Category: Gerd Gigerenzer – Risk Savvy

External Versus Internal Goals

External Versus Internal Goals

Posted on by jabittan
I don’t think about it as much any more, but several years ago I was nearly obsessed with the idea of intrinsic versus extrinsic motivation. I ran cross country in high school and at the time I was very motivated by winning medals, winning a state championship, and impressing my friends and family. After graduating and starting college, I was no longer on a team, but I was at the peak of my running and I was still motivated by shiny medals and bragging rights. For a long time, my motivation with running was extrinsic and I was focused more on external versus internal goals.

 

However, after I finished my undergrad and started working, got married, and eventually returned for more school, I had to re-think my motivation with running. I have asthma, so I was never quite able to be the best runner in any given race, but I was always competitive and if I got lucky I could win a race here or there. I could live up to the external goals that I set for myself. But once I started working 40 hour weeks and had to balance my time between work, a new wife, and eventually returning to school, I couldn’t run enough or be competitive enough to match those external goals. If I was going to keep running at all, my motivation had to be intrinsic, and I had to identify internal goals that could challenge me and keep me motivated. This is why a few years back my mind was constantly thinking about ideas of motivation.

 

The last few years, extrinsic versus intrinsic motivation and external versus internal  goals haven’t been on my mind as much, but thoughts about motivation and goals came back to me while reading Gerd Gigerenzer’s book Risk Savvy. When discussing recent increases in rates of anxiety among young people today he writes:

 

“The best explanation can be found in what young people believe is important in life: in the distinction between internal and external goals. Internal goals include becoming a mature person by strengthening one’s skills, competences, and moral values, and living a meaningful life. External goals have to do with material rewards and other people’s opinions, including high income, social approval, and good looks. People’s goals have shifted steadily since the end of World War II toward more and more extrinsic goals. Annual polls of college freshman showed that recent generations judged being well off financially as more important than developing a meaningful philosophy of life.”

 

I think that Gigerenzer’s message is a little overblown and has a little kids these days element to it, but I think the trend he identifies is generally correct, but possibly mischaracterized*. Studies have shown that our overall level of wealth or wellbeing doesn’t really mean much to us and isn’t predictive of happiness. Our expectations and a sense of improved wellbeing and opportunity is predictive of happiness. Today, young people are more connected to the world. They see more possibilities, see more ways to use and spend wealth, and have a much bigger world than children around the time of WWII. A child growing up in a small town around the 1950’s or 1960’s may have been impressed by the dentist’s house and new car, but today, a child growing up in a small town can see far more opulence than the dentist’s Mercedes. He can easily log into any social media platform and see LeBron’s mansion and Drake’s new Bugatti. It may not be that people’s goals have shifted between external or internal, but that the external goals have become far more conspicuous, expensive, and extravagant, making them all the more noteworthy and hard to reach.

 

Combine this increase in expectations of wealth and standards of living with a near constant consumer culture messaging in TV, radio, and social media advertisements, and it is not hard to imagine that external goals have become more important than internal goals as Gigerenzer notes. We are presented an image of a successful life that is full of material possessions, to the point of being unattainable. Having financial wealth, owning a large home, and having lots of toys is presented as more than just an image of success, it is in some ways presented as a morally correct way to live.

 

The problem, as I learned with running, of having external versus internal goals, is that you can’t always live up to external goals based on the ideas, skills, and thoughts of other people. No matter how hard I trained, I was simply never going to be the best runner in my city because I have asthma. On top of that, I have other constraints that are inherent to the life I live. By sticking to external goals, I would have been burnt out and defeated, likely giving up running completely. Much of the motivation and goals we set for ourselves in life are similar to the goals I had with running. We want a certain income level, a certain size house in a certain neighborhood, and a certain car to go with it all because all those things will impress other people. External goals create pressures that don’t need to exist, and can drive us to anxiety as we try to impress other people.

 

Internal goals are more realistic and can be more appropriately tailored to our actual interests, abilities, and limitations. For example, I have goals around running that are focused on health, avoiding injury, and feeling good about my physical shape. I can still have goals around running a certain mileage or a certain pace, but I try hard to calibrate those goals around my own abilities rather than the performance of my friends. Internal goals that are focused on growth and development rather than displays of wealth and social status are healthier and can actually help us achieve more than external goals that don’t align well with who we are and how we actually want to live. In the end, being able to recognize this and adjust our goals is important if we want to flourish and avoid unnecessary stress and anxiety.
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*I wrote this post about a week ago, and since then have read a section of Steven Pinker’s book Enlightenment Now which further challenges Gigerenzer’s assertion that college students these days are different than college students of the post-war period. Pinker notes that studies like the ones that Gigerenzer highlights are unreliable because it is almost impossible to accurately compare different cohorts at different times. Far more people attend college today than they did during the post-war period. It is possible that even more people with intrinsic motivations for learning attend college today, but that they may be outnumbered in surveys by students with external motivations. It is possible that the increasing number of students just changed the mixture of responses, and doesn’t represent some overall change in human mindsets. Pinker presents additional challenges to these long-term comparisons which I will try to link to in a future post.
Social learning and risk aversion

Social Learning and Risk Aversion

Posted on by jabittan
In his book Risk Savvy, Gerd Gigerenzer looks at risk aversion in the context of social learning and presents interesting ideas and results from studies of risk aversion and fear. He writes, “In risk research people are sometimes divided into two kinds of personalities: risk seeking and risk averse. But it is misleading to generalize a person as one or the other. … Social learning is the reason why people aren’t generally risk seeking or risk averse. They tend to fear whatever their peers fear, resulting in a patchwork of risks taken and avoided.”

 

I agree with Gigerenzer and I find it is normally helpful to look beyond standard dichotomies. We often categorize things into binaries as the example of risk averse or risk seeking demonstrates. The reality, I believe, is that far more things are situational and exist within spectrums. In general for most of our behaviors that we may want to categorize with a dichotomy, I would argue that we are often much more self-interested than we would like to admit and often driven by our present context to a greater extent than we normally realize. People are not good or evil, honest or dishonest, or even hardworking or lazy. People adjust to the needs of the moment, fitting what they believe is in their best interest at a given time with influence from a great deal of social determinants. Social learning and risk aversion helps us see that dichotomies often don’t stand up, and it reveals something interesting about who we are as individuals within a larger society.

 

People have a patchwork of things they fear and a patchwork of risks they are willing to accept. On the whole, we generally won’t accept a bet unless the payoff is twice the potential gamble (there is an expected value calculation we can do that I don’t want to dive into). However, we are not always rational and calculating in the risks and gambles we take. We are much more likely to die in a car crash than an airplane crash, yet few of have any hesitation when buckling our seat for the drive to work but likely feel some nervousness during takeoff on a short flight. We are not risk seeking if we are more willing to drive than fly (in fact it isn’t really appropriate to categorize this activity as either risk seeking or risk avoiding), we are simply responding to learned fears that have developed in our culture.

 

What this shows us is that we are creatures that respond to our environment, especially our social environments. We often think of ourselves as unique individuals, but the reality is that we are dependent on society and define ourselves based on the societies and groups we belong to. We learn from those around us, try to do what we understand to be in our best interest, and navigate a complicated course between societal expectations and our self-interest. Just as we can’t classify ourselves into imagined dichotomies, we cannot do so with others. Social learning and risk aversion give us a window into the complexity that we smooth over when we try to categorize ourselves or others into simple dichotomies.
The Results of Social Learning

The Results of Social Learning

Posted on by jabittan
The results of Social learning are not always positive. We learn a lot from our friends, our culture, and the people around us that we are not always aware of. We are greatly influenced by what we see others doing and believing, and this includes the things we learn and come to believe as true facts about the world. This is easily demonstrated by polling the opinions of people who get their news from traditional news outlets relative to people who get their news from fringe sources with political biases. But it is also true in spaces you would not expect.

 

To describe problems in social learning results, Gerd Gigerezner in Risk Savvy writes, “All in all, social learning leads to a paradoxical result. In France, Germany, Italy, the United Kingdom, and the United States, doctors’ beliefs about diet and health – such as taking vitamin supplements or exercising – more closely resemble those of the general public in their country than of doctors in other countries.”

