I am trying to remind myself that everyone, myself included, operates on a complex set of ideas, narratives, and beliefs that are sometimes coherent, but often conflicting. When I view my own beliefs, I am tempted to think of myself as rational and realistic. When I think of others who I disagree with, I am prone to viewing them in a simplistic frame that makes their arguments irrational and wrong. The reality is that all of our beliefs are less coherent and more complex than we typically think.
Daniel Kahneman’s book Thinking Fast and Slow has many examples of how complex and contradictory much of our thinking is, even if we don’t recognize it. One example is competing biases that manifest within us as individuals and can be seen in the organizations and larger groups that we form. We can be exaggeratedly optimistic and paralyzingly risk averse at the same time, and sometimes this tendency can actually be a good thing for us. “Exaggerated optimism protects individuals and organizations from the paralyzing effects of loss aversion; loss aversion protects them from the follies of overconfident optimism.”
On a first read, I would expect the outcome of what Kahneman describes to be gridlock. The optimist (or optimistic part of our brain) wants to push forward with a big new idea and plan. Meanwhile, loss aversion halts any decision making and prevents new ideas from taking root. The reality, as I think Kahneman would explain, is less of a conscious and deliberate gridlock, but an unnoticed trend toward certain decisions. The optimism wins out in an enthusiastic way when we see a safe bet or when a company sees an opportunity to capture rents. The loss aversion wins out when the bet isn’t safe enough, and when we want to hoard what we already have. We don’t even realize when we are making these decisions, they are just obvious and clear directions, but the reality is that we are constantly being jostled between exaggerated optimism and loss aversion.
Kahneman shows that these two biases are not exclusionary even though they may be conflicting. We can act on both biases at the same time, we are not exclusively a risk seeking optimists or exclusively risk averse. When the situation calls for it, we apply the appropriate frame at an intuitive level. Kahneman’s quote above shows that this can be advantageous for us, but throughout the book he also shows us how biases in certain directions and situation can be costly for us overtime as well.
We like simple and coherent narratives. We like thinking that we are one thing or another, that other people are either good or bad and right or wrong. The reality, however, is that we contain multitudes within us, act on competing and conflicting biases, and have more nuance and incongruency in our lives than we realize. This isn’t necessarily a bad thing. We can all still survive and prosper despite the complexity and incoherent beliefs that we hold. Nevertheless, I think it is important that we acknowledge the reality we live within, rather than simply believing the simple stories that we like to tell ourselves.