(2900 words; 15 minute read.)
[5/11 Update: Since the initial post, I've gotten a ton of extremely helpful feedback (thanks everyone!). In light of some of those discussions I've gone back and added a little bit of material. You can find it by skimming for the purple text.]
[5/28 Update: If I rewrote this now, I'd now reframe the thesis as: "Either the gambler's fallacy is rational, or it's much less common than it's often taken to be––and in particular, standard examples used to illustrate it don't do so."]
A title like that calls for some hedges––here are two. First, this is work in progress: the conclusions are tentative (and feedback is welcome!). Second, all I'll show is that rational people would often exhibit this "fallacy"––its a further question whether real people who actually commit it are being rational.
Off to it.
On my computer, I have a bit of code call a "koin". Like a coin, whenever a koin is "flipped" it comes up either heads or tails. I'm not going to tell you anything about how it works, but the one thing everyone should know about koins is the same thing that everyone knows about coins: they tend to land heads around half the time.
I just tossed the koin a few times. Here's the sequence it's landed in so far:
T H T T T T T
How likely do you think it is to land heads on the next toss? You might look at that sequence and be tempted to think a heads is "due", i.e. that it's more than 50% likely to land heads on the next toss. After all, koins usually land heads around half the time––so there seems to be an overly long streak of tails occurring.
But wait! If you think that, you're committing the gambler's fallacy: the tendency to think that if an event has recently happened more frequently than normal, it's less likely to happen in the future. That's irrational. Right?
Wrong. Given your evidence about koins, you should be more than 50% confident that the next toss will land heads; thinking otherwise would be a mistake.
(This is a guest post by Brian Hedden. 2400 words; 10 minute read.)
It’s now part of conventional wisdom that people are irrational in systematic and predictable ways. Research purporting to demonstrate this has resulted in at least 2 Nobel Prizes and a number of best-selling books. It’s also revolutionized economics and the law, with potentially significant implications for public policy.
Recently, some scholars have begun pushing back against this dominant irrationalist narrative. Much of the pushback has come from philosophers, and it has come by way of questioning the normative models of rationality assumed by the irrationalist economists and psychologists. Tom Kelly has argued that sometimes, preferences that appear to constitute committing the sunk cost fallacy should perhaps really be regarded as perfectly rational preferences concerning the narrative arc of one’s life and projects. Jacob Nebel has argued that status quo bias can sometimes amount to a perfectly justifiable conservatism about value. And Kevin Dorst has argued that polarization and the overconfidence effect might be perfectly rational responses to ambiguous evidence.
In this post, I’ll explain my own work pushing back against the conclusion that humans are predictably irrational in virtue of displaying so-called hindsight bias. Hindsight bias is the phenomenon whereby knowing that some event actually occurred leads you to give a higher estimate of the degree to which that event’s occurrence was supported by the evidence available beforehand. I argue that not only is hindsight bias often not irrational; sometimes it’s even rationally required, and so failure to display hindsight bias would be irrational.
(This is a guest post by Sarah Fisher. 2000 words; 8 minute read.)
We could all do with imagining ourselves into a different situation right now. For me, it would probably be a sunny café, with a coffee and a delicious pastry in front of me––bliss. Here’s another scenario that seems ever more improbable as time goes by (remember when we played and watched sports…?!):
(2500 words; 11 minute read.)
Last week I had back-to-back phone calls with two friends in the US. The first told me he wasn’t too worried about Covid-19 because the flu already is a pandemic, and although this is worse, it’s not that much worse. The second was—as he put it—at “DEFCON 1”: preparing for the possibility of a societal breakdown, and wondering whether he should buy a gun.
I bet this sort of thing sounds familiar. People have had very different reactions to the pandemic. Why? And equally importantly: what are we to make of such differences?
The question is political. Though things are changing fast, there remains a substantial partisan divide in people’s reactions: for example, one poll from early this week found that 76% of Democrats saw Covid as a “real threat”, compared to only 40% of Republicans (continuing the previous week’s trend).
What are we to make of this “pandemic polarization”? Must Democrats attribute partisan-motivated complacency to Republicans, or Republicans attribute partisan-motivated panic to Democrats?
I’m going to make the case that the answer is no: there is a simple, rational process that can drive these effects. Therefore we needn’t—I’d say shouldn’t—take the differing reaction of the “other side” as yet another reason to demonize them.
Just published a new piece in the Oxonian Review. It argues that a general problem with claimed demonstrations of irrationality is their reliance on standard economic models of rational belief and action, and illustrates the point by explaining some great work by Tom Kelly on the sunk cost fallacy and by Brian Hedden on hindsight bias.
Check out the full article here.
2400 words; 10 minute read.
I bet you’re underestimating yourself.
Humor me with a simple exercise. When I say so, close your eyes, turn around, and flicker them open for just a fraction of the second. Note the two most important objects you see, along with their relative positions.
I bet you succeeded. Why is that interesting? Because the “simple” exercise you just performed requires solving a maddeningly difficult computational problem. And the fact that you solved it bears on the question of how rational the human mind is.
2400 words; 10 minute read.
We all know that people now disagree over political issues more strongly and more extensively than any time in recent memory. And—we are told—that is why politics is broken: polarization is the political problem of our age.
2400 words; 10 minute read.
Do people tend to be overconfident? Let’s find out. For each question, select your answer, and then rate your confidence in that answer on a 50–100% scale: