Aspiration Rules

Aspiration Rules

Posted on by jabittan
My last post was all about satisficing, making decisions based on alternatives that satisfy our wants and needs and that are good enough, but may not be the absolute best option. Satisficing contrasts the idea of maximizing. When we maximize, we find the best alternative from which no additional Pareto efficiencies can be gained. Maximizing is certainly a great goal in theory, but in practice, maximizing can be worse than satisficing. As Gerd Gigerenzer writes in Risk Savvy, “in an uncertain world, there is no way to find the best.” Satisficing and using aspiration rules, he argues, is the best way to make decisions and navigate our complex world.

 

“Studies indicate that people who rely on aspiration rules tend to be more optimistic and have higher self-esteem than maximizers. The latter excel in perfectionism, depression, and self-blame,” Gigerenzer writes. Aspiration rules differ from maximizing because the goal is not to find the absolute best alternative, but to find an alternative that meets basic pre-defined and reasonable criteria. Gigerenzer uses the example of buying pants in his book.  A maximizer may spend the entire day going from store to store, checking all their options, trying every pair of pants, and comparing prices at each store until they have found the absolute best pair available for the lowest cost and best fit. However, at the end of the day, they won’t truly know that they found the best option, there will always be the possibility that they missed a store or missed a deal someplace else. To contrast a maximizer, an aspirational shopper would go into a store looking for a certain style at a certain price. If they found a pair of pants that fit right and was within the right price range, then they could be satisfied and make a purchase without having to check every store and without having to wonder if they could have gotten a better deal elsewhere. They had basic aspirations that they could reasonably meet to be satisfied.

 

Maximizers set unrealistic goals and expectations for themselves while those using aspiration rules are able to set more reasonable, achievable goals. This demonstrates the power and utility of satisficing. Decisions have to be made, otherwise we will be wandering around without pants as we try to find the best possible deal. We will forego opportunities to get lunch, meet up with friends, and do whatever it is we need pants to go do. This idea is not limited to pants and individuals. Businesses, institutions, and nations all have to make decisions in complex environments. Maximizing can be a path toward paralysis, toward CYA behaviors (cover your ass), and toward long-term failure. Start-ups that can satisfice and make quick business decisions and changes can unseat the giant that attempts to maximize every decision. Nations focused on maximizing every public policy decision may never actually achieve anything, leading to civil unrest and a loss of support. Institutions that can’t satisfice also fail to meet their goals and missions. Allowing ourselves and our larger institutions to set aspiration rules and satisfice, all while working to incrementally improve with each step, is a good way to actually move toward progress, even if it doesn’t feel like we are getting the best deal in any given decision.

 

The aspiration rules we use can still be high, demanding of great performance, and drive us toward excellence. Another key difference, however, between the use of aspiration rules and maximizing is that aspiration rules can be more personalized and tailored to the realistic circumstances that we find ourselves within. That means we can create SMART goals for ourselves by using aspiration rules. Specific, measurable, achievable, realistic, and time-bound goals have more in common with a satisficing mentality than goals that align with maximizing strategies. Maximizing doesn’t recognize our constraints and challenges, and may leave us feeling inadequate when we don’t become president, don’t have a larger house than our neighbors, and are not a famous celebrity. Aspiration rules on the other hand can help us set goals that we can realistically achieve within reasonable timeframes, helping us grow and actually reach our goals.
Satisficing

Satisficing

Posted on by jabittan
Satisficing gets a bad wrap, but it isn’t actually that bad of a way to make decisions and it realistically accommodates the constraints and challenges that decision-makers in the real world face. None of us would like admit when we are satisficing, but the reality is that we are happy to satisfice all the time, and we are often happy with the results.

 

In Risk Savvy, Gerd Gigerenzer recommends satisficing when trying to chose what to order at a restaurant. Regarding this strategy for ordering, he writes:

 

“Satisficing: This … means to choose the first option that is satisfactory; that is, good enough. You need the menu for this rule. First, you pick a category (say, fish). Then you read the first item in this category, and decide whether it is good enough. If yes, you close the menu and order that dish without reading any further.”

