Archive for June, 2005
Risk aversion and making suboptimal decisions is hard wired into our evolutionary biology. This seems to be the finding of tests on Simian monkeys and their responses to a variety of reward systems.
Essentially, just like humans, the monkeys demonstrate a preference for avoiding loss over the prospect of an extra gain. MRI scans have shown that we compute losses and gains in different parts of the brain, so the latest tests on monkeys revealing they too have a loss aversion suggests some older biological need is being answered.
The Economist reasons that in our natural habitat food supply is erratic, so that the pangs of hunger are felt more keenly than the prospect of abundance. While agriculture and the affluent society have changed all that on the “supply side”, we retain the attitudes of the hunter-gatherer.
In an information society, it becomes much more important to understand these biological drivers and the biases they build into our evaluation processes.
Experience suggests these features of human behaviour are better understood by marketers than economists. As has been observed before, they know the power of the statement “Hurry, while stocks last!”Donate and help me buy back my Fender ('About' tells you why) Tags: behavioural-economics, evolutionary-biology, evolutionary_biology, loss_aversion, mri_scans, not-that-im-biased, risk_aversion
Tweet They say that all work and no play makes Jack a dull boy. That the Blackberry portable email device was invented and promoted to reduce wasted “down-time” suggests that carrying one may be injurious, if not to health, certainly to a rounded personality, given what we know about the physical and mental requirement for […]
Tweet Tim Henman is a failure. This must be rather disappointing for him, and for anyone else who might nurture ambitions to be within the top 10 in any field in the world. We live in a winner takes all society. Henman’s loss of acclaim reflects his failure yet to bag a Wimbledon title–the only […]
Conditional probability is not an expression that most people will grasp these days, but the need to understand it is growing.
The current case of the UK’s General Medical Council against Professor Roy Meadows hinges on this arcane statistical concept. That a senior medical figure is accused in a professional court for the misuse of statistics makes this a very modern “crime” indeed. But it is one to which we will no doubt return again and again in future, because very few journalists, let alone the average citizen, are very well equipped to deal with the odds of something happening, let alone when the odds of that something are conditional in some way. We tend to get confused.
Professor Meadow’s evidence led to the conviction of a number of women for killing their children. Notably he argued that there was a one in 73 million chance that both of one woman’s children could have died of natural causes. She ended up in jail. The truth is the opposite. That one child should die is unfortunate and highly unusual, but the likelihood of another dying is increased not decreased. It is in the genes. The two deaths are not necessarily independent, so the chances of lightning striking twice are not less but greater.
H. G. Wells, the father of modern science fiction, argued that “statistical thinking will one day be as necessary for efficient citizenship as the ability to read or write.” With the decline in maths teaching in UK schools in the past four years, the outlook is scarcely promising.
To see a much earlier examination of the issue click here.Donate and help me buy back my Fender ('About' tells you why) Tags: black swans, conditional_probability, h_g_wells, life-the-universe-and-everything, luck, misuse_of_statistics, not-that-im-biased, Professor_Roy_Meadows
The latest story on the threat of superbug infections in UK hospitals highlights how risk-reducing technology, in this case antibiotics, shifts a problem over the long term and at the same time creates a behavioural change offsetting the benefits the technological innovation offers. It is the Volvo syndrome. The driver with a safer car, or who wears a seatbelt or crash helmet, drives faster or more dangerously reintroducing the risk his safety equipment has removed.
The reports today show how hygiene standards have fallen over the past generation. It seems that antibiotics may have played two roles in the superbug problem. They reduced the need in the short-term for old fashioned devotion to cleanliness (arduous, time consuming, and therefore expensive). At the same time, their widespread and often indiscriminate use over the long term has reduced both their overall effectiveness, while allowing for the creation of much stronger bacterial organisms.
The Volvo syndrome is nothing new. But in any discussions of risk, it should be invoked whenever we are encouraged to take our eye of the ball, because someone else, or some piece of technology is there to facilitate this. Very often, decisions are made on the basis of cost and backside covering, so are very short term.Donate and help me buy back my Fender ('About' tells you why) Tags: behavioural-economics, evolutionary-biology, not-that-im-biased