Curate’s eggs

(featured image via DALL·E)

Most of us wouldn’t consider ourselves as untrustworthy, or with poor judgement. But would others agree if they knew everything there is to know about us, or perhaps even only the very worst?

At the end of last month, a damning report was published in the UK, revealing a toxic culture of racism, misogyny and bullying in the London Fire Brigade. It describes how a noose was put on a black firefighter’s locker, and speaks of women firefighters being harassed and sexually assaulted and being told by male colleagues “we want to get you out of here, we don’t want you to be a fire officer”. A Muslim officer had bacon and sausages put in his coat pockets and a terrorist hotline sign posted on his locker. The findings are indicative of a kind of behaviour that most people would find unacceptable. But there is also a deeper significance to this behaviour, related to trust, judgement and decision making.

Judgement through a narrow gap

“But of course I am trustworthy and I have good judgement!” (image via DALL·E)

We cannot help trying to evaluate the people who walk into our life (and they cannot help evaluating us as we walk into theirs). “What kind of person is he or she?” Social beings as we are, we rely on each other to realize our goals, and we naturally want to avoid dealing with people whom we cannot trust not to take advantage of us, or who might cause us harm through poor decisions and judgement. We could ask them, but it would be rare for someone to admit they cannot be trusted, or that they are terrible at making decisions. In this respect, we are all very much subject to the Lake Wobegon effect (the phenomenon by which everyone considers themselves as better than average).  

So, we rely on observation. We look at what they do, how they weigh up things, how their choices reveal what they do, and do not, value.

Imagine one of our children has a new boyfriend – let’s call him Jake – who seems attentive, smart and friendly. Unsurprisingly, we warm to him, and we consider him a suitable match for our daughter or son. Then, one day, we happen to find ourselves in the same train carriage as our potential future son-in-law. He is deeply engaged in banter with his friends and has not spotted us. Unintentionally, we listen in, and we hear him cracking a sexist joke. Later on, Jake relates an experience from a while back, when one night he had been road racing with a friend, lost control of his car and crashed into a traffic sign that “broke clean off”.

Or imagine we can promote one member of our team at work, and we are considering a couple of candidates. Chris appears to be the most suitable of the two: on the young side (still living at home), but a good team player who is eager to learn, hard-working and intelligent, a real high-potential employee. Yet, one evening, when both of us are staying late, we see Chris taking home a brand-new box of 10 pens from the stationery cupboard. Shortly after, an old friend joins us for a barbecue at our house. As we are chatting about work, the conversation turns to the imminent promotion in our team. As we describe Chris as our preferred candidate, our friend responds, saying that this person is one of his neighbour’s children. And this Chris, it would seem, had to spend a night in the cell after being arrested for being drunk and disorderly just a few weeks earlier.

It would be quite understandable, in both hypothetical situations, for us to drastically change our opinion about Jake and Chris. We wouldn’t want our son or daughter to share a car with someone who drives like a lunatic, or to promote someone who might bring our team and our company (and us!) into disrepute. We knew only a little about them to start with, and that was all good. Then that judgement got turned upside down by new, rather contradictory information.

But was this new information, in the wider scheme of things, any more significant? We rarely know a great deal about the people we interact with. Over time, we may see certain patterns emerge, but we can usually only see one very slim slice of their lives, and extrapolate a picture from there. We judge them through a narrow gap.

Too bad in parts

That is what others do about us, too, of course. Might there be things about us that, if our friends and colleagues knew them, would alter how they see us? Would we happily share everything from our life present and past with them, even if it might change their judgement? I don’t know about you, but I would certainly want to check what I would and would not reveal.

We are all curate’s eggs ** – good in parts, and in other parts, well, not quite so good. Do people’s not-quite-so-good characteristics matter, if we are pretty good overall? Unless we have a squeaky-clean profile ourselves, perhaps condemning people on the basis of just one bit of information would be a bit hypocritical (certainly if we would not be happy for others to condemn us in the same way). Rather than take the moral high ground, we might reflect on whether any detrimental piece of information we found out is an indicator of a violation of the two expectations we have from the people we interact with. Does it mean they might abuse our trust, or that they might harm us through unwise choices? Perhaps Jake’s sexist joke is not characteristic of his attitude, and perhaps taking home the pens does not mean Chris will steal our money or defraud the company. But dangerous driving, or being arrested for being drunk and disorderly, even if they are rare, might cast more doubt about whether their decisions might not ultimately be harmful to us.

What happens behind these closed doors affects what happens outside them (photo: Amanda Slater/Flickr (CC BY SA 2.0)

And it is not just morally questionable behaviour in others that might make us consider whether they are trustworthy and have good judgement. Imagine a physician who also practises homoeopathy  or naturopathy, or a nutritionist who practises applied kinesiology ** (not the study of human movement, but the alternative diagnostic approach). If we expect sound advice based on science, perhaps we should be wary of putting our trust in someone who, while in possession of scientific credentials, also engages in pseudoscience. We may have good reason to doubt the dependability of their judgement, despite their qualifications.

Returning to the fire brigade report, that is also why we should be concerned about its findings. If we heard similar stories about supermarket shelf stackers or workers at a hand car wash, we might raise our eyebrows and feel moral indignation, but it is unlikely that their reprehensible behaviour will cause us much harm.  If a sizeable fraction of the members of the London Fire Service, however, appear to have poor judgement with respect to how they treat their colleagues, there might be justifiable doubt about the judgement calls they need to make under severe pressure in emergencies.

Nobody is perfect, and we all have good and not-so-good in us. But in some people – whether it is a propensity for reckless driving, being involved in quackery and pseudoscience, or exhibiting a repugnant attitude and behaviour at work – the bad dominates just too much.

Posted in Behavioural economics, Emotions, Psychology, Society | Tagged | Leave a comment

More than cheap talk

(featured image via DALL·E)

Actions speak louder than words, but one thing can make them speak even louder

Much of the spectacle of the soccer world championship that is taking place in Qatar as I write (and presumably also as you read, unless you are running way behind) has been happening off the pitch, rather than on it so far. One peculiarly striking situation was the controversy about the OneLove rainbow armbands that the captains of seven national teams planned to be wearing throughout the tournament. This was intended to promote inclusion, especially from within a country that leaves something to be desired in these matters. What players can and cannot wear is, however, subject to strict rules laid down by the organizing body, FIFA. Any deviations are treated as “special equipment” that needs prior approval, and violations are subject to sanctions. However, the national football associations of the countries concerned had stated that they would be willing to pay any fines as a result.

A highly significant piece of cloth (image via eBay)

This elevated wearing the armband from a symbolic gesture (that some might consider to be virtue signalling) to what is known as costly signalling. We can say we support a particular cause, but how can others tell that we really mean it? One way to add credibility is to underpin our declaration with an action that follows from our support, and that is costly to us.

Biology rules

The concept has its origins in evolutionary biology. A peacock’s tail has no other purpose than to impress a peahen, yet it makes it harder for the male bird to escape predators, which is costly.  Any peacock still alive and clearly carrying the genes for such a huge, imposing tail must therefore also be carrying genes that makes it strong enough to survive and procreate, despite this handicap. Good mate!

Since humans are very much part of biology, some of us likewise engage in such costly signalling when it comes to picking a mate (and it is also mainly the males that appear to do so). I understand that some men work out in the gym to develop physical traits such as a sixpack or powerful biceps with that intention. And as physical strength is no longer as important as it used to be for our ancestors, signalling material wealth through conspicuous consumption (by exhibiting expensive clothes or cars, for example) is perhaps even more widespread.

