Irrationality

1. Human reasoning is prone to systematic errors and biases

Pace Aristotle, it can be argued that irrational behaviour is the norm not the exception.

Cognitive biases are pervasive. Our minds are not perfectly rational machines, but rather prone to a wide array of systematic errors and biases. These include the availability heuristic, where we overestimate the likelihood of events that are easily recalled, and the representativeness heuristic, where we judge the probability of something based on how closely it resembles our mental prototype.

Real-world consequences. These biases affect not just everyday decisions, but also critical judgments made by professionals. Doctors misdiagnose patients based on recent cases they've seen, judges hand down inconsistent sentences influenced by irrelevant factors, and business leaders make disastrous decisions based on overconfidence and neglect of statistical evidence.

Evolutionary roots. Many of these biases likely have evolutionary origins. Quick, intuitive judgments may have been advantageous for survival in our ancestral environment, even if they lead us astray in the modern world. Understanding these innate tendencies is the first step towards more rational thinking.

2. Our minds often rely on mental shortcuts that lead to flawed judgments

The mistake is made because there appears to be an element of order in the first two sequences: they seem not to be random because it is unusual to get runs of heads or tails from a series of tosses of a coin.

Heuristics: Mental shortcuts. Our brains use heuristics, or mental shortcuts, to make quick judgments and decisions. While these are often useful, they can lead to systematic errors in reasoning. For example, the availability heuristic causes us to overestimate the likelihood of events that are easily recalled or imagined.

Pattern-seeking minds. We have a strong tendency to see patterns and order, even where none exists. This leads to errors such as the gambler's fallacy, where people believe that past events influence the probability of future independent events.

Examples of common heuristics:

• Anchoring: Relying too heavily on the first piece of information encountered
• Representativeness: Judging probability by how closely something resembles our mental prototype
• Affect heuristic: Making decisions based on emotional reactions rather than careful analysis

3. Confirmation bias: We seek information that supports our existing beliefs

First, people consistently avoid exposing themselves to evidence that might disprove their beliefs. Second, on receiving evidence against their beliefs, they often refuse to believe it.

Selective exposure and interpretation. We have a strong tendency to seek out information that confirms our existing beliefs and to interpret ambiguous evidence as supporting our views. This confirmation bias leads to the reinforcement and polarization of beliefs, even in the face of contradictory evidence.

Resisting disconfirmation. When presented with evidence that challenges our beliefs, we often engage in motivated reasoning to discredit or dismiss that evidence. This can lead to the backfire effect, where attempts to correct misinformation actually strengthen the original false belief.

Overcoming confirmation bias:

• Actively seek out disconfirming evidence
• Consider alternative explanations and hypotheses
• Engage with people who hold different views
• Practice intellectual humility and be willing to change your mind

4. The power of social influence: Conformity and obedience shape our actions

Obedience to authority is instilled in us from birth – obedience to our parents, to our teachers, to our bosses and to the law.

Conformity pressures. Humans have a strong drive to conform to social norms and the opinions of others. This can lead to irrational behavior, as demonstrated by classic experiments like Asch's line judgment study, where participants conformed to clearly incorrect judgments made by confederates.

Obedience to authority. Milgram's famous obedience experiments revealed how readily people will follow orders from perceived authority figures, even when those orders conflict with their personal moral beliefs. This tendency can lead to atrocities when combined with authoritarian systems.

Mitigating social influence:

• Cultivate independent thinking and moral courage
• Be aware of groupthink and actively encourage dissenting opinions
• Question authority and evaluate orders based on ethical principles
• Create systems with checks and balances to prevent abuse of power

5. Overconfidence: We consistently overestimate our abilities and knowledge

When they were 100 per cent confident of their spelling, they spelled the word correctly only 80 per cent of the time.

Illusion of knowledge. People consistently overestimate their knowledge and abilities across a wide range of domains. This overconfidence effect leads to poor decision-making, as we fail to adequately account for our limitations and the possibility of error.

Dunning-Kruger effect. This cognitive bias causes people with limited knowledge or expertise to overestimate their abilities, while experts tend to underestimate their abilities relative to others. This can lead to dangerous situations where the least competent are the most confident.

Combating overconfidence:

• Regularly test your knowledge and seek feedback
• Practice intellectual humility and acknowledge uncertainty
• Use structured decision-making processes to counteract bias
• Seek out diverse perspectives and expert opinions

6. Emotions and stress significantly impair rational decision-making

Not only do people hold irrational beliefs about the frequency of violence, but they are driven by their beliefs to wholly irrational actions.

