events. We concluded that self-appointed experts are of no more use than a random forecast generator. So, moving on to a new area: How well can we predict our feelings? Are we experts on ourselves? Would winning the lottery makes us the happiest people alive for years to come? Harvard psychologies Dan Gilbert says no. He has studied lottery winners and discovered that the happiness effect fizzles out after a few months. So, a little while after you receive the big check, you will be as content or as discontent as you were before. He calls this “affective forecasting”: our inability to correctly predict our own emotions.
Do you ever read annual reports, paying particular attention to the CEO’s comments? No? That’s a pity, because there you’ll find countless examples of this next error, which we all fall for at one time or another. For example, if the company has enjoyed an excellent year, the CEO catalogs his indispensable contributions: his brilliant decisions, tireless efforts, and cultivation of a dynamic corporate culture. However, if the company has had a miserable year, we read about all sorts of other dynamics: the unfortunate exchange rate, governmental interference, the malicious trade practices of the Chinese, various hidden tariffs, subdued consumer confidence, and so on. In short: We attribute success to ourselves and failures to external factors. This is the self-serving bias.
Why You Are Either the Solution—or the Problem: Omission Bias
You are on a glacier with two climbers. The first slips and falls into a crevasse. He might survive if you call for help, but you don’t, and he perishes. The second climber you actively push into the ravine, and he dies shortly afterward. Which weighs more heavily on your conscience?
Considering the options rationally, it’s obvious that both are equally reprehensible, resulting as they do in death for your companions. And yet something makes us rate the first option, the passive option, as less horrible. This feeling is called the omission bias. It crops up where both action and inaction lead to cruel consequences. In such cases, we tend to prefer inaction; its results seem more anodyne.
In a penalty situation in soccer, the ball takes less than 0.3 seconds from the player who kicks the ball to the goal. There is not enough time for the goalkeeper to watch the ball’s trajectory. He must make a decision before the ball is kicked. Soccer players who take penalty kicks shoot one third of the time at the middle of the goal, one third of the time at the left, and one third of the time at the right. Surely goalkeepers have spotted this, but what do they do? They dive either to the left or to the right. Rarely do they stay standing in the middle—even though roughly a third of all balls land there. Why on earth would they jeopardize saving these penalties? The simple answer: appearance. It looks more impressive and feels less embarrassing to dive to the wrong side than to freeze on the spot and watch the ball sail past. This is the action bias: Look active, even if it achieves nothing.
It’s Not What You Say, but How You Say It: Framing
Consider these two statements:
“Hey, the trash can is full!”
“It would be really great if you could empty the trash, honey.”
C’est le ton qui fait la musique: it’s not what you say but how you say it. If a message is communicated in different ways, it will also be received in different ways. In psychologists’ jargon, this technique is called framing.
We react differently to identical situations, depending on how they are presented. Kahneman and Tversky conducted a survey in the 1980s in which they put forward two options for an epidemic-control strategy. The lives of six hundred people were at stake, they told participants. “Option A saves two hundred lives. Option B offers a 33 percent chance that all six hundred people will survive, and a 66 percent chance that no one will survive.” Although options A and B were comparable (with two hundred survivors expected), the majority of respondents chose A—remembering the adage: A bird in the hand is worth two in the bush. It became really interesting when the same options were reframed. “Option A kills four hundred people. Option B offers a 33 percent chance that no one will die, and with a 66 percent chance that all six hundred will die.” This time, only a fraction of respondents chose A and the majority picked B. The researchers observed a complete U-turn from almost all involved. Depending on the phrasing—survive or die—the respondents made completely different decisions.