More relevant to humans than to most other animal species, since raising our offspring is a matter of many years, is commitment to joint parenthood. A pronounced sixpack or a German sportscar are poor proxies for this. A much more reliable option is a diamond engagement ring (as Rory Sutherland writes in Alchemy, “an expensive ring is a costly bet by a man in his belief that he believes – and intends – his marriage to last.”). Costliness doesn’t have to relate to money, though, and some men prefer a tattoo of the name of their beloved on their forearm or even their chest. At a few hundreds of pounds, euros or dollars, tattoos are not exactly cheap, but it is not this cost, which pales into insignificance compared with expensive jewellery, but the sacrifice of the pain, and the fact that it is pretty much irreversible that symbolize the commitment.

Arguably, reproduction has been, for many millions of years, the principal, dominant (and often only) form of cooperation for most species. But in some species that evolved later, notably humans, forms of cooperation that went beyond making babies developed, and became equally (if not more) relevant and important. Unsurprisingly, that is reflected in the signalling we do as well.

Most workplaces are essentially cooperative setups, and demonstrating our loyalty and dedication to our boss is not always easy, much like it is hard to prove to a (prospective) romantic partner the extent of our perpetual love and devotion. A tattoo of the company logo might not work all that well, but coming in early and staying late, or sending and replying to emails when less dedicated workers might be asleep are things we don’t have to do, which are ostensibly benefiting our employer, and which are costly to us: we clearly mean it. (I remember how, well before email and mobile phones, the timestamp of one’s messages left on my then employer’s voice messaging system was widely used to signal one’s commitment to, well, work).

“Not yet darling, just need to finish showing my commitment!” (image: Cottonbro Studio/Pexels)

Signalling everywhere

When you start looking for it, behaviour that might at first look a bit baffling may well be an instance of costly signalling being used to show commitment, to a group, or to a cause. That cost does indeed not have to be financial. The bizarre practice of initiation rituals, in which rookies have to perform certain tasks that are usually not particularly edifying, are intended to make them ‘prove’ that they have what it takes to become ‘one of us’. The tasks often humiliate the newbies, and the cost they incur is in the shape of loss of dignity (and in extreme cases can be severe, as in the shocking case of the death of a student during an initiation event in Belgium.) The daily demonstrations in Iran, where people have been taking to the streets to protest against police violence after the death of Mahsa Amini, arrested for not properly wearing the hijab, have a more virtuous purpose, and there the cost is literally measured in lives lost, with a death toll (at the time of writing) estimated at over 300.

Thankfully, the cost of signalling one’s commitment to a cause is mostly not quite so brutal, and expressed in time, effort and inconvenience. Demonstrations and protests rarely have much actual effect, yet many people take the trouble to travel to the location in question, spend time marching and shouting slogans they could have spent mending the house, reading the paper or just sitting with their feet up watching Netflix. And talking of futile efforts, a couple of weeks ago I spotted a couple of shivering individuals in the town centre, standing behind a table with some books on it – members of a local faith group seeking to enlist new joiners to their congregation. I imagined their success rate would be exceptionally low, but perhaps that was not quite the main purpose? Maybe the real reason why they were there was to confirm their allegiance, and the futility of their endeavours an integral part of it?

Let’s return to the soccer captains and their armbands. At the eleventh hour, FIFA threatened to give any player who would violate the rules by wearing the banned armband with a yellow card. This would mean that the first actual yellow card received for an infringement on the pitch would automatically be a red card – suspension from the current and the next game. The threat appeared to be enough to make the seven teams who had pledged to wear the armband and pay any financial penalties to back down.

Many fans were not impressed by the ‘lack of backbone’. And receiving a yellow card does seem somewhat insignificant compared to the rather more serious sanctions the members of the Iranian team face, after they remained silent while the national anthem was played before their game against England, in solidarity with the protest movements in their country.  

This shows how costly signalling is both a social and an economic choice, which reveals a willingness to pay. When someone decides to signal their commitment – whether it is to a relationship, their job, or a cause – we judge them by that willingness to pay, by what they are prepared to sacrifice to demonstrate that dedication.

Others will, of course, judge us similarly.

Posted in Behavioural economics, Economics, Emotions, Ethics, Psychology, Society | Tagged | Leave a comment

A consequential check

The takeover of a social media platform by the richest man on the planet turns out to be a nice little showcase of human behaviour

A couple of weeks ago, the long-awaited, off and on, acquisition of Twitter by Elon Musk, was completed. Unsurprisingly, this event led to some commotion: when someone takes control of a company, it is rarely with the intent to leave everything as is. Usually, it means that changes are afoot, and organizational changes seldom evoke a uniformly positive response. Amid the controversy the conclusion of the sale has produced, we could also see some intriguing behaviour, of Mr Musk himself, and of the Twitter users.

Elon Musk is one of the richest people on the planet (if not the richest – at least until he bought Twitter, as some argue that the company for which he paid $44 billion is now worth just $8 billion). As a businessman, he is undoubtedly well aware of the need for a company’s revenue to exceed costs, and since Twitter has been making losses every year except in 2018 and 2019, a return to profitability was unsurprisingly one of his top concerns. Another priority that he has been quite vocal about since he announced his intention to buy early in 2022 is the weeding out of fake users, known as Twitter bots, software that pretends to be a real user, for example, to inflate the number of followers a user has, or to spread misinformation.

Moving fast, breaking things and unintended consequences

The bot problem follows from the fact that anyone can open a Twitter account without any verification of identity or authenticity. This also makes it possible for malicious users to impersonate celebrities, public figures and companies. To combat this, Twitter introduced an ad hoc process in 2009 for verifying such high-profile accounts, displaying a distinctive symbol (the “blue check mark”) that allowed users to trust they were the genuine article.

One single, simple idea appeared to address Mr Musk’s priorities. Giving ordinary users the chance to prove their identity and gain that verified status would distinguish humans from bots, and charging a small fee for this privilege would both make running bot farms uneconomical and be a source of revenue for the company. As is the case with many simple ideas, however, the consequences turned out to be more complex than expected.

“Who says I have no expertise in launching products?” (photo: Steve Jurvetson/Flickr CC BY 2.0)

More conventional new CEOs might have kept things steady for a little while, while deliberately considering with their team the different options for reorienting the firm. Not so Elon Musk, who promptly fired most of the management team, and who, as a self-confessed “nano-manager”, chose to incorporate the identity verification into existing paid for accounts known as Twitter Blueidea straight away, launching it in a tweet: verification for all , for just $8 per month! This was not out of character for Musk, who is known to have acted impulsively before. Somewhat haphazardly, he continued tweeting ideas, while at the same time admitting the chaotic proceedings, “Please note that Twitter will do lots of dumb things in coming months. We will keep what works & change what doesn’t”. Tinkering with a live system in real time doesn’t quite project the most mature way of doing business.

Mr Musk, an engineer with little obvious experience in running a social media network, seems to have taken the motto of Mark Zuckerberg, the founder of Facebook (now Meta), Move fast and break things” quite literally. It all had some of the hallmarks of the Dunning-Kruger effect, the phenomenon whereby people with limited knowledge and expertise in a certain domain are unaware of these limitations, and overestimate their ability. (As David Dunning himself says, “The first rule of the Dunning-Kruger club is you don’t know you’re a member of the Dunning-Kruger club.” Since then, it appears that Mr Musk has been open to reason, and announced that the launch of Twitter Blue verification is delayed until 29 November.

