There are a lot of reasons why it can make sense to go with the majority. Going with the popular view is a shortcut for taking the time and effort to make our own decisions from scratch. We might reason that if others believe it, then it's probably true. But we can also keenly feel the desire to conform to the majority view because it's uncomfortable to hold a different opinion — the easy choice is so often to go with the flow even if, deep down, you disagree. So we get the bandwagon effect.

The bandwagon effect can lead to the Abilene paradox — where a group can make a decision that no one in the group agrees with. On a night out it may lead to just following the crowd, but in a company it could lead to launching a product that no one thinks is good or, more seriously, in safety critical industries like airlines, if people don't feel comfortable speaking up against the group or authority it could lead to accidents.

The bandwagon effect

So the story goes, as told by Stephen Sigler, Nature May 1989:

"The US military studied fighter planes returning from missions to try to improve their survival rate and were considering adding heavy armour to those parts of the plane that tended to show the greatest concentration of hits from enemy fire, until statisticians pointed out the fallacy of that argument. The more vulnerable parts of the plane were those with the fewest hits; planes hit there tended not to return at all. The single most vulnerable part, the pilot’s head, was without serious scar in the sample of planes that returned."

It’s easy to draw correlations from what we see in front of us. But what we see usually represents just a small part of what has happened. Focusing on the evidence we can easily see at the expense of that we can’t leads to survivorship bias. To say it another way, when Bill Gates drops out of college and starts Microsoft it might seem like dropping out is a path to success for others too, but that ignores all the dropouts who didn’t create Microsofts and consequently you didn’t hear about.

Silent evidence — the evidence that we don’t or can’t easily choose to consider — is a term from Nicholas Nassim Talleb.

When trying to discover the veracity of the planes story I enjoyed Bill Casselman’s American Mathematical Society article on The Legend of Abraham Wald. The postscript points to some of the source behind the story including a mention of Stephen Sigler’s letter in Nature quoted above.

I covered survivorship bias before but like this story so much I thought it was worth doing again.

Survivorship bias

It turns out that in general, the intensity of emotion, or the affect, of our bad memories seems to fade faster than for our good memories. This means that, say, our happy memories keep us happier for longer and our bad memories don’t affect us as much in the future. It’s called the fading affect bias as the fading is biased more strongly for negative memories.

This is handy as it naturally gives us a more positive disposition. So, for instance, after some time has past, we may find we remember the good parts of a holiday — like an amazing beach — more clearly than the bad — like the mosquitoes at the beach. And thinking about the good parts keeps making us happy longer than thinking about the bad parts might make us sad. Brilliant!

PS: This is a different use of affect than the common affect/effect confusion.

Fading affect bias

The Implicit Association Test (IAT) is an amazingly simple way to uncover if and how strong your implicit biases may be. For example, you could test if you have a bias on gender roles (as in the sketch), race, religion or in fact any attitudes you may have. You could forget about reading this and simply go take the Implicit Association Test online now and you’ll get the idea and perhaps surprise yourself.

In the example I gave in the sketch, you could see how strong your biases are for traditional gender roles by measuring the difference in time it takes to sort first career words towards men and home and family words towards women, and then sorting the other way around.

It’s fascinating, and a little uncomfortable, to see your implicit attitudes so clearly come to light. Don’t forget to try taking a test.

The Implicit Association Test

We love it more if we made it. Or, more scientifically perhaps, the IKEA effect is ‘the increase in valuation of self-made products,’ when we have put more effort into it. 

Turns out, if we’ve put effort in ourselves we’re also likely to think that others will like it even more just as we do—usually not the case. But for us at least, more effort = more love.

Watch Dan Ariely do a great job explaining some experiments that lead to this conclusion, or read the full paper, The “IKEA effect”: When Labor Leads to Love (pdf), Norton, Mochon, Ariely HBS working paper, 2011.

Dan points out that kids are the ultimate expression of the IKEA effect: they’re very hard, they don’t come with instructions and they take a lot of effort.

Also see The Betty Crocker Effect, or ‘the egg theory.’

The IKEA effect

The reason, generally, is simply that all those times previously we weren’t tuned in to notice what’s top of mind now. The frequency likely hasn’t changed a bit just our noticing of it has.

Also known as the Baader-Meinhof Phenomenon.

The frequency illusion: we notice what’s top of mind

In his book You are now less dumb, David McCraney explains an concept called ego depletion with the basic idea that our brains require fuel, particularly the decision-making and glucose hungry pre-frontal cortex. Every time you have to make decisions or deal with difficult situations it tires you such that we have a sort of finite amount of will power. If you spent the morning battling to get the kids dressed and out the door, then jostling your way through a crowded commute, by the time you get to work you’re more likely to say ‘whatever’ to any decisions that come your way. Making decisions is hard work.

McCraney brings up a remarkable, and slightly disturbing, study by Shai Danziger which followed eight Israeli judges as they decided on over 1,000 parole applications. The findings show that prisoners were most likely to be granted parole first thing in the morning, after a snack break, and right after lunch. If you were unlucky enough to be up for parole just before lunch, bad luck.