 

When it comes to general knowledge and an ability to distinguish between accurate information and fads, trends, or beliefs without evidence, we like to imagine that we are smart and capable of identifying the truth. We like to believe that our beliefs are based on reality, that we have carefully considered the facts, and that we hold our beliefs for good reason. We won’t admit that we believe the things we do because others hold those same beliefs, but as the doctor example above indicates, that is often the case. The Dartmouth Atlas Project shows differences across the USA in treatments for certain conditions and rates of diagnosis for different conditions. Some of that may be genetic and reflect real health differences across the country, but some of the differences reflect different treatment approach beliefs by doctors trained in and practicing in different regions of the country.

 

Social learning results are good when they bring people together in support of democratic norms or help people understand that sitting on a couch all day and eating pizza for dinner every night are unhealthy behaviors. However, social learning results can be negative when doctor’s group around wasteful medical practices. The results of social learning can also just be random and strange, such as when people fall into fad diets or exercise programs that have no discernable health benefits or harms. What we should take away from Gigerenzer’s quote is that our knowledge is not always as rock solid and evidence based as we would believe. We should be honest with ourselves and make an effort to investigate whether our beliefs are based on real evidence or based on the people in our social groups who happen to hold the same beliefs. Perhaps our beliefs are still justifiable after strict scrutiny, but perhaps some beliefs can be let go when we see they are based on little more than the opinions and feelings of people around us.
The Social Imitation of Fear

The Social Imitation of Fear

Posted on by jabittan
“Why do people fear different things?” asks Gerd Gigerenzer in his book Risk Savvy. Many Americans are afraid of clowns, actor Kevin Hart is afraid of basically all bugs and animals, and as Gigerenzer writes in his book, I (like most Americans) would be afraid to go pick mushrooms in the wild to eat for dinner. The social imitation of fear, Gigerenzer explains, is often at the heart of many of our phobias. Most Americans probably haven’t had a personal bad experience with creepy clowns, few of us have ever picked the wrong mushroom for dinner and died, and most of us probably haven’t had near lethal encounters with bugs or animals. It is easy to understand why a toddler who was chased or bit by a dog might be afraid of animals, but it is simply comical that Kevin Hart is afraid of harmless butterflies and mice.

 

Much of what we fear comes from social learning, picking up on what others fear, and learning to fear that thing ourselves. Gigerenzer explains that the social imitation of fear can be a benefit and serve as protection for us, but that it isn’t without its own costs. Regarding the psychology of our fear he writes, “Fear whatever your social group fears. This simple principle protects us when personal experience might be lethal. At the same time, it can also make us fear the wrong things.”

 

Fears that keep us away from the edge of dangerous cliffs or keep us away from people with dangerous weapons can save our life. We can’t afford to learn to fear something lethal from experience – if you fall from a 100 foot cliff you won’t have a chance to learn to be more careful in the future. Fearing dangerous cliffs because everyone else in your tribe fears cliffs is a safer option.

 

However, this does lead us to fears that are unreasonable. It is very unlikely that any of us will be murdered by a creepy clown in the dead of night. However, a few years back pranksters started standing on street corners dressed as creepy clowns, and they scared lots of people across the country. I know people who had nightmares and were very frightened by the thought of these clowns, and were terrified of even the prospect of seeing a creepy clown on the street corner. Horror movies and common discussions of clown fears prime us to be afraid when there is no threat to us, and no real reason to be afraid. The social imitation of fear which helped our ancestors learn and survive together from the experiences of others, has been hijacked by horror movies and pranksters to create fear and anxiety for no meaningful reason.
Procedure Over Performance

Procedure Over Performance

Posted on by jabittan
My wife works with families with children with disabilities for a state agency. She and I often have discussions about some of the administrative challenges and frustrations with her job, and some of the creative ways that she and other members of her agency are able to bend the rules to meet the human needs of the job, even though their decisions occasionally step beyond management decisions for standard operating procedures. For my wife and her colleagues below the management level of the agency, helping families and doing what is best for children is the motivation for all of their decisions, however, for the management team within the agency, avoiding errors and blame often seems to be the more important goal.