Users react

Twitter’s existing verification scheme that ensured the authenticity of celebrity accounts and companies, has been largely successful in preventing most users being fooled by fake accounts, but the blue checkmark has also become a status symbol. As a Twitter verified user, you are notable.

One consequence that Mr Musk might not have fully appreciated is how the current privileged few (many of whom drive a lot of the activity on Twitter) might react to his new verification-for-all scheme. Would they be required to pay a fee for an exclusive entitlement they got for free for so many years? Even for celebrities that might be annoying and painful, the more so if the privilege would quickly lose its value as it becomes available to all and sundry.

And all and sundry certainly seemed interested in gaining that verified status. Another unintended, and apparently unforeseen consequence was the magnitude of the demand for the updated Twitter Blue offer, and the requirement to verify the identity of anyone applying. For a selected few thousands of high-profile individuals, that may not seem like a massive task, but tens or hundreds of thousands are applying every day, and you have just fired something like half your staff, that is different kettle of fish. (When, in 2016, Twitter announced that individuals would be able to request verification on the basis that this would be in the public interest, it had to discontinue the scheme, because it could not cope with the demand.)

Verified accounts really make the difference (Twitter screenshots)

The thoroughness of the verification process seemed to leave a lot to be desired, and for several days, a wide variety of impersonations were rife. Bot farms may have been deterred by the monthly fee, but that was seemingly not the case for pranksters, and so for several days, verified accounts popped up pretending to be, among others, Chiquita, the banana grower (claiming they had overthrown the Brazilian government), and Pepsi, the soft drinks company (admitting that Coke is better). Musk’s own companies were of course also targeted: fake accounts for car maker Tesla reported that “a second Tesla has hit the World Trade Center”, and SpaceX stating that it would cease all space missions and “donate $240 million in outstanding government subsidies to groups dedicated to sustainable agriculture and ending World Hunger”.

There were also tweets from a fake Lockheed Martin account, announcing that the military aircraft and weapons maker would stop sales to Saudi Arabia, Israel and even the US (!) “until further investigation into their record of human rights abuses”, and from a fake Eli Lilly account, declaring the pharmaceutical company would make insulin free. As if to show how easily correlation can be taken for causation, some twitter users were quick to jump to conclusions and incorrectly blame an apparent sudden drop in companies’ share price to such tweets. (Someone also, probably not entirely seriously, attributed a rise of 2% in Apple stock to founder Steve Jobs apparently rising from the grave and opening a Twitter account).

What can we take away from all this? People react to decisions, and it might be useful to consider those reactions before we actually make the decision. Behaviour is easy to explain in hindsight, but much harder to predict in advance. We are a widely diverse bunch of complex creatures, subject to a wide range of unaligned and often conflicting drivers. Whether it is perceived value of status symbols, disregard for authority, the response to positive and negative incentives, grabbing opportunities to disrupt for humorous or malicious motives – pretty much everything is possible. We may believe we know what will happen, but chances are we are not as expert as we think we are, and it might be wise to take our time to think through the possible consequences.

Oh, and we should not jump to conclusions.

Posted in Behavioural economics, Cognitive biases and fallacies, Psychology | Tagged , | Leave a comment

Bad impulses

Featured image: Robin Higgins/Pixabay

We cannot make good (or indeed any) decisions without emotions, but we must watch out for too much of a good thing

At the end of the consultation, the neurologist checked with the patient what day would be the most convenient for their next appointment. The patient, who despite some brain damage, but who still had perfectly normal cognitive abilities, struggled. He had no problem identifying the pros and cons of the different options, but completely failed to reach a conclusion. What was going on?

The neurologist was Antonio Damasio, who has been studying a variety of aspects related to human neurobiology, including consciousness and the role of emotions in decision making for over thirty years. The patient was a man whose brain trauma had left him incapable of experiencing emotions. His case, and the many others Damasio describes illustrate how, perhaps contrary to common wisdom, emotions are crucial in judgement and decision making. When we must make a choice between two or more options, we need to be able to do two distinct things: determine and evaluate the salient aspects of each option, and compare the sets of features of each option with each other. Part of this can be seen as some form of computation, but in the end, we must make a judgement: which is the better option?

Two parts to decisions

These two requirements, it seems from brain damaged patients, involve different parts of the brain. One part of the patient’s brain was perfectly functional, and capable of determining that, for example, an appointment on Tuesday would require a special trip, while on Wednesday the patient would already be driving into town for an errand. It could also recall the information that car parking is scarce near the hospital, and work out that it would therefore be quicker to come by bus than by car. This part of the brain can handle facts, make calculations and work out logic, but it cannot make judgements. It cannot determine whether having to come into town specifically for an appointment is better or worse than taking advantage of another trip, or whether taking the bus is better than taking the car. To do that, emotions are needed: something is better (or worse) to us when it feels better (or worse). And the part of this patient’s brain that handles this was damaged.

“Which day is the best? Let me consult my emotions!” (photo: Racool/Freerangestock)

When they read about Dr Damasio’s cases, some of my students tend to interpret this as if decisions are entirely an emotional affair, and that logic plays no part. The example of this patient suggests that this is not quite true. Emotions do not remember facts, they do not calculate or estimate values, and they do not perform logical reasoning. Imagine you are considering changing jobs. It is not your emotions that work out that a salary of £50,000 is higher than your current £45,000, or that a 60- minute commute is longer than your current 45-minute one. But for establishing that the higher salary is better than the lower one, and the longer commute is the worse of the two you’ll need emotions. For deciding whether to take the alternative job, despite spending an extra half hour per day travelling, or to stay put despite the £5,000 increase, even more. (We can try to rationalize the choice by making some arbitrary equivalence between extra income and extra travel time, but even then, ultimately, it is how we feel that will determine it.)

Yet, my emotion-loving students could be forgiven for their misinterpretation, looking at the latest political tumult in the United Kingdom. One of brand-new prime minister Sunak’s appointments, Minister of State without Portfolio Gavin Williamson, is embroiled in a controversy about bullying and intimidating his staff. He allegedly sent abusive and threatening text messages to a colleague, when he learned that he would not be receiving an invitation to Queen Elizabeth’s funeral. (Well, the messages have been published, so there is not much alleged about them, e.g. Well let’s see how many more times you fuck us all over. There is a price for everything.). He has since also been accused of telling a civil servant to “jump out of the window” and “slit your throat”. Earlier this week, he eventually resigned from his post.

Nothing but emotion

Of course, in a sense, my students are right that some decisions are entirely inspired by emotion. If you experience an annoying itch, the emotion of annoyance will make you scratch it, without ever involving conscious deliberation. If you absentmindedly start crossing the street, and you are suddenly rudely pulled out of your daydreaming by the deafening sound of the horn of an approaching double-decker, the emotion of fear will likely make you jump back onto the pavement without much cogitation. That kind of impulsive reaction to a major threat is a useful inheritance from our most distant ancestors, who did not have the benefit of a complex brain, capable of complicated reasoning.

But not all threats are life-threatening. We can only speculate what perceived threats inspired Mr Williamson’s alleged emotional outbursts – perhaps to his authority, or to his ego?

The problem with impulsive reactions is that they lack logical reasoning – they are purely emotional. They effectively bypass any reasoned evaluation of their costs and benefits, and are triggered by an immediate benefit, without considering the longer-term cost. Scratching an itch is unlikely to incur much in the way of a cost, so it’s generally fine to do so without thinking (except perhaps in very unusual situations, like if the itch occurs in a somewhat private part of your anatomy, and you are in your boss’s office asking for a pay rise). When you are about to be reduced to pulp by a bus, it is to your advantage not to spend time worrying about possible damage to your clothing should you fall over when jumping back onto the pavement. That is when we should be thankful of this inherited ability.

