Learn, Make, Teach.

Category: Decisions (Page 2 of 2)

The Beauty Contest

This post was originally an email sent to the Better Questions Email List.

For more like it, please sign up – it’s free.

Since we’ve all had enough of being cooped up inside and self-quarantining…

Let’s imagine a simpler time.

You’re walking down an ocean boardwalk.

You can feel the sun on your neck, warming you all the way through.

The smells of salt air, cotton candy, roasting peanuts linger in the air.
The sounds of summer wash over you:
The gentle murmur of ocean waves…
The joyous cries of children playing…

The mechanical music of various sidewalk rides and games…
The calls of seagulls floating overhead.

You work your way through the crowds. You’re not headed anywhere in particular, just enjoying the scene.
As you walk you come across a large crowd gathered around an elevated stage. You stop to see what’s going on.
Three men stand on the stage next to each other. A carnival barker shouts through a megaphone:

“Ladies and gentlemen! This is your chance to be handsomely rewarded! Great prizes in store for those who are the best judge of beauty! How finely tuned is your romantic apparatus? Now is the time to find out!”

The barker gestures to the men, who smile and wave.

The three handsome contestants of the beauty contest.

“Each one of you gets a vote – which of these dashing young men is the handsomest?

Which of these rugged exemplars of American manhood is the most appealing?

Vote, and if your choice gets the most votes, a fabulous prize will be yours!”

Someone hands out slips of paper to the crowd; you’ve got a few moments to decide on your vote. You’ve got admit…you like the sound of “fabulous prizes.” It’d be nice to win.

So…

Who do you vote for?
Let’s leave aside the obvious fact that it would be impossible to choose. Putting anyone in such a hopeless scenario would be cruel.

Underlying this situation is one of the most powerful mental models I’ve ever come across.

It’s an idea that – once you get it – changes how you view the world around you.

Rather than telling you, though…let’s see if we can reason it out. 🙂

How do we decide who to vote for?

The simplest answer is, “Vote for whomever you like the most.”

Are you attracted to the cool, mysterious vibe of contestant 1?

Vote for contestant 1.
Maybe you’re a huge pie fan, and so you’re drawn to the caring and lovable vibe of contestant 2.

Vote for contestant 2.

Or maybe it’s the raw, animal sexuality of the muscular 3 that draws you in.

Vote for contestant 3.

This is first-order decision making. Just vote for your preference!

But is this best way to vote, if our goal is to win the prize?

Probably not.

If we want to win, we need to make sure that we vote for the winning contestant.

That means we need to think not just about who we like, but how other people will vote.
How do you think other people will vote, on average?

We might say:

“Well, I prefer 1, because I like babies. But I think most people are attracted to hyper-masculine muscle-men, so most people will vote for 3…therefore I’ll vote for 3.”

Or we might think:

“While I prefer 3, I think that much raw machismo will simply be too over-stimulating for most. They’ll be so simultaneously titillated and intimidated that they will, in a kind of sexual panic, vote for the more soothing and comforting presence of 2.”
We’re now making decisions based on how we believe other people will vote.

This is second-order decision making:

Making decisions based on how we believe other people will vote.

Let me draw your attention to two important points here:
1. Second-order decision making requires us to have an opinion about what other people think.
We’re making guesses about what’s in other people’s heads. Hard to do.

2. Second-order decision making assumes that everyone else is making first-order decisions.

“They’re voting based on their preferences, while I’m voting based on what I think their preferences are.

But is this the best way to vote, if we want to win the prize?
Probably not.
Think about this:

Do you believe you are the only person to come up with second order thinking?

Do you believe you’re the only one smart enough to realize you shouldn’t vote based on your preferences, but on what you believe about other people’s preferences?
Probably not.

If you’ve discovered second order decision making, it’s probable that other people have as well.
And if they’ve discovered second order decision making, that means they’re not deciding based on their preferences, but rather on what they believe the preferences of other people will be.
This brings us to third-order decision making:

Making decisions based on what we believe other people believe about what other people think.
So, it’s not:

“Who do I think is most attractive?”
And it’s not:

“Who do I think most people find most attractive?”

It’s:

“Who do most people think most people think is most attractive?”

There’s no reason to stop there, either.
We could keep going to fourth and fifth-degree decision making if we wanted.

This idea is nicely summarized in this scene from The Princess Bride:

It’s this kind of thinking…

But spread out among a large group of people.

In game theory, this is called the Common Knowledge Game.

How do we decide best, when the best decision depends on how other people decide…

And everyone is making second or third order decisions?
How do we think about what other people think about what other people think?

Do I put the Iocaine powder in my glass, or yours?

The Common Knowledge Game, once you start to look for it, is everywhere…

And it’s critical to thinking clearly about situations like a pandemic.

Bad Priors

This post was originally an email sent to the Better Questions Email List. For more like it, please sign up – it’s free.

“The map is not the territory.” Alfred Korzybski

Are you confused by the decisions people make?

I am.

Do you struggle to understand how, exactly people could believe what they believe?

Me too.