 

This disconnect between agency functions, mission, and procedures is not unique to my wife’s state agency. It is a challenge that Max Weber wrote about in the late 1800’s and early 1900’s. Somewhere along the line, public agencies and private companies seem to forget their mission. Procedure becomes more important than performance, and services or products suffer.

 

Gerd Gigerenzer offers an explanation for why this happens in his book Risk Savvy. Negative error cultures likely contribute to people becoming more focused on procedure over performance, because following perfect procedure is safe, even if it isn’t always necessary and doesn’t always lead to the best outcomes. A failure to accept risk and errors, and a failure to discuss and learn from errors, leads people to avoid situations where they could be blamed for failure. Gigerenzer writes, “People need to be encouraged to talk about errors and take the responsibility in order to learn and achieve better overall performance.”

 

As companies and government agencies age, their workforce ages. People become comfortable in their role, they don’t want to have to look for a new job, they take out mortgages, have kids, and send them to college. People become more conservative and risk averse as they have more to lose, and that means they are less likely to take risks in their career, because they don’t want to lose their income to support their lifestyles, retirements, or the college plans for their kids. Following procedures, like getting meaningless forms submitted on time and documenting conversations timely, become more important than actually ensuring valuable services or products are provided to constituents and customers. Procedure prospers over performance, and the agency or company as a whole suffers. Positive error cultures, where it is ok to take reasonable risks and acceptable to discuss errors without fear of blame are important for overcoming the stagnation that can arise when procedure becomes more important than the mission of the agency or company.
Positive Error Cultures - Joe Abittan

Positive Error Cultures

Posted on by jabittan
My last post was about negative error cultures and the harm they can create. Today is about the flip side, positive error cultures and how they can help encourage innovation, channel creativity, and help people learn to improve their decision-making. “On the other end of the spectrum,” writes Gerd Gigerenzer in Risk Savvy, “are positive error cultures, that make errors transparent, encourage good errors, and learn from bad errors to create a safe environment.”

 

No one likes to make errors. Whether it is a small error on our personal finances or a major error on the job, we would all rather hide our mistakes from others. In school we probably all had the experience of quickly stuffing away a test that received a bad grade so that no one could see how many questions we got wrong. Errors in life have the same feeling, but like mistakes on homework, reports, or tests, hiding our errors doesn’t help us learn for the future. In school, reviewing our mistakes and being willing to work through them helps us better understand the material and shows us where we need to study for the final exam. In life, learning from our mistakes helps us become better people, make smarter decisions, and be more prepared for future opportunities.

 

This is why positive error cultures are so important. If we are trying to do something new, innovative, and important, then we are probably going to be in a position where we will make mistakes. If we are new homeowners and don’t know exactly how to tackle a project, we will certainly err, but by learning from our mistakes, we can improve and better handle similar home improvement projects in the future. Hiding our error will likely lead to greater costs in the future, and will leave us dependent on others to do costly work around the house. Business is the same way. If we want to grow to get a promotion or want to do something innovative to solve a new problem, we are going to make mistakes. Acknowledging where we were wrong and why we made an error helps us prepare for future challenges and opportunities. It helps us learn and grow rather than remaining stuck in one place, not solving any problems and not preparing for future opportunities.

 

80,000 Hours has a great “Our Mistakes” section on their website, demonstrating a positive error culture.
Negative Error Cultures - Joe Abittan

Negative Error Cultures

Posted on by jabittan
No matter how smart, observant, and rational we are, we will never have perfect information for all of the choices we make in our lives. There will always be decisions that we have to make based on a limited set of information, and when that happens, there will be a risk that we won’t make the right decision. In reality, there is risk in almost any decision we make, because there are very few choices where we have perfect information and fully understand all the potential consequences of our decisions and actions. This means the chance for errors is huge, and we will make many mistakes throughout our lives. How our cultures respond to these errors is important in determining how we move forward from them.