“Don’t you fucking dare tell me I am being impulsive!” (photo: Number 10/Flickr CC BY NC 2.0)

Otherwise, however, more circumspection is advised, for responding impulsively when it is not appropriate will rarely serve us well. Most people have learned to suppress improper impulses, and those who fail to do so are generally judged accordingly. The more power people have, the more problematic an impulsive nature will be perceived to be. It is certainly not the kind of characteristic that one might wish to see in a top executive in a company, or indeed in a cabinet minister. (Perhaps Mr Williamson was not, in fact, acting impulsively, and instead deliberately chose to be abusive, intimidating and threatening. That would only make his case even worse, of course.)

We might be a bit more tolerant of someone’s occasional impulsive reaction if they are not in a responsible position, especially if it is inconsequential. Not everyone is a paid-up stoic, and even your correspondent has, from time to time, been known to raise his voice unnecessarily, used an expletive or even slam the door on his way out for no good reason. But we had better remain vigilant. A recent survey in the UK by the Retail Trust, a charity concerned with the wellbeing of retail workers, found that eight out of ten shop workers had been verbally assaulted and nearly a third had been threatened with violence by customers. Such behaviour is no less maladaptive and dysfunctional as that of the ex-minister. However tempting an outburst might be, it is almost always better to take a deep breath and think, than to give in and lose our temper.

Even with the best reasoning capability in the world, we cannot make decisions without emotions. But even though it is possible to act based on emotions alone, we had better reserve that option for exceptional circumstances.

Posted in Behavioural economics, Emotions, Psychology | Tagged | Leave a comment

Unruly traffic

An overreliance on rules and rigid enforcement may reduce, rather than enhance, traffic safety

Most of us like things to be simple. Our brain burns around 1/5 of all the energy we consume, and if there is a way we can get by without too much thinking, we will tend to feel rather attracted to it. Unsurprising, therefore, that a sizeable portion of our behaviour is guided (if not dominated) by rules. A dress code at work (no collarless shirts except on dress-down Fridays), social customs (bring flowers and/or wine when you’re invited to a dinner party), rules of etiquette (don’t pass gas when you are there), not to mention The Law. Without such rules we can just follow, we’d have to consider continually what is, and is not appropriate. Unfortunately, rules have some inherent flaws.

Rules and (their) limits

Rules can almost never cover every possible eventuality. That is particularly relevant when the rules are related to safety – our own and that of others. Jobs that involve handling hazardous materials or operating equipment that, when misused, can cause serious damage, are almost always governed by strict rules and regulations. But they are not about rigidly and blindly sticking to the rules, nothing less, nothing more, regardless of the circumstances. Anyone doing such a job must also apply common sense and due diligence.

The same applies – or should apply – in traffic, notably regarding the use of speed limits. These tend to dominate the road safety discourse, but they also encourage binary thinking – below the speed = good, above the limit = bad. Recently, the Flemish minister president found himself in hot water, when, questioned by a talk show host, he admitted that sometimes he asks his driver to exceed the speed limit “and take the risk”.

Which risk, though? Is it the risk of having an accident, or the risk of getting caught? The difference is quite relevant. While the latter drops to zero when the actual speed does not exceed the limit, the former is a rather fuzzier affair, in which the vehicle speed is one factor among many. It is true that, all else being equal, the risk will generally (but not always) increase with a higher speed. But it is not true that speed in itself is a good proxy for the risk.

Above the safety limit, or just inappropriate speed? (photo: Jeff Gates/Flickr CC BY NC ND 2.0)

The concept of inappropriate or excessive speed, without reference to the speed limit, seems much more pertinent. If a vehicle fails to stay on the road in a bend, or cannot be brought to a safe stop to avoid a collision, the speed at which it travels is clearly excessive. But the lowest speed at which this may happen is rarely exactly the prevailing speed limit, and in practice – taking into account the conditions of the road, and the conditions of the vehicle – it might just as well be below the statutory maximum speed as above.

Yet, responding to the minister president’s utterance, the Flemish mobility minister stated that “the speed limit is the safety limit”.Many of the reactions by other politicians referred to the need to obey the traffic code, thus implicitly referring to the statutory speed limit, and perpetuating the idea that only one thing truly matters: not exceeding it.

If traffic safety is the main concern, this can be a little problematic. Belgium is a complex country, with three different regions, and naturally with three different sets of statutory speed limits. In built-up areas, this is 50 km/h (30 mph) in Flanders and Wallonia, while in Brussels it is 30 km/h (20mph). On A- and B-roads without a central outside built-up areas, the speed limit is 70 km/h (45mph) in Brussels and Flanders, but 90 km/h (55mph) in Wallonia. There is something absurd about treating maximum speeds as “safety limits” in an absolute sense, if they can vary that much across different regions of a country the size of a large handkerchief (or 50% larger than Wales). And even disregarding the variety, there are undoubtedly plenty of situations – junctions, bends, crests – on each kind of road where the statutory limit is well above what is a safe speed, even in good weather. (For clarity’s sake, the solution here would not be the introduction of even more safety limits!)

Rules vs. considered judgement

The trouble with rules is that they negate the existence of trade-offs and judgement: they eliminate nuance and make people focus on the consequences of either obeying or breaking the rules, rather than on cultivating safe behaviour. In a sense, they infantilize people, affirming that they are unable to make judgements and trade-offs, and hence cannot be responsible for making a judgement. Many people instinctively tend to resist such impositions (a phenomenon known as reactance). In combination with the illusion of superiority (well over 50% of drivers thinks that they are safer than average), this situation is unlikely to improve traffic safety. Neither drivers who drive as if any speed below the speed limit is safe, nor those who will only try not to get caught exceeding it really contribute to safe roads.

Drive with due care and attention, or else…! (photo: Leonard Bentley/Flickr CC BY SA 2.0

When I moved to the UK, I discovered that the traffic code there contains the traffic offences of driving without due care and attention and driving without due consideration for other road users. In 2019, these offences were recorded well over 4,000 times, leading to compulsory driver retraining courses, and often driving bans (they incur up to 9 penalty points, and accumulating 12 points means an automatic ban).  

Does it make a difference? Traffic safety is, of course, a complex matter, and we cannot link one specific aspect of traffic law to specific outcomes. Yet, traffic does seem to be significantly safer in the UK than in Belgium. In 2019, the last ‘normal’ year before the COVID-19 pandemic changed everything, there were 37,719 collisions in Belgium of which 607 were fatal, with a total of 646 fatalities on the road. In the UK, the number of collisions was 117,536 (1658 fatal, with in total 1752 traffic fatalities). Scaled by population, Belgium had about 3,400 collisions per million people (of which 55 involved fatalities), the UK nearly 1800 (with 25 involving fatalities. The number of road traffic deaths per million people in Belgium was just under 60, in the UK it was 27.

It is unlikely that simply introducing a similar offence in the Belgian traffic code would halve the collision and casualty rate in Belgium just like that. But with what we know about what drives human behaviour and decision making, it might be beneficial.

Rules do have their place, but if they come to dominate our behaviour to the detriment of our own judgement, the ultimate effect may well end up the opposite of what is envisaged. Rules alone does not stop people driving like a lunatic.

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Unsafe conviction

We are more often (and often more) convinced about things than we really should.

