Some of you may remember when we talked about biases during Behavior Economics. Well, since BE is, by definition, both economical and psychological, I thought it’d be appropriate to bring it back. So, for this quick laid back episode of Apalla, let’s run through a few more important biases — economic or not.
Confidence bias. One of the more popular biases which we did not mention in our first discussion on biases, confidence bias is the idea that the more successful people have been in the past, the worse they will perform when entering a new environment. This is related to the heuristics model we learned back in BE, as people become certain that the mental models they used to start a business in, say, bicycles will be relevant to a business in biotechnology. And then they realize things aren’t quite so simple. Refactoring, anyone?
Surprisingly popular answers. Remember the Wisdom of the Crowds technique? Well, psychologists have noticed an interesting pattern: when you ask someone 1) What they think the right answer is to a question, and 2) How many people they think will answer the same question, the one with the highest difference chosen between the two questions is most likely to be the real answer. Alright, that’s a little vague conceptually. Let’s use an example to clear things up:
Let’s say you ask the question: “Is Dallas the capital of Texas?”. In the response, 65% of people say yes, Dallas is the capital of Texas, whereas 35% of people say no it is not. However, in our second question we ask: “Which response do you think the most people selected for the previous question?”. In this case, 75% of people say that they believe more people said Dallas is the capital of Texas, whereas 25% said they believe more people said Dallas is not the capital of texas. When we take the differences between the two answers, we see a result of 65 – 75 = -10 for yes, and 35 – 25 = 10 for no. Because of this, it is more likely that the real answer to this question is no rather than yes. Sure enough, the capital of Texas is Austin, not Dallas.
The Pygmalion Effect. The Pygmalion Effect is a phenomenon in which someone expecting certain results about themselves results in the prediction coming true. This is most seen in learned helplessness, in which a person believing that they are no good at something (say, a subject in school) results in them not being good at it (getting an “F”) absent of any self sabotage.
The Ben Carson Effect. Also known outside of my blogoverse as ‘The Golden Hammer’. I wrote about this back in June 2020, and it typically involves someone becoming very intelligent/well-renown in one category then shifting to ‘become experts’ in other categories for which they are not experts in. In a way, you could say this effect is related to confidence bias. Some famous examples include Ben Carson, the legendary neurosurgeon turned anti-vaxxer, and Jordan B. Peterson, the existential therapist turned gender rights debater.
Reactance Theory. Reactance theory is when someone acts vigorously, or reactively, to an attempt to restrict or pressure their opinions. This is often seen in politics, where poor debate form abounds. Person A will pressure Person B about their belief (“You shouldn’t be pro-life because it is immoral), resulting in Person B further cementing their belief in spite (going deeper to believing in a pro-life viewpoint). The proper way to get someone to change their minds is by 1) understanding their current perspective, and 2) leading that perspective (oftentimes very slowly!) towards your own. Of course, yelling at people appears to be more fun… so this correct form of communication is rarely used in practice.
Hedonic Adaptation. Hedonic Adaptation is the scientific term for getting bored of a new iPad a few days after you bought it. Essentially, the adaption curve works in this order: 1) Desire, before the product is bought, 2) High Enjoyment, when the product is initially bought, 3) Low/base enjoyment, some time after the product is bought, and 4) Neglection, when there is a new product that you desire. Virtually all material goods follow this pattern, with some exceptions (e.g. food and art).
Anyway, I hope you enjoyed that run through of biases. Next week, we’ll wrap up psychology by talking about habits. See you next week!