 

In Risk Savvy, Gerd Gigerenzer writes the following about negative error cultures:

 

“On the one end of the spectrum are negative error cultures. People living in such a culture fear to make errors of any kind, good or bad, and, if an error does occur, they do everything to hide it. Such a culture has little chance to learn from errors and discover new opportunities.”

 

None of us want to live in a world with errors, but the reality is that we spend a lot of our time engulfed by them. We don’t want to make mistakes on the job and potentially lose a raise, promotion, or employment altogether. Many people belong to religious social communities or live in families characterized by negative error cultures where any social misstep feels like the end of the world and poses expulsion from the community/family. Additionally, our world of politics is typically a negative error culture, where one political slip-up is often enough to irrevocably damage an individual’s political career.

 

Gigerenzer encourages us move away from negative error cultures because they stifle learning, reduce creativity, and fail to acknowledge the reality that our world is inherently a world of risk. We cannot avoid all risk because we cannot be all-knowing, and that means we will make mistakes. We can try to minimize the mistakes we make and their consequences, but we can only do so by acknowledging mistakes, owning up to them, learning, adapting, and improving future decision making.

 

Negative error cultures don’t expose mistakes and do not learn from them. They prevent individuals and organizations from finding the root cause of an error, and don’t allow for changes and adaptation. What is worse, efforts to hid errors can lead to more errors. Describing hospitals with negative error cultures, Gigerenzer writes, “zero tolerance for talking about errors produces more errors and less patient safety.” Being afraid to ever make a mistake makes us less willing to innovate, to learn, and to improve the world around us. It isolates us, and keeps us from improving and reducing risk for ourselves and others in the future. In the end, negative error cultures drive more of the thing they fear, reinforcing a vicious cycle of errors, secrecy, and more errors.
Informed Bets

Informed Bets

Posted on by jabittan
My last post was about limitations of the human mind and why we should be willing to doubt our conclusions and beliefs. This post contrasts my last post to argue that we can trust the informed bets that our brains make. Our brains and bodies do not have the capabilities to fully capture all of the information necessary to perfectly replicate reality in our minds, but they can do a good job putting information together in a way that helps us successfully navigate the world and our lives. Informed guesses, that is assumptions and intuitions based on experience and expertise rather than random and amateurish judgements, are actually very useful and often good approximations.

 

“Intelligence…” Gerd Gigerenzer writes in his book Risk Savvy, “is the art of making informed guesses.” Our brains make a lot of predictions and rely on heuristics, assumptions, and guesses to get by. It turns out that our brains do this well, as Gigerenzer argues in his book. We don’t need to pull out graph paper and a scientific calculator to catch a football. We don’t need to record every thought and action we have had over the last month to know if we are happy with our New Year’s resolutions and can keep them going. When we see someone standing in a long customer service line at the grocery store we don’t need to approach them with a 100 point questionnaire to know whether they are bored or upset.  Informed bets and reasonable guesses are sufficient for us to have decent and functional understanding of the world.

 

Gigerenzer continues, “Intelligence means going beyond the information given and making informed bets on what’s outside.” This quote is introduced after an optical illusion, where a grayscale checkerboard is shown with a figure casting a shadow across the board. Two squares on the board are the same shade of gray, yet our minds see the squares as different colors. Our minds are going beyond the information given, the literal wavelength of light reaching the back of our eyes, and making informed bets on the relative colors of the squares on the board if there was not a figure to cast a shadow. In the case of the visual illusion, our brain’s guess about reality is actually more helpful for us than the literal reality of the same colors of the squares in the image.

 

Bounded rationality is a serious concern. We cannot absorb all the information that exists in the world which may help us make better decisions. However, humans are intelligent. We can use the information we receive and make informed bets about the best choices and decisions available. We might not be perfect, but by making informed bets and educated guesses we can successfully come to understand the world and create systems and structures that help us improve our understanding over time.
Our Brains Are Not Mirrors

Our Brains Are Not Mirrors

Posted on by jabittan
Humans are social creatures who need to interact for survival and meaning. Being part of a society requires that we take actions, behave in conjunction with others, make decisions, and have opinions about the world we inhabit. This puts us in difficult positions. We have to justify our decisions, actions, behaviors, and beliefs, but our brains are not mirrors of reality. They don’t reflect a perfect and objective view of the world to our inner mind, and we don’t always realize how imperfect the information we act on can be.