In his book On being certain, neurologist Robert Burton recounts an anecdote involving a young woman suffering from acute encephalitis, who was convinced she was dead. She refused all medical care – “there is no point treating a dead person”, she argued. Her physician tried to persuade her that she was wrong, and eventually had the idea of asking her to put her hand on her chest to feel her heartbeat. The patient agreed that there was a pulse, but instead of also agreeing with the doctor’s suggestion that she was therefore not dead, she concluded that, since she was dead, it was possible for dead people to have a heartbeat. (She eventually recovered and stopped thinking she was dead, but remained convinced that dead people can sense their heartbeat.)

Not long after I read this for the first time, my nonagenarian father, who is beginning to show signs of dementia, started to have episodes – usually immediately after waking up – in which he is convinced that he is dying. Since the first occurrence, he must have made the claim literally several hundreds of times (obviously wrongly so, every single time). Nonetheless, despite being into amateur dramatics in his younger years, he was genuinely dead (!) serious every time. I have tried many times to come up with something similar to the physician of the encephalitis patient to help him discover that he is not dying, but never succeeded. When asked, both during and after the episode what makes him believe that his time has come, he cannot produce any evidence other than that he just feels he is dying. Nevertheless, he is 100% convinced. (Once, when I was with him at such a moment, the phone rang. It was a spam caller, trying to sell him double glazing. Pointedly, he cut her short, “Please do not insist, madam. I am not interested. I am in the process of dying.”)

Not everything that we are convinced of is this extreme. But might we nevertheless be inclined to dismiss evidence that contradicts our convictions (like the encephalitis patient) or entertain evidence-free convictions (like my father)?

A pleasant life and an easy life

He did not look quite as convinced as his supporters (photo: via twitter)

The UK has been experiencing some surrealist political developments recently (convincingly deposing Belgium from its traditional comfortable lead in these matters). One of these was the hasty return of a bleary-eyed former PM from his Caribbean holiday, surrounded by much speculation that he might stand for re-election as leader of the Conservative party, after the incumbent, Liz Truss, resigned. During the weekend, some sixty Conservative members of parliament expressed their support for Boris Johnson (for it was he), even though he had not yet officially declared his candidacy. Many of them stated that they were convinced that he would… until less than 24 hours before the nominations closed, Mr Johnson issued a statement that he declined the opportunity.

Clearly, the conviction of his supporters turned out to be misplaced. Hindsight is a wonderful thing, of course, but was it reasonable for them to be convinced Johnson would stand?

There were certainly arguments why he might, but equally there were arguments why he might not, and those were apparently dismissed. Of course, Boris Johnson’s supporters wanted him to be reinstated, and for that he would of course need to declare his candidacy. Just like some people are convinced that the soccer or baseball team they support will be victorious, so they had no doubt that their favourite politician would return to what they considered to be his rightful place. Their conviction was likely inspired by wishful thinking.

But perhaps the defining characteristic of conviction is not so much the fact that it allows us to entertain the illusion that our wishes will come true. In essence, conviction is a state in which all doubt is eliminated, and that is a state with obvious attraction. Uncertainty and ambiguity can make us anxious, or require us to examine multiple possibilities. If we are convinced that our friends are trustworthy, but that we should be suspicious of strangers, we can adopt a simple heuristic as to whether we should trust someone, without emotional or cognitive burden. We can convince ourselves that certain food products are definitely healthy and others are definitely not, that E-numbers are bad, that electromagnetic radiation is harmful, or that political opponents are evil. We can be convinced that all politicians are in it for their own self-interest, that homoeopathy is an effective treatment for illness, or, just like a gambler in the casino, that our luck will soon turn. Thus we make our life a whole lot nicer and simpler. Being convinced means we don’t have to think about these things any more.

Conviction as a crystal ball (photo: nvodicka/pixabay)

Conviction helps us explain the past and the present in simple terms. We failed that exam because the teacher had it in for us; we had that car crash because we foolishly decided not to take the motorway but the scenic route, that day; we have strange symptoms because some of the old paint in the house contains lead. We are convinced of it. The economist and polymath Tyler Cowen talks of our current age as the Age of Unpredictability, but with a big dollop of conviction this inconvenience is swiftly swept aside. Predicting the future is easy when we are convinced that Putin will (or won’t) use nuclear weapons, that imminent technology breakthroughs will resolve the climate change problem, or that we are saving enough to have a comfortable retirement.

When accuracy matters

But strength of conviction is seldom a guide to its accuracy. Our convictions might take away the unease or anxiety we have about the unbearable ambiguity of the world around us, and they may reassure us that we don’t need to evaluate numerous options when we need to make decisions. When you’re convinced, uncertainty melts away. But convictions are often the result of very flimsy input, or rooted in compelling stories, rather than solid evidence. And the stronger the conviction, the more resistant it is to critical challenge, and the more it activates innate tendencies, such as hindsight, survivorship, and confirmation bias, motivated reasoning and of course wishful thinking. This makes it almost immune to any challenge.

Thankfully, accuracy is not always all that relevant. Many of the issues about which we have strong convictions are of little importance in our decisions. All our convictions do is supply us with unshakeable opinions that either find enthusiastic support among a like-minded audience. Who cares that those who don’t share our convictions will roll their eyes?

But sometimes it does matter, and then the emotional and cognitive benefit of living in a rosy illusion may be short-lived. If we recognize where accurate judgement is important, we can be more careful about any convictions we have that might influence our behaviour. Here, a conviction should not be a rock-solid, unassailable certainty, but a temporary, for-the-time-being endpoint of conscious reasoning, based on evidence – open to new evidence, and ready to be updated with new insights. Most importantly, it should not prevent us from thinking, rather the opposite.

That is the only kind of conviction that is safe to guide our behaviour.

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(Over)valuing possession

featured image: Maria J Aleman/Flickr CC BY-NC-ND 2.0

Hardly anything has an objective value, but even our subjective valuation of something may be clouded by a consideration of questionable relevance.

Last week, I shipped a box containing a large number of personal possessions, never to be seen again. Some of them I had been able to see before I dropped them off to be collected by a courier, others I hadn’t even had the chance to look at. It was a distinctly bittersweet moment.

Getting rid of old tat is something we all occasionally have to do to stop our homes from bursting at the seams. By definition, what we get rid of is the stuff we no longer value enough to keep it. Yet, as we can see at car boot sales or on eBay, one person’s trash is another one’s treasure. There are almost always people who perceive more value in the wall clock with the broken chime, a tin box with the image of the late Belgian King Baudouin or a pile of model train enthusiast magazines from the 1970s than the seller. The value of the items is in the eye of the beholder, different for buyer and for seller.

The eye of the owner

But there is another aspect that influences how we value objects. Items can acquire additional value in our eyes, simply by being owned by us. If we offer an object for sale, it may well still be in our possession, but we have decided it must go. So we must strike a balance, and any inclination to demand too high a price for an item (because we own it) is counteracted by the intent to get rid of it. That possession-bound value is typically more apparent in the objects we keep, especially those that no longer have much direct utility – in the sense that we have not used them for a long time.

A valuable box (photo via eBay

If we own it, we think it is worth more. In a now classic paper from 1990, Daniel Kahneman, Jack Knetsch and Richard Thaler described a range of experiments involving mugs, pens and other objects. They gave some of the participants one of these items, and then explored (a) how much those who did not receive the item would bid to purchase it from one of their more fortunate peers, and (b) at what price these would be prepared to sell it. Only few items changed hands, because most owners were unwilling to part with their acquisition for the price that the others are willing to pay. “The value that an individual assigns to such objects […] appears to increase substantially as soon as that individual is given the object,” the authors observed.