If you want the most control over your own mind so that you can alter your responses to the world instead of giving in and doing what comes naturally, stay fresh. Take breaks. Get some sleep. And until we understand what ego depletion really is, don’t make important decisions on an empty stomach.

Here’s a nice summary of Shai Danziger’s parole study in the Economist including a remarkable chart.

Don’t make important decisions on an empty stomach

Dan Kahneman and Amos Tversky’s behavioural economics theory modeling how we make decisions. It illustrates, among other things, some of the non-rational decisions we make as we are guided by emotion and heuristics in decisions. The sketch points out a few of the key points:

Loss aversion - the different shape of the curves as we make gains or losses (either side of the centre) represents how a loss of £100 annoys us much more than a gain of £100 gives us pleasure.

Diminishing sensitivity - the levelling off of the curves represents that we’ll enjoy winning £100, if we only have £100, much more than we’d enjoy winning £100 if we had £900.

Adaptation level - We don’t evaluate from some absolute level - we evaluate whether something is good or bad from a neutral reference point that we adapt to. So, by the end of a movie the movie theatre doesn’t feel dark, yet walking out feels blinding. Your reaction to the £100 example above was probably affected by whether you think £100 is a lot of money or a little, which is all to do with your adaptation level.

Prospect theory

Unfortunately, there are studies to show that this is generally true. What with decoy prices, anchoring, the age-old susceptibility to 99s and a host of other biases, we’re at the mercy of many factors when it comes to trying to make vaguely rational pricing decisions.

For plenty more see William Poundstone’s, Priceless: The Myth of Fair Value (and how to Take Advantage of It), Scribe, 2010.

Prices written smaller seem more affordable

The technique of adding a significantly more expensive option in order to instantly make the other options look reasonable by comparison. These kinds of manipulations have been shown to be scarily effective.

Pricing decoys are another way retailers get you to part with more money than you planned on. In his book Predictably Irrational, behavioural economist and professor Dan Ariely demonstrates how a large magazine successfully employed a strategy called the “decoy effect” to increase revenue from subscription sales. Prospective subscribers were given three choices:

1.       Web-only subscription for $59
2.       Print-only subscription for $125
3.       Web + print subscription for $125

At first glance, the middle price point appears to be superfluous. Why would anyone buy a print-only subscription for $125 if they could get a web and print for the same price? Ariely tested the price points with MIT students and found that 16% of students chose option 1 and 84% chose option 3; not surprisingly, none chose option 2.

Then Ariely did something really interesting; on the assumption that having a decoy price (option 2) was influencing people’s choices, he removed the decoy and retested the price points. This time, the subscription choices were as follows:

1.       Web-only subscription for $59
2.       Web + print subscription for $125

With the decoy removed, the option that had previously been the most popular – the more expensive print + online access subscription – suddenly became the least popular choice. Only 32% of those surveyed chose the more expensive option, with 68% selecting the online-only subscription. Clearly the middle price point wasn’t superfluous; it was smart marketing that made option 3 look more attractive to subscribers.

Avraham Byers, Here’s why you should always pay full retail price, Financial Post, April 22nd 2014

The decoy price

Where “all the children are above average.” From the intro by Garrison Keillor to the News from Lake Wobegon on the radio show A Prairie Home Companion. Also known as illusory superiority. From the popular studies where, for example, 80% of people think they are above average drivers, when asked to estimate the % of chores done in the household it adds up to more than 100%, and we overestimate our input to project work and it’s impact on its success. For the best treatment I’ve read, and references, see Thinking Fast and Slow by Dan Kahneman.

The Lake Wobegon Effect

We usually only see the winners. The losers tend to disappear from the record. Which is why all the fund managers in the papers seem to be giving great returns, or starting the next Whatsapp or Instagram seems like such a sure fire way to get rich. We don’t see all the funds, apps and entrepreneurs who never made it.

Hindsight bias, Loss aversion and Recency bias. Parents in particular frustratingly seem to suffer from hindsight bias where everything becomes blindingly obvious as soon as a child has dropped the glass/fallen over/bumped into someone. Though ‘careful’ is not so useful after the fact.

Sneaky cognitive biases: hindsight bias, loss aversion, recency bias

Anchoring

Stories feel better than randomness — even when randomness may be the truth. Another reason that reading the papers is not always worth your time. This TEDx talk has a nice summary of a host of our common cognitive biases.

Narrative bias

Framing

We’re not very consistent at estimating the future value of something and have a bias, perhaps motivated by survival, towards overvaluing nearer outcomes at the expense of later ones.

Hyperbolic discounting

We have a tendency to think that we’ll be able to act differently in the future. So while this lucky chap plans to start his diet tomorrow having been presented with this giant cake, he underestimates his likelihood of not sticking to it on future days.

Sketchplanations tagged with bias