 

In Risk Savvy, Gerd Gigerenzer writes, “When we look around us, we think we perceive the world outside. But we don’t. Our brains are not mirrors. They have insufficient information to mirror the world.” We only perceive a limited slice of reality. We only absorb and process a limited amount of information. Our understanding of the true nature of reality can never be complete enough to say we truly understand the world.

 

In my opinion, this should lead us to be more cognitively humble. We should recognize that we can’t know everything and be more willing to question what we know, how we know what we know, and what we don’t and cannot ever know. In reality, few of us do this on a consistent basis. It is uncomfortable to live with uncertainty and a constant doubt that you know enough to take decisive action, to behave a certain way, or to hold certain beliefs. It is far more comfortable to believe that you know how and why the world is the way it is.

 

Ultimately, because we are social creatures and because we need to interact for our survival, we have to make decisions. We cannot question our decisions forever, or we would never get out of bed and would starve. We have to take action but this doesn’t mean we have to behave as though we know everything. We can still make it through life recognizing that we rely on rules of thumb, heuristics, and judgements based on imperfect information. We can question what we know and be willing to update our beliefs when we have reason to change our minds. It is important that we think critically about what we believe, and avoid simply believing that things are good or right because we happen to benefit from them now. Those instances are precisely the time when we should be the most willing to question our beliefs. Our brains are not mirrors, they don’t tell us exactly what is, and we should remember that and be willing to make changes in our thoughts, beliefs, and actions based on continual learning.
Risk and Innovation - Joe Abittan

Risk and Innovation

Posted on by jabittan
To be innovative is to make decisions, develop processes, and create things in new ways that improve over the status quo. Being innovative is necessarily different, and requires stepping away from the proven path to do something new or unusual. Risk and innovation are tied together because you cannot venture into something new or stray from the tried and true without the possibility of making a mistake and being wrong. Therefore, appropriately managing and understanding risk is imperative for innovation.

 

In Risk Savvy Gerd Gigerenzer writes, “Risk aversion is closely tied to the anxiety of making errors. If you work in the middle management of a company, your life probably revolves around the fear of doing something wrong and being blamed for it. Such a climate is not a good one for innovation, because originality requires taking risks and making errors along the way. No risks, no errors, no innovation.” Risk aversion is a fundamental aspect of human psychology. Daniel Kahneman in Thinking Fast and Slow shows that we won’t accept risk unless we are certain that the pay-off is at generally about two times greater than the potential loss. We go out of our way to avoid risk, because the potential of losing something is often paralyzing beyond the excitement of a potential gain. Individuals and companies who want to be innovative have to find ways around risk aversion in order to create something new.

 

Gigerenzer’s example of middle management is excellent for thinking about innovation and why it is often smaller companies and start-ups that make innovative breakthroughs. It also helps explain why in the United States so many successful and innovative companies are started by immigrants or by the super-wealthy. Large established companies are likely to have employees who have been with the company for a longer time and have become more risk averse. They have families, mortgages, and might be unsure they could find an equally attractive job elsewhere. Their incentives for innovation are diminished by their fear of loss if something where to go wrong and if the blame were to fall with them. Better to stick with established methods and to maximize according to well defined job evaluation statistics than to risk trying something new and uncharted. Start-ups, immigrants, and the super-wealthy don’t have the same constraining fears. New companies attract individuals who are less risk averse to begin with, and they don’t have established methods that everyone is comfortable sticking to. Immigrants are not as likely to have the same financial resources that limit their willingness to take risks, and the super-wealthy may have so many resources that the risks they face are smaller relative to their overall wealth and resources. The middle-class, like middle management, is stuck in a position where they feel they have too much to risk in trying to be innovative, and as a result stick to known and measured paths that ultimately reduce risk and innovation.