Remarkably, this endowment effect arises even if giving up the item for money produces an immediate financial gain. In a slightly less scientific (but nonetheless illustrative) experiment, people who had just bought a lottery ticket were offered up to eight times what they paid for it. 78% refused to sell (even when it was pointed out to them that they could immediately buy more tickets with the money, and thus increase their chances of a win).

So, back to my box with treasured possessions. The box in question was a digital cable TV recorder, and the items were more than 100 programmes recorded over the last five years. It was being swapped out as part of an upgrade of my TV and internet package, and unfortunately, there was no way for these recordings to be moved to the new set top box. What was worse, the old box would be deactivated within days, and since the content on digital recorders is protected, it would then become unavailable. In short, I had lost well over a hundred hours of recordings that were mine.

An ancient instinct in modern times

I felt robbed, with an intensity of emotion that took me by surprise. Yet it is not so surprising that we ascribe extra value to something we own: if we decide that something is worth keeping, and/or if we put effort in acquiring it, then it must be because it is valuable to us. And therefore, it follows that we need to safeguard it. The more we value something, the more painful it is to lose it.

But what had I really lost? Did I know exactly what programmes were still on that box? Frankly, no. I remember recording some of the programmes, but by no means all of them. (The same goes for many of my other possessions. A burglar could easily come and steal selected books and CDs from my collection, and I would never know they’ve gone.) Could I really claim that I value these recordings that I own so much if I didn’t even know they were in my possession – and if I had never even attempted to watch them over all these years?

And there was more evidence that the endowment effect may have been inflating the value of the lost programmes. Among them were quite a few that I had watched, but still kept – literally because I had them now anyway, and which I had never deleted even when the box got filled up. Furthermore, there are many shows available on demand, among which there are sure to be some that I might have recorded, had the opportunity arisen. Would I feel the same sense of loss if they were no longer available, as I felt for my own recordings? Not remotely.

But the clearest indication that I was overstating the actual value came as I was packing the old set-top box up to send it away. I wondered how much I would pay to somehow keep the programmes that would be forever lost. £20? Probably. £30? Probably not. Not the kind of thing to get deeply upset about.  In fact, I discovered that one relatively rare documentary was actually available on Amazon Prime. All I would need to do to watch it is to agree to take up Amazon’s latest offer of a one-month free trial of this service. Have I done so? Nope. Time to concede that my initial reaction to the loss of my recordings was well and truly exaggerated.

I have known about the endowment effect for many years. And still, the degree to which I was swept up in it last week was a remarkable reminder how deep our instincts are rooted.

Now those were truly valuable possessions (photo: Wessex Archaeology/Flickr CC BY-NC 2.0)

Of course, it is a good tendency to want to safeguard our possessions. But for our distant ancestors, possessions were, for thousands of years, often literally of vital importance (tools, weapons, food, protection against the elements. Many of our possessions are much more frivolous, and at best ‘nice to haves’ rather than life essentials. It makes sense to challenge our first intense reaction to a loss, and reflect on whether it is really worth getting worked up about. How much would we pay to keep something, or to acquire it if we didn’t already have it? Asking that question may be quite revealing, and prevent us from overreacting.

I am happy to report that I feel more than a little liberated, having cheerfully waved goodbye to my digital possessions. I feel no regret, and I am sure I will henceforth be keeping the endowment effect in check. Until the next time, of course.

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Zero shades of grey?

Society seems more polarized than ever: opinions tend to be devoid of nuance, leaving little opportunity for compromise and tolerance. Are we unavoidably on a course to a black-and-white world?

Our earliest primate ancestors, who emerged around 74 million years ago, were solitary foragers who lived nocturnal lives. About twenty million years later, two simultaneous transformations occurred, suggests research by evolutionary biologist Susanne Shultz and colleagues. Our forebears started leading more diurnal lives, as it was easier to find food during daylight hours. But that was also more dangerous, as they could no rely on the cover of darkness to avoid catching the attention of predators. So they formed groups to benefit from safety in numbers, not just as protection against predators, but also to defend territory. The tribal instincts that brought about and perpetuated this lifestyle, more than fifty million years on, are still manifesting themselves – and not always to our advantage. Are things getting out of hand?

Innately tribal

Cory Clark, a social psychologist at the University of Pennsylvania, and her colleagues evaluate the implications of present-day tribalism in a paper aptly titled Tribalism is Human Nature. While, to our ancestors, in-group loyalty was crucial for survival, today, we have large – to some extent global – and intricate societies, in which cooperation and competition form intricate patterns, and which require complex policies to function. Our ancestral tribes were territorial, and cooperation happened mostly within the tribe, but our current tribes are mainly political, and our societies rely on cooperation between tribes.

“Biased? Moi?” (Image: Anne Marie/Flickr CC BY 2.0)

And that is a problem. Tribal loyalties have given rise to biases which distort analysis and judgement, and lead to echo chambers: favouring information that supports the tribe’s interests, uncritically accepting arguments that serve its agenda, and out-group discrimination, for example. Belonging and loyalty become more important than accuracy and rigorous reasoning. Strongly held convictions, with highly emotional manifestations function as honest, trustworthy signals of faithfulness – the more dogmatic, the better. Tribes do not care for sound, dispassionate reasoning, but demand profound, unwavering belief in the cause.

They are prominent in sports, but tribes are the most consequential in politics, because that is closest to our values and moral norms, and at the same time where power is exerted. It is also a domain where issues are complex and ambiguous, which makes it a fertile ground for bias to dominate reasoning. And while tribal biases are still beneficial to promote group cohesion, they are not effective for making sound trade-offs, and for coalition-building.

How polarization happens

Tribalism is not equivalent to polarization, though. Something must happen for tribes to become more extreme, and for nuance to get lost. Gordon Brown, a psychologist at Warwick University, and colleagues developed a model to explore social networking phenomena such as polarization. Their point of departure is that, when we interact with others, two aspects are in tension with each other. We dislike projecting an extreme image within a social group (and thus risking exclusion), but we also prefer to act in accordance with our own underlying attitudes. We exhibit social extremeness aversion as well as authenticity preference. This implies that both private attitudes and social norms are not single points on an ideological spectrum, but distributions, which express how likely we are to express a particular attitude, or how likely it is to be expressed within a social group.

The authors provide an intuitive illustration. Imagine a moderately left-wing individual, with an attitude that is moderately held (i.e., a distribution that is neither wide nor narrow), in the context of a social group that is more right-wing. Based on the others’ expressed attitudes, she infers a social norm, and the attitude she expresses will be a compromise, influenced both by her private attitude, and by her perception of that norm – she does not want to stand out, but also remain sufficiently true to herself. That compromise comes at a cost, however. She deviates from her own attitude, and she is still some distance from the median social norm.

If the social norm is more extreme or more outspoken (and hence more narrowly distributed), she may conclude that any compromise would require a large sacrifice of authenticity, and still make her too extreme. In this case, she might prefer to fully express her authentic attitude, and accept that it makes her extreme. This is not a problem when she is able to shape her social network (by choosing the people to interact with), and this produces the conditions that facilitate polarization. In a bubble of like-minded people anyone can be their authentic self all the time – without being extreme. Social media are the perfect context in which this can, and does, happen.

Bridging the ideological gap

So, are we on course to become a black and white world, with zero shades of grey? Two economists, Michèle Belot at Cornell University and Guglielmo Briscese at the University of Chicago explored whether it is possible for Americans to bridge their ideological divides. They focused on two specific challenges: people prefer not to interact with others who don’t share their views, and even when they do, there might be preconditions for such engagement to be beneficial.