 

Satisficing works because we often have more possibilities than we have time to carefully weigh and consider. If you have never been to the Cheesecake Factory, reading each option on the menu for the first time would probably take you close to 30 minutes. If you are eating on your own and don’t have any time constraints, then sure, read the whole menu, but the staff will probably be annoyed with you. If you are out with friends or on a date, you probably don’t want to take 30 minutes to order, and you will feel pressured to make a choice relatively quickly without having full knowledge and information regarding all your options. Satisficing helps you make a selection that you can be relatively confident you will be happy with given some constraints on your decision-making.

 

The term satisficing was coined by the Nobel Prize winning political scientist and economist Herbert Simon, and I remember hearing a story from a professor of mine about his decision to remain at Carnegie Melon University in Pittsburgh. When asked why he hadn’t taken a position at Harvard or a more prestigious Ivy League School, Simon replied that his wife was happy in Pittsburgh and while Carnegie Melon wasn’t as renown as Harvard it was still a good school and still offered him enough of what he wanted to remain. In other words, Carnegie Melon satisfied his basic needs and satisfied criteria in enough areas to make him happy, even though a school like Harvard would have maximized his prestige and influence. Simon was satisficing.

 

Without always recognizing it, we turn to satisficing for many of our decisions. We often can’t buy the perfect home (because of timing, price, and other bidders), so we satisfice and buy the first home we can get a good offer on that meets enough of our desires (but doesn’t fit all our desires perfectly). The same goes for jobs, cars, where we are going to get take-out, what movie we want to rent, what new clothes to buy, and more. Carefully analyzing every potential decision we have to make can be frustrating and exhausting. We will constantly doubt whether we made the best choice, and we may be too paralyzed to even make a decision in the first place. If we satisfice, however, we accept that we are not making the best choice but are instead making an adequate choice that satisfies the greatest number of our needs while simplifying the choice we have to make. We can live with what we get and move on without the constant doubt and loss of time that we might otherwise experience. Satisficing, while getting a bad rep from those who favor rationality in all instances, is actually a pretty good decision-making heuristic.
A Leadership Personality

A Leadership Personality

Posted on by jabittan
I find personality trait tests misleading. I know they are used by companies in hiring decisions and I know that Big 5 Personality Traits have been shown to predict political party support, but I still feel that they are misapplied and misunderstood. Specifically, I think that the way we interpret them fails to take context into consideration, which may make them next to useless. Gerd Gigerenzer considers this lapse in our judgement when thinking about the way we discuss and evaluate leadership personalities.

 

In Risk Savvy he writes, “leadership lies in the match between person and environment, which is why there is no single personality that would be a successful leader at all historical times and for all problems to solve.” A military general might make a great leader on the battlefield, but they may not be a great leader in a public education setting. A surgeon leading a hospital during the times of the American Civil War might not make a good leader at Columbia University Medical Center today, and the leader who thrives at a prestigious New York City medical center might not make a great leader at Northeastern Nevada Regional Hospital. Leadership is in many ways context dependent. The problems that a leader has to address may call for different approaches and solutions, which may be supported or sabotaged by particular personality types. Someone who is an outgoing socialite may be the right type of leader in New York City, but might be bored in Rural Nevada and may come across as overbearing to those who prefer a rural lifestyle. What Gigerenzer suggests may be the most important quality for a leader is not some form of leadership personality, but the right experiences and the right ability to apply particular rules of thumb and intuition to a given problem.

 

If the appropriate leadership personality is so context dependent, it may also be worth asking if our personality in general is context dependent. I have not studied personality and personality tests deeply enough to have any true evidence to back me up, but I would expect it to be. Dan Pink in When shows that we are the most productive and have the most positive mood about 4 hours after waking, and have the least amount of energy and worst mood around mid day (or 8 to 10 hours after we wake up). It seems to me that my performance on a personality test would be different if I was taking it at the peak of my day versus during the deepest trough. Also, I would expect my personality to manifest differently in an online multiple choice test relative to an unexpected car emergency, or during a game of cards with my old high school best friends. To say that I have one personality that shines through in all situations seems misleading, and to say that I have a particular level of any given personality trait that remains constant through the day and from experience to experience also seems misleading.