Emotional interference. Strong emotions like fear, anger, and excitement can override rational thought processes, leading to impulsive and often regrettable decisions. This is particularly problematic in high-stakes situations that naturally evoke strong emotions.

Stress and cognitive load. When under stress or cognitive load, our ability to think critically and make sound judgments is significantly impaired. This can lead to a reliance on simplistic heuristics and gut reactions rather than careful analysis.

Strategies for emotional regulation:

• Practice mindfulness and emotional awareness
• Use techniques like "cognitive reappraisal" to change emotional responses
• When possible, delay important decisions until you're in a calm state
• Develop stress-management techniques to maintain cognitive function under pressure

7. Intuition often fails us: Statistical thinking yields better results

Out of more than a hundred studies comparing the accuracy of actuarial and intuitive prediction, in not one instance have people done better, though occasionally there has been no difference between the two methods.

Limitations of intuition. While intuition can be valuable in certain contexts, it often leads us astray when dealing with complex problems or large amounts of data. Our intuitions are shaped by personal experience and cognitive biases, which can result in poor judgments.

Power of statistical methods. Across a wide range of domains, from medical diagnosis to employee selection, statistical models consistently outperform human experts in making predictions and decisions. This is because they can systematically incorporate large amounts of data and avoid common cognitive biases.

Improving decision-making:

• Learn basic statistical concepts and probability theory
• Use structured, quantitative methods for important decisions
• Be aware of the limitations of intuition and personal experience
• Combine intuition with data-driven analysis for optimal results

8. The sunk cost fallacy: Difficulty in cutting losses and moving on

No matter how much time, effort or money you have invested in a project, cut your losses if investing more will not be beneficial.

Irrational persistence. The sunk cost fallacy leads people to continue investing in failing courses of action simply because they've already invested resources. This results in throwing good money (or time, effort) after bad.

Psychological factors. Several psychological factors contribute to the sunk cost fallacy:

• Loss aversion: We feel losses more strongly than equivalent gains
• Commitment and consistency: Desire to appear consistent with past decisions
• Ego protection: Admitting a mistake can be psychologically painful

Overcoming sunk costs:

• Focus on future costs and benefits, not past investments
• Practice mental accounting: Treat past costs as irrecoverable
• Reframe decisions: Consider opportunity costs of continuing
• Cultivate a growth mindset that views failures as learning opportunities

9. Misunderstanding probabilities leads to poor risk assessment

People do not judge solely by appearances. If something looks more like an X than a Y, it may nevertheless be more likely to be a Y if there are many more Ys than Xs.

Probability blindness. Most people struggle with basic probability concepts, leading to poor judgments about risk and uncertainty. Common errors include neglecting base rates, misunderstanding conditional probabilities, and failing to account for sample size.

Availability and vividness. Our risk perceptions are often distorted by the availability heuristic, causing us to overestimate the likelihood of vivid or easily imagined events (like terrorist attacks) while underestimating more common but less dramatic risks (like heart disease).

Improving probabilistic reasoning:

• Learn basic probability theory and statistical concepts
• Practice converting verbal probabilities to numerical estimates
• Use frequency formats instead of single-event probabilities
• Consider long-term frequencies rather than short-term patterns
• Actively seek out and use relevant base rate information

10. Critical thinking and awareness can help combat irrationality

Remember that changing your mind in the light of new evidence is a sign of strength not weakness.

Metacognition is key. Developing awareness of our own thought processes and biases is crucial for improving rational thinking. By understanding common cognitive pitfalls, we can learn to recognize and avoid them.

Cultivating rationality. While we can't eliminate all biases, we can significantly improve our reasoning through deliberate practice and the use of structured thinking tools. This includes learning to:

• Seek out disconfirming evidence
• Consider alternative explanations
• Use formal decision-making frameworks
• Engage in probabilistic thinking
• Embrace intellectual humility

Institutional safeguards. Beyond individual efforts, we need to design institutions and decision-making processes that account for human irrationality. This might include:

• Using statistical models to support expert judgment
• Implementing devil's advocate roles in organizations
• Creating diverse teams to counteract groupthink
• Developing better education in critical thinking and statistical reasoning

Last updated: September 7, 2024