The enlightenment of voluntary engagement (image: jopwell/Pexels)

They recruited a representative sample of 2,500 Americans, asked them to indicate their opinion (on a 10-point scale) on three polarizing issues: abortion, gun control and immigration (e.g., “Current gun laws in the US are too strict = 0/too lenient= 10”). Participants were then offered the opportunity (rather than required) to listen to three recordings of less than one minute each of an opposing view. The voluntary nature was deliberate, as the researchers wanted to eliminate the reactance that often occurs when we are forced to do something that curtails or threatens our freedom. They also investigated whether engendering a shared sense of humanity influenced the process. Participants indicated their agreement with ten statements (taken from the UN’s Universal Declaration of Human Rights and from rules of etiquette), and were then told that the people in the sound clips with opposing views agreed with them on at least nine of the ten statements.

The study produced two main findings. First, participants showed a remarkably high willingness to engage with opposing views. More than two thirds of the participants chose to listen to all three, and a further 18% listened to two clips, despite the fact that there was no obligation (participants could decide not to listen at all and finish the experiment earlier). Unexpectedly, establishing common ground on either human rights or etiquette had no effect on this willingness to engage. Second, and even more remarkably, 10% of participants reported having changed their view after listening to the recordings. Here too, emphasizing the common ground had no influence on the views, but it did reduce polarization on the topics of abortion and immigration.

These results suggest that polarization is neither inevitable nor irreversible. Voluntary engagement between opponents, especially when it is clear that there is common ground between them on broader issues, can help bring about more nuanced perspectives. Shades of grey don’t have to morph into black and white. (By the way, when did you last listen to the views of an ideological opponent and consider their arguments?)

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The strange phenomenon of U-turn aversion

(featured image: kreatikar/Pixabay)

Reversals of earlier decisions – U-turns – attract a lot of criticism, and we tend to be reluctant to make them. Why is that, and is this a problem?

In October 1980, Margaret Thatcher, just in the second year of her role as prime minister, made a speech to the Conservative Party conference that would define her leadership style. Alluding to pressure, including from within her own party, to soften her policy of deregulating the economy and perform a ‘U-turn’, she made arguably the most memorable pun ever heard in such a speech: “You turn if you want to… the lady’s not for turning.” Forty-two years on, another very new Tory prime minister (who likes to model herself on the Iron Lady) likewise stubbornly refused to consider a U-turn on her government’s “mini” budget, despite significant turmoil in the financial markets, and considerable political opposition – including in her own party – to one particular measure, the abolition of highest rate of income tax. Less than twelve hours after she kept insisting she would not budge, a U-turn was executed. Why are U-turns such a big deal, resisted almost irrationally by those who are urged to do so, and widely derided by many when they are being made?

It is a mystifying phenomenon. If, at some point, a certain action is right, then it would seem to make perfect sense to take that action, regardless whether it is a reversal of the current one. When it starts to rain, we do not consider that someone who opens their umbrella is making a humiliating U-turn. As the great economist, John Maynard Keynes, (never actually) said, “When the facts change, I change my mind.” It looks like there is everything to gain from responding to new circumstances, and nothing to lose. Or is there?


No U-turn for Gene Kelly – the umbrella remains folded (photo: screenshot Singing in the Rain)

Imagine you are walking with someone else, and you feel a couple of raindrops falling on your heads. Your companion opens her umbrella, but you believe that it’s just a few drops and it won’t last – no need to open your brolly. Here we see a hint of what we might experience as a loss when we change our mind. By declaring the rain insufficiently severe to warrant unfolding your umbrella, you implicitly committed yourself to a certain course of events. Might you feel a bit reluctant, having made that commitment, to concede too quickly that it is actually a decent shower and open your umbrella as well? The moment you do so, you effectively admit that you were wrong – that you lost. (By the same token, if you open your brolly at the first drop, and there is never a second one you may have to concede that you were wrong, too.)

And we do not like being wrong or being a loser.

The more we are mentally attached to the course of action we are pursuing, the harder we tend to find it to change tack – to ‘make a U-turn’. The weakest manifestation of this is probably the status quo bias, our tendency to keep things the way they are. This is mostly an adaptive trait, which stops us constantly reconsidering what we are doing (which could waste a lot of time and cognitive energy). If this is the only element at play, the resistance to alter our course is low, and as soon as there is a good reason to stop doing so, we will.

Things become tougher if we have made a clear investment in our intended course of action. If we have just spent two hours traveling to visit a most interesting exhibition but we find it closed, the urge is palpable to hang around and find something else – anything – to do, just because we made the effort. So, we end up wandering around a dreary town, and sipping lukewarm tea in a sad café, instead of just shrugging, learning the lesson next time to check the opening times, and making a U-turn towards home where we have many better things to do. Justifying perseverance by already invested cost or effort is known as the sunk cost fallacy. The investment signals a commitment that we feel we must honour, and not doing so is an admission that we were wrong. (This can be a significant issue in business or public projects, where sometimes effort and expenditure pile up with little prospect of a satisfactory outcome, yet nobody is willing to pull the plug, because the past investment is so large.)

The strongest resistance to making a U-turn, however, occurs when our decision was inspired by principles or ideology. We chose what to do, not by meticulously weighing up pros and cons, but because we know it is the right thing to do. If that is our motivation, we have little interest in any discussing or analysing gains and losses. A U-turn can then only mean one of two things. Either the principle or ideology that we follow, and that we value so much, is wrong – and therefore we are wrong, or we failed to consider the wider picture, perhaps even other principles that are in conflict with the one we are clinging on to, and therefore we are incompetent. Both our self-perception and our reputation in others’ eyes will suffer grave damage if we are seen to make a U-turn. Nightmare! So, we hang on, dismiss reasoned argument with a heavy dose of motivated reasoning, and only make matters worse. A U-turn may be bad, a late U-turn is terrible.

Avoiding the embarrassment of a U-turn

It is true that making a U-turn is not greeted with thunderous applause. Those who thought you were doing the right thing in the first place will castigate you because they now think you are doing the wrong thing and betraying the cause. Those who thought you were doing the wrong thing but now see you, at last, doing the right thing, will suspect your motives. Both, as well as anyone who didn’t feel strongly either way will berate you for flip-flopping, or for being a hypocrite or an opportunist. A U-turn will not gain you many fans.  

But these are condemnations motivated by the critics’ beliefs, that can easily be shrugged off. What should worry you much more that some will question your judgement. Sure, a U-turn does not necessarily indicate that your decision making was flawed. If there has been a significant, unexpected change in circumstances, it would be much more foolish to persist than to alter course. In all other cases, though, changing course certainly raises legitimate questions. If, the moment you feel there is no other choice than to make a 180-degree turn, you are visited by the nagging feeling that you could have known this moment might come, those who doubt your judgement have a point.

Not every prime minister stands this firm to resist an embarrassing U-turn (photo: screenshot Youtube

The best way to avoid embarrassing U-turns is to avoid taking the wrong direction to start with. What might help is, before making up your mind, to systematically consider the reasons why your prospective decision is a good one. What will be gained, but also what will need to be sacrificed to realize the gains? Collect evidence in support of it, and leave no assumption hidden and untested. This is only half the work. Devote as much time and effort to contemplating the reasons why your decision might be a bad one. Play devil’s advocate, and steel man the case against your proposed action, i.e., make the strongest possible argument for the alternative. Challenge your own claims that the gains are large and certain, and the sacrifices minor and worth making.