 

Gigerenzer’s quote above is about leadership and the idea that there is no single personality trait that applies to good leaders. I think it is reasonable to extend that assumption to personality generally, assuming that our personality is context dependent and being successful as individuals also involves rules of thumb based on experiences. What is important then is to develop and cultivate experiences and rules of thumb that can guide us toward success. Incorporating goals, feedback, and tools to help us recall successful approaches and strategies within a given context can help us become leaders and can help us succeed regardless of what a personality test tells us and regardless of the context we find ourselves in.
A Leader's Toolbox

A Leader’s Toolbox

Posted on by jabittan
In the book Risk Savvy Gerd Gigerenzer describes the work of top executives within companies as being inherently intuitive. Executives and managers within high performing companies are constantly pressed for time. There are more decisions, more incoming items that need attention, and more things to work on than any executive or manager can adequately handle on their own. Consequentially, delegation is necessary, as is quick decision-making based on intuition. “Senior managers routinely need to make decisions or delegate decisions in an instant after brief consultation and under high uncertainty,” writes Gigerenzer. This combination of quick decision-making under uncertainty is where intuition comes to play, and the ability to navigate these situations is what truly comprises the leader’s toolbox.

 

Gigerenzer stresses that the intuitions developed by top managers and executives are not arbitrary. Successful managers and companies tend to develop similar tool boxes that help encourage trust and innovation. While many individual level decisions are intuitive, the structure of the leader’s toolbox often becomes visible and intentional. As an example, Gigerenzer highlights a line of thinking he uncovered when working on a previous book. He writes, “hire well and let them do their jobs reflects a vision of an institution where quality control (hire well) goes together with a climate of trust (let them do their jobs) needed for cutting-edge innovation.”

 

In many companies and industries, the work to be done is incredibly complex, and a single individual cannot manage every decision. The structure of the decision-making process necessarily needs to be decentralized for the individual units of the team to work effectively and efficiently. Hiring talented individuals and providing them with the autonomy and tools necessary to be successful is the best approach to get the right work done well.

 

Gigerenzer continues, “Good leadership consists of a toolbox full of rules of thumb and the intuitive ability to quickly see which rule is appropriate in which context.”

 

A leader’s toolbox doesn’t consist of specific lists of what to do in certain situations or even specific skills that are easy to check off on a resume. A leader’s toolbox is built by experience in a diverse range of settings and intuitions about things as diverse as hiring, teamwork, and delegation. Because innovation is always uncertain and always includes risk, leaders must develop intuitive skills and be able to make quick and accurate judgements about how to best handle new challenges and obstacles. Intuition and gut-decisions are an essential part of leadership today, even if we don’t like to admit that we make important decisions on intuition.
Gut Decisions

Gut Decisions

Posted on by jabittan
“Although about half of professional decisions in large companies are gut decisions, it would probably not go over well if a manager publicly admitted, I had a hunch. In our society, intuition is suspicious. For that reason, managers typically hide their intuitions or have even stopped listening to them,” Gerd Gigerenzer writes in Risk Savvy.

 

The human mind evolved first in small tribal bands trying to survive in a dangerous world. As our tribes grew, our minds evolved to become more politically savvy, learning to intuitively hide our selfish ambitions and appear honest and altruistic. This pushed our brains toward more complex activity, which took place outside our direct consciousness, hiding in gut feelings and intuitions. Today however, we don’t trust those intuitions and gut decisions, even though they never left us.

 

We do have good reason to discount intuitions. Our minds did not evolve to serve us perfectly in a complex, data rich world full of uncertainty. Our brains are plagued by motivated reasoning, biases, and cognitive limitations. Making gut decisions can lead us vulnerable to these mental challenges, leading us to distrust our intuitions.

 

However, this doesn’t mean we have escaped gut decisions. Gerd Gigerenzer thinks that is actually a good thing, especially if we have developed years of insight and expertise through practice and real life training. What Gigerenzer argues is that we still make many gut decisions in areas as diverse as vacation planning, daily exercise, and corporate strategies. We just don’t admit we are making decisions based on intuition rather than careful statistical analysis. Taking it a step further, Gigerezner suggests that most of the time we make a decision at a gut level, and “produce reasons after the fact.” We rationalize and use motivated reasoning to explain why we made a decision and we try to deceive ourselves to believe that we always intended to do the rational calculation first, and that we really hadn’t made up our mind until after we had done so.

