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There is an anchoring effect.

  • The Misconception: You rationally analyze all factors before making a choice or determining value.
  • The Truth: Your first perception lingers in your mind, affecting later perceptions and decisions.
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ThickCulture has found an interesting study that I really need to print out and read in detail at some point.  To quote the short abstract:

Reasoning is generally seen as a mean to improve knowledge and make better decisions. Much evidence, however, shows that reasoning often leads to epistemic distortions and poor decisions. This suggests rethinking the function of reasoning. Our hypothesis is that the function of reasoning is argumentative. It is to devise and evaluate arguments intended to persuade. Reasoning so conceived is adaptive given human exceptional dependence on communication and vulnerability to misinformation. A wide range of evidence in the psychology or reasoning and decision making can be reinterpreted and better explained in the light of this hypothesis.

If you read the longer abstract, you’ll see the following paragraph:

Our hypothesis is that the function of reasoning is argumentative… Skilled arguers are not after the truth but after arguments supporting their views.  This explains the notorious confirmation bias.

So what?

Well, the confirmation bias was the thing that started to bother me as a teenager.  I discovered that I could convince myself of almost anything if I argued about it.  The more I argued the more I believed it.  But I didn’t like the fact that something irrational was deciding my opinions for me so I started to track what I was thinking and rebel against it.

I was interested to read about the overconfidence bias courtesy of Peter Klein:

Busenitz and Barney (1997) famously argued that entrepreneurs (founders) are particularly susceptible to overconfidence and representativeness biases. Compared to professional managers, entrepreneurs systematically overestimate the probability that a new venture will succeed and tend to draw unwarranted generalizations about the future from small samples.

Is this simply stating that entrepreneurs have a greater appetite for risk?  Is it explaining why they appear to have that greater appetite for risk?  More interestingly, does this say anything about whether an entrepreneur would make a poor professional manager or simply that they would be wasted in that role?

I discovered heuristics reading psychology at university and they changed the way I thought about thinking forever.  I stopped believing that my thought processes were completely rational and started second-guessing myself a lot more.

 

What are heuristics?

Heuristics are defined by Wikipedia as:

simple, efficient rules, hard-coded by evolutionary processes or learned, which have been proposed to explain how people make decisions, come to judgments, and solve problems, typically when facing complex problems or incomplete information.

Sounds great, right?  But, as Wikipedia notes, these rules aren’t always good news because they:

work well under most circumstances, but in certain cases lead to systematic errors or cognitive biases.

 

The escalation of commitment heuristic

I was trying to explain the escalation of commitment heuristic to a work colleague the other day but I really struggled.  So I decided to write about it so I could get my head around it better.

The escalation of commitment heuristic is defined by Wikipedia as:

the phenomenon where people justify increased investment in a decision, based on the cumulative prior investment, despite new evidence suggesting that the decision was probably wrong.

 

Good money after bad

I used the initial example of a venture capitalist, who pours more money into an investee company to protect their initial investment, although it is clear that the company has become a poor investment.

I think its also relevant to people in their careers, who invest in their own skills through practice and training.  They get good at a certain type of activity and keep wanting to invest in that area.  If evidence comes to light that that activity is not particularly helpful in their chosen line of work, however, they find it difficult to believe.

I noticed an interesting article in Science Daily about the psychology of extremism.  Apparently, anxiety and uncertainty can cause us to become more idealistic and radical in our beliefs.

 

The studies

Science Daily reports:

In a series of studies, more than 600 participants were placed in anxiety-provoking or neutral situations and then asked to describe their personal goals and rate their degree of conviction for their religious ideals.  This included asking participants whether they would give their lives for their faith or support a war in its defence.  Across all studies, anxious conditions caused participants to become more eagerly engaged in their ideals and extreme in their religious convictions.

 

What’s the explanation?

According to Science Daily:

A basic motivational process called Reactive Approach Motivation (RAM) is responsible, according to lead researcher Ian McGregor, Associate Professor in York’s Department of Psychology, Faculty of Health. “Approach motivation is a tenacious state in which people become ‘locked and loaded’ on whatever goal or ideal they are promoting. They feel powerful, and thoughts and feelings related to other issues recede,” he says.

By simply promoting ideals and convictions in their own minds, people can activate approach motivation, narrow their motivational focus away from anxious problems, and feel serene as a result,” says McGregor.

 

Why am I interested in this research?

I note that I have a tendency to fix on issues and become very evangelical about them.  It gives me a lot of energy and drive and moves my motivational focus away from my life and towards external problems.

In Michael Hutchinson’s book, the Hour, he describes how Graeme Obree failed at his first Norwegian attempt at the record, went back to the hotel, slept, got up and did it again the following day.  The second time he broke the record.

Hutchinson describes his state of mind thus:

He spoke to no one in case they punctured the fragile self-belief he’d managed to build after the previous day’s failed attempt.  When the starter began to ask Graeme if he was ready, he was interrupted by Graeme spitting back, “Are you ready?”  It came over as arrogance.  It was terror that he was going to fail and go home the same person as when he left.  He was more afraid of failure than of death.

I find this insight very interesting but I’m not sure what to infer from it. 

A new start

Hello, gentle reader.  This blog is going to be my personal musings and general thoughts on life.

There will be no regular posting schedule and no standard length to the posts.  I cannot promise anything of interest.

If you enjoy it or benefit from it I will be pleased.  However, it’s main purpose is for me to monitor what I’m thinking and steer myself in good directions.

And, yes, the cat in the picture above is mine and he is called Jake.