If your decision is in any way predicated on principles, consider other principles that you, and the important stakeholders in the decision, might value. Check for conflicts, and weigh up which principle is the heaviest. Then re-evaluate your planned course of action: is it still such a good idea? If it is, ‘share your workings’ just like at an exam – in explaining and persuading your audience, show how you arrived at your judgement, and don’t hide behind platitudes and vague clichés. Even if you enjoy high levels of trust, don’t rely on it to make your case – whatever trust others have in you comes ultimately from your judgement, so use that to your advantage. If you have to make a U-turn, it’ll be a lot easier to argue why in a transparent way, without losing face.

Sadly, all this good advice may be of little use to prime ministers and senior cabinet members (in case I count any among my readers). Recent research by University of Linköping behavioural scientist Julia Aspernäs and colleagues suggests that ideological beliefs mess with our ability to reason logically. They found people were better at correctly identifying logical statements as valid if, from their ideological perspective, the conclusion was believable (or invalid if it was unbelievable). They were worse in the opposite case. Perhaps politicians might, in order to make better choices, engage political opponents?

Posted in Behavioural economics, Cognitive biases and fallacies, Economics, Emotions, politics, Psychology, Society | Tagged | Leave a comment

Profit and other motives

(featured image: Province of British Columbia/Flickr CC BY NC ND 2.0)

Is the care sector incompatible with profit motives?

Some people take a dim view of profit. It evokes images of fat, top-hatted men raking it in. In the UK, that concept cannot provoke more outrage than if it is linked to the National Health Service (NHS), an institution only marginally less sacred than the Church of England. If health or social care are delivered by organizations that must make a profit, the idea that trade-offs will need to be made between profit and quality is not far-fetched. So, do those who oppose commercialization or privatization have a point? Should care be kept out of the hands of profit-seeking capitalists?

Motive needed

Very few people are able to meet their needs without any help from others. We cannot possibly grow all the food we need, make our own clothing, shelter and tools from scratch, let alone entertain or cure ourselves. So, what motivates these others to do something for us? In The Wealth of Nations, Adam Smith, widely regarded as the father of modern economics, put it thus: “It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own self-interest. We address ourselves not to their humanity but to their self-love, and never talk to them of our own necessities, but of their advantages”.

According to Smith, other people do something for us (and, by the same token, we do something for others) out of self-interest. There is something in it for us. That can be the money received from the sale of meat, beer or bread, but other, non-material instances of self-interest too may motivate us to do something for someone else. We may help out colleagues at work to establish a good reputation and build status; we may do a friend a favour because doing so reinforces a social bond of reciprocity; we may act as a coach for the junior soccer team because, directly or indirectly, it simply gives us pleasure. Even if there is a material, extrinsic motive like money, there is often also an intrinsic motive. Not everything butchers, brewers and bakers do directly provides them with more profit. They might put in extra effort because they want to do a good job and be proud of the result.

Is this what you think of when you hear about the ‘profit motive’? (photo: the author via DALL·E)

But when it comes to providing care, the profit motive seems to be inappropriate. Perhaps this is in part because care-giving is something that has, for ages, been taking place within the family (mum and dad looking after their offspring, or children looking after their own elderly parents). Pretty much the only motive here is intrinsic: we do it because we feel it is right.

Profit for thee = loss for me

Yet, despite the misgivings about money for care, few people seem to oppose individuals being remunerated for providing social or nursing care, or for treating people who are sick or injured. We don’t expect doctors, nurses and home helpers to work for free – on the contrary, many people feel they should be paid more. But if a private company makes a profit providing care, some see this as money for nothing (it is in addition to the pay of the staff who do the work), going straight into its pockets. If the service was provided by the state, there would be no profit, and hence it would be cheaper. This perspective overlooks the fact that the profit is in effect the return on the capital that the shareholders invested in order to be able to provide the service. The state must also provide that capital, and that comes either from taxes, or from borrowing (on which interest must be paid – out of taxes). State-provided care may look cheaper, but that is because part of the cost is covered through taxes. This is an option not available to private companies, which must instead attract capital from investors, who are expecting a return on their investment.

More even than this misconception of profit, perhaps the most important reason why people might be averse to profit-seeking companies delivering care is rooted in zero-sum thinking. The profit motive would mean that, in any trade-off, enhancing profit is favoured to the detriment of the quality of the care. The existence of high-quality goods and services in every other market delivered private companies suggests, however, that this is by no means inevitable. Might care provision be an exception, and if so, why? And would public provision (or absence of a profit motive) assure maximum quality?

Inevitable trade-offs

Trade-offs are unavoidable whenever resources are scarce, and indeed, companies do, strictly speaking, face a trade-off between spending money on the quality of its goods or services, and keeping it as profit to distribute it to the shareholders. Why might they favour the former? Adam Smith provides the answer: because it is in their self-interest to do so. They can only make a profit if customers buy their products or services. If spending and investing is strengthening the long-term income stream from happy customers, then it is worth doing so, even if it means less profit in the short-term. Customers value good quality at a reasonable price, and will come back if that is what they get. While it is harder, alongside the extrinsic profit motive, to conceive of intrinsic motives for a company, some may well cultivate a culture that emphasizes customer satisfaction, and that encourages managers and staff to take it into account in their activities and decisions. But this is only relevant if the business is sustainably profitable.

It’s easier to change hairdressers than to change care homes (photo: Casas Rodriguez collection/Flickr CC BY NC ND 2.0)

The basic principles are the same for a care provider as for a biscuit manufacturer or a chain of hairdressers, but the practicalities differ. While it is easy to switch biscuit brands or hair salons, with care in general, and particularly concerning residential care homes, that is not so easy. Patients or residents typically do not have the same power to walk away and choose another provider as a consumer who buys biscuits or wants their hair cut. In many cases they are not even the paying customer: it is insurance companies or the state that buy the service. This complicates matters, and the incentive to make the right trade-offs for patients or residents is not so strong as when customers can easily and freely opt for a different supplier if the present one is unsatisfactory. Unless there is robust oversight, less scrupulous providers may well be able to get away with offering inferior services, while squeezing the last bit of profit out of the operation.

Individual staff, too, must make trade-offs – not with money and profit, but with time, effort, attention and diligence. It is their intrinsic motivation to do well by the people in their care that counterbalances any innate tendencies to be (too) frugal with scarce resources like time and effort. Arguably, the choices they make many times every day determine the quality of the care as much as, if not more than, management decisions.

Who does it better?

Would public provision be a better option? The absence of the extrinsic profit motive evidently eliminates the risk that profit is prioritized over quality of service. But there is also no incentive to provide high-quality care, and hence to invest in appropriate facilities, to update and enhance procedures, to train staff and so on, in order to attract and retain customers. When we care for our nearest and dearest, we may well do so entirely out of intrinsic motives, but would this automatically apply to staff and managers in public care institutions? Would they necessarily attract carers with more intrinsic motivation to do well by the people in their care? Are public sector workers more dedicated than their private sector colleagues? That is not so sure. (One study by Paulo Monte, an economist at the university of Paraiba, Brazil, suggests that public sector workers do less unpaid overtime and are more likely to be absent than their private sector counterparts.)

Self-interest is a formidable force, which living organisms have been honing for billions of years. It can be a formidable force for good service to others, especially combined with intrinsic motivation. But it requires the right circumstances to prevent it degenerating into greed – such as a competitive market in which customers keep providers on their toes, and can turn away from those that fail to deliver. If the actual customers of care providers (the state and insurers) can assure such a set-up, then the profit motive can work to its advantage.

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