In the next couple emails, I’m going to try and hash this out.

(Don’t worry – I haven’t moved on from productivity. Just in research mode.)

Let’s start with statistics.

Now, if your eyesrolled into the back of your head – I get it.

I, too, spent my life believing I was “bad at math” and hating everything mathematical.

As I’ve grown older, I’ve become interested in picking up the mathematical mode of thinking

…if not the calculations, exactly.

When you try to learn math without actually doing any math problems, you get drawn to statistics.

Statistics – and statistical reasoning – are immediately applicable to life, so it’s fun!

(Trust me)

Let’s start today off with a statistical puzzle:

What percentage of American men are named Tom?

No googling, now.

It is unlikely you have any special insight into this problem…

(unless you work at the Census bureau…)

But I’d still like you to make a guess.

Go ahead – think of a number that sounds right to you.

Got it? OK – here’s the answer I got from Google:

A screenshot of Google that reads "99.78 percent of people with the first name Thomas are male."

(I know, I said no Googling, but it’s my newsletter and I’ll do what I want)

OK, so Google didn’t understand the question.

You may have got a cheap laugh out of that image, though.

Let me ask you another question:

How did you make your guess?

And how did you know the one in the image was wrong?

See, it’s rare for you to come to a question like with no information whatsoever.

Every single moment of your life, you are amassing a database of information about the world.

You estimate statistical likelihoods based on what you’ve experienced.

When I asked you to guess you considered how many Toms you know, or have heard of.

Then you did a rough calculation in your head – even if you were unaware of it.

That information you brought to the table – your beliefs about how many Toms there are – is a prior.

Your priors are all the information about the world that you bring to any decision making process…

What you believe before you see any specific evidence.

You consult that information before you make a prediction.

And of course, all decisions are just predictions about how things will turn out.

Your priors influence what you predict AND how you interpret evidence afterwards.

As Jordan Ellenberg points out in How Not To Be Wrong:

“If an experiment provided statistically significant evidence that a new tweak of an existing drug slowed the growth of certain kinds of cancer, you’d probably be pretty confident the new drug was actually effective.

But if you got the exact same results by putting patients inside a plastic replica of Stonehenge, would you grudgingly accept that the ancient formations were actually focusing vibrational earth energy on the body and stunning the tumors? You would not, because that’s nutty. You’d think Stonehenge probably got lucky.

You have different priors about those two theories, and as a result you interpret the evidence differently, despite it being numerically the same.”

Our priors are essential to how we understand the world.

So the real question is:

How good are my priors?

To answer that question, we counter with another…

(Have you noticed that’s a theme with these fucking emails? Jesus, Dan)

How representative of the world around me are my experiences?

An important thing to note about priors is that they rarely spring forth from nothing. They’re based on how we experience the world.

If 50% of the men you meet are Toms, you’d be likely to extrapolate something from that.

In fact, you’d be silly not to.

But if you live in Tomsville, state capital of West Tomsginia – a state where the name Tom is 10x as common as everywhere else – that prior knowledge of Toms can lead you astray when predicting how many Toms are in the world…

Even though it’s based on lived experience.

This is the rub: our priors can be both real and inaccurate.

Take our perception of crime.

We over-estimate how likely we are to fall victim to crime, despite national violent crime rates dropping for more than a decade.

Why is this? As Brian Christian and Tom Griffiths write in Algorithms to Live By:

…the representation of events in the media does not track their frequency in the world. As sociologist Barry Glassner notes, the murder rate in the United States declined by 20% over the course of the 1990s, yet during that time period the presence of gun violence on American news increased by 600%.

And this is from someone who has strongly defended the news media.

When you talk with friends, you tend to talk about what’s most interesting, what will make a cool or fun story.

We rarely talk about what’s representative, which leads to a skewed sense of what other people experience.

Or your Instagram feed – what gets deemed worthy of getting posted to the ‘gram?

It isn’t daily occurrences, it isn’t everyday moments – it’s what stands out, what’s special.

A non-stop scroll of everyone’s special moments can make those moments seem more common than they are.

Our personal reality is like glimpsing a forest through a keyhole:

True, in the sense that it depicts reality…

But misleading in the sense that it represents only a fraction of a fraction of the whole.

All this makes it very, very difficult to maintain accurate priors.

And that brings us back to our friend Korzybski, quoted at the beginning of this essay.

“The map is not the territory.”

Reality is far too vast for us to comprehend. It’s too much data.

But we can’t give up – we have to make our way through the world.

So we use our priors as a map.

Maps help us predict what’s next – help us find our way through the landscape.

But if our map is wrong – if our priors are wrong – we end up in the wrong place.

This, by the way, is how we get to broad empathy for people, no matter how wrong-headed they may be:

Their priors are wrong….

And so are ours.

It’s just a question of how wrong.

Next week, I’ll expand a bit on this map and territory stuff. The week after, we’ll talk about how you actually apply this…

– to make more money

– to be more successful

– to avoid complete disaster.

Just so you know this is actually going somewhere.

🙂

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