 

Gigerenzer suggests that we acknowledge our gut decisions. Ignoring them and pretending they are not influential wastes our time and costs us money. An executive may have an intuitive sense of what to do in terms of a business decision, but may be reluctant to say they made a decision based on intuition. Instead, they spend time doing an analysis that didn’t need to be done. They create reasons to support their decision after the fact, again wasting time and energy that could go into implementing the decision that has already been made. Or an executive may bring in a consulting firm, hoping the firm will come up with the same answer that they got from their gut. Time and money are both wasted, and the decision-making and action-taking structures of the individual and organization are gummed up unnecessarily. Acknowledging gut decisions and moving forward more quickly, Gigerenzer seems to suggest, is better than rationalizing and finding support for gut decisions after the fact.
A Bias Toward Complexity

A Bias Toward Complexity

Posted on by jabittan
When making predictions or decisions in the real world where there are many variables, high levels of uncertainty, and numerous alternative options to chose from, using a simple rule of thumb can be better than developing complex models for predictions. The intuitive sense is that the more complex our model the more accurately it will reflect the real complexity of the world, and the better job it will do with making a prediction. If we can see that there are multiple variables, then shouldn’t our model capture the different alternatives for each of those variables? Wouldn’t a simple rule of thumb necessarily flatten many of the alternatives for those variables, failing to take into consideration the different possibilities that exist? Shouldn’t a more complex model be better than a simple heuristic?

 

The answer to these questions is no. We are biased toward complexity for numerous reasons. It feels important to build a model that tries to account for every possible alternative for each variable, we believe that always having more information is always good, and we want to impress people by showing how thoughtful and considerate we are. Creating a model that accounts for all the different possibilities out there fits those preexisting biases. The problem, however, is that as we make our model more complex it becomes more unstable.

 

In Risk Savvy, Gerd Gigerenzer explains what happens with variance and our models by writing, “Unlike 1/N, complex methods use past observations to predict the future. These predictions will depend on the specific sample of observations it uses and may therefore be unstable. This instability (the variability of these predictions around their mean) is called variance. Thus, the more complex the method, the more factors need to be estimated, and the higher the amount of error due to variance.”  (Emphasis added by me – 1/N is an example of a simple heuristic that Gigerenzer explains in the book.)

 

Our bias toward complexity can make our models and predictions worse when high levels of uncertainty with many alternatives and relatively limited amounts of data exist. If we find ourselves in the opposite situation, where there is low uncertainty, few alternatives, and a plethora of data, then we can use very complex models to make accurate predictions. But when we are in the real world, like making stock market or March Madness predictions, then we should rely on a simple rule of thumb. The more complex our model, the more opportunities for us to misestimate a given variable. Rather than having one error be offset by numerous other point estimates within our model to reduce the cost of a miscalculation, our model ends up creating more variance and a greater likelihood that our prediction will be further from reality than if we had flattened the variables with a simple heuristic.
Defensive Decision-Making - Joe Abittan

Defensive Decision-Making

Posted on by jabittan
One of the downfalls of a negative error cultures is that people become defensive over any mistake they make. Errors and mistakes are shamed and people who commit errors do their best to hide them or deflect responsibility. Within negative error cultures you are more likely to see people taking steps to distance themselves from responsibility before a decision is made, practicing what is called defensive decision-making.

 

Gerd Gigerenzer expands on this idea is his book Risk Savvy by writing, “defensive decision making [is] practiced by individuals who waste time and money to protect themselves at the cost of others, including their companies. Fear of personal responsibility creates a market for worthless products delivered by high-paid experts.”

 

Specifically, Gigerenzer writes about companies that hire expensive outside experts and consultants to make market predictions and help improve company decision-making. The idea is that individual banks, corporations, and sales managers can’t accurately know the state of a market as well as an outside expert whose job it is to study trends, talk to market actors, and understand how the market relates to internal and external pressures. The problem, as Gigerenzer explains, is that even experts are not very good at predicting the future of a market. There is simply too much uncertainty for anyone to be able to say that market trends will continue, that a shock is coming, or that a certain product or service is about to take off. Experts make these types of predictions all the time, but evidence suggests that their predictions are not much better than just throwing dice.

 

So why do companies pay huge fees, sit through lengthy meetings, and spend time trying to understand and adapt to the predictions of experts? Gigerenzer suggests that it is because individuals within the company are practicing defensive decision-making. If you are a sales manager and you make a decision to sell to a particular market with a new approach after analyzing performance and trends of your own team, then you are responsible for the outcome of the new approach and strategy. If it works, you will look great, but if it fails, then you will be blamed for not understanding the market, for failing to see the signs that indicated your plan wasn’t going to succeed, and for misinterpreting past trends. However, if a consultant suggested a course of action, presented your team with a great visual presentation, and was certain that they understood the market, then you escape blame when the plan doesn’t work out. If even the expert couldn’t see what was going to happen, then how could you be blamed for a plan not working out?

 

Defensive decision-making is good for the individual, but bad for the larger organization that the individual is a part of. Companies would be better off if they made decisions quicker, accepted risk, and could openly evaluate success and failure without having to place too much blame on individuals. Companies could learn more about their errors and could do a better job identifying and promoting talent. Defensive decision-making is expensive, time consuming, and outsources blame, preventing companies and organizations from actually learning and improving their decision-making over the long run.
A Useful Myth

A Useful Myth

Posted on by jabittan
Autonomy, free will, and self-control combine to create a useful myth. The myth is that we control our own destinies, that we are autonomous actors with rights, freedoms, and the opportunity to improve our lives through our own effort. The reality is that the world is incredibly complex, that we don’t get to chose our genes, our parents, or the situations in life that we are born and raised within. A huge number of factors based on random chance and luck contribute to whether we are successful or not, but nevertheless, the belief that we are autonomous actors with control over our own free will is still a useful myth.

 

In Risk Savvy Gerd Gigerenzer writes, “people who report more internal control tend to fare better in life than those who don’t. They play a more active role in their communities, take better care of their health, and get better jobs. We may have no control about whether people find our clothes or skills or appearance attractive. But we do have control over internal goals such as acquiring languages, mastering a musical instrument, or taking responsibility for small children or our grandparents.”

 

This quote shows why the idea of internal control and agency is such a useful myth. If we believe we have the power to shape our lives for the better, then we seem to be more likely to work hard, persevere, and stretch for challenging goals. A feeling of helplessness, as though we don’t have control, likely leads to cynicism and defeatism. Why bother trying if you and your actions won’t determine the success or failure you experience in life?

 

This myth is at the heart of American meritocracy, but it is important to note that it does appear to be just a myth. EKGs can detect electrical activity in the brain and predict an action before a person becomes aware of a conscious desire to perform an action. Split brain experiments and the research of Kahneman and Tversky show that our brains are composed of multiple competing systems that almost amount to separate people and personalities all within our singular consciousness. And as I wrote earlier, luck is a huge determining factor in whether we have the skills and competencies for success, and whether we have a supportive environment and sufficient opportunities to master those skills.

 

Recently, on an episode of Rationally Speaking, Julia Galef interviewed Michael Sandel about our meritocracy. One fear that Sandel has about our system of meritocracy is that people who succeed by luck and chance believe that they succeeded because of special qualities or traits that they possess. Meanwhile, those who fail are viewed as having some sort of defect, a mindset that people who fail or live in poverty may come to believe is true and embrace, thus creating another avenue for defeatism to thrive.

 

If internal control is a useful myth, it is because it encourages action and flourishing for individuals. My solution therefore is to blend the two views, the view of internal agency and the view of external forces shaping the future we have. These are contradictory views on the surface, but I believe they can be combined and live in harmony (especially given the human ability to peacefully and ignorantly live with contradictory beliefs). We need to believe we have agency, but also believe that success is essentially a matter of luck and that we are dependent on society and others to reach great heights. This should encourage us to apply ourselves fully, but to be humble, and take steps to help ensure others can also apply themselves fully to reach greater levels of success. When people fail, we shouldn’t look at them as morally inept, as lacking skills and abilities, but as people who happened to end up in a difficult place. We should then take steps to help improve their situations and to give them more opportunities to find the space that fits their skills and abilities for growth and success. Internal control can still be a useful myth if we tie it to the right structures and systems to ensure everyone can use their agency appropriately and avoid the overwhelming crush of defeatism when things don’t go well.
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.
—
*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.