From high in the throes of the BHP Ivory tower on Bourke Street, the luxury of having the time to write is almost as small as the pedestrian traffic far below. My identity for over one third of the week’s 168 hours is now a (Junior) Funds Management Analyst – an intensely challenging but thoroughly engaging posting. A perspective on this ‘phase shift’ shall be forthcoming at an indeterminate date.
In the brief interlude between finishing work and calling it a night, I had the impulse to write on a couple of faulty psychological subroutines or ‘cognitive biases’ which afflict, adversely, our thinking and decision process: apophenia and illusory correlation, the underpinnings for ‘retard roulette’ and the prevalence of ‘dirty shortcuts,’ respectively
Apophenia relates specifically to drawing patterns from meaningless and unsystematic data, whilst illusory correlation denotes making links between concepts which bear no association. Both cognitive phenomena are rampant in society and this assessment will delve into the two biases, as well as the human propensity for allowing them to influence decision-making.
Apophenia / ‘Retard Roulette’
I frequent the casino very seldomly; having gambled on only one occasion three years ago, my presence at Melbourne’s Crown nowadays is an affair of analysis and amusement. Many a scenario on the casino floor exemplifies the phenomenon of apophenia. My personal favourite is the roulette wheel. Roulette is without fail the epithet of apophenic stupidity – an electronic display beside each wheel displays a list of the most recent numbers spun, and the casino has pre-printed cards on which I observed people religiously marking down the numbers as they appear.
Confident they’ve compiled a long enough list, these people then draw patterns from the data and typically place bets on those numbers which have appeared with the lowest frequency, on the premise that those numbers’ ‘time is up’ and they’re more likely to be spun next. Evidently, pattern thinking is at work here. Their intuition is that in the long run the dispersion of numbers rolled will revert back to the mean (that is the under-rolled numbers should come up more often to equalise the frequency distribution) Along those same lines of logic, newspapers will publish how frequently each lotto number has come up since the inception of the game.
The clear flaw in this way of thinking is that each turn of the roulette wheel and each draw of lotto is an independent event which is not contingent upon previous outcomes. Picture a European roulette wheel with 37 slots (zero to thirty-six). Now let us say that the number 28 has come up the last four spins. Statistically, there is a 0.00005% or 1 in 1.87 million chance of this occurring. If I were to promise a 20:1 payout that 28 wouldn’t come up next spin – there would be no shortage of takers. Why? Because we are generally hard-wired to rely on pattern thinking in our evaluative reasoning and decision making process – “28 has come up four times in a row; there’s no way it could come up again – that would be…almost…impossible” and so the 20:1 bet is oft taken because it seems commonsensical.
But of course, because the result of the next spin is an independent outcome, it pays no heed to the outcomes of historical spins. Therefore there is exactly a 1 in 37 or 2.7% chance of 28 coming up in any given spin. So taking my offer of a 20:1 payout is a terrible bet . If you bet one dollar, of the 37 equally probably outcomes, you’d get back or ‘win’ $20 in one of them, but lose your dollar in the other 36. Thus the mathematical expectation is that for every dollar you bet, you would expect to lose 43¢ – clearly no-one with half a brain would take such a bet.
Therein apophenia rears its head – the card-marking roulette players are making decisions based on patterns. Patterns which have been lifted from unsystematic (random) and meaningless information on the past spins of the wheel. Yet many gamblers in such games seem to think they have the house beat because they possess some exceptional aptitude. Delusions of grandeur.
Illusory Correlation / ‘Dirty Shortcuts’
Insofar as human nature and as exemplified above– we like to ‘see’ patterns where they do not exist and will often base a great deal of our decisions upon what we perceive to be ‘patterns.’ This is not too far estranged from the concept of illusory correlation, where we draw linkages (especially causal) between two quantities that bear questionable relationship with each other, and subsequently use these linkages as rules of thumb when making decisions – particularly those we know as ‘snap judgements.’
Wealth and intelligence is one such illusory correlation. Though there are a great deal many smart and moneyed people out there; so too are there a lot of rich idiots and penniless intellectuals. Therefore we cannot be so presumptuous as to contend ‘poor people are dumb’ or any such derivative that implies a direct causal link between intelligence and wealth in either direction.
Yet, we continue to employ this correlation when making snap judgements – seeing a person dressed in rags on the street, the correlative rule is activated and there is an automatic assumption that the person is ignorant. But what if the person is a genius who has decided that society’s material fetish and obsession with appearance is inherently wrong and hence resolved to live a very basic life by their own choosing? No credence is given to even the possibility.
‘Dirty shortcut’ is appropriate insofar as it gets us to the destination quicker (less cognitive effort before decision), albeit we do not exactly arrive clean (contamination of objective judgement). Which brings us to why we are particularly susceptible to using these dirty shortcuts ignorantly – people are inherently lazy. This observation rings true almost universally; be it driving to a shop that’s a few minutes away on foot for being too lazy to walk, or frequently purchasing takeaway because one simply can’t be bothered cooking.
This laziness is the product of time starvation at the hands of a society which places imperative pressure on its members to accrue status. Being incessantly ‘busy’ also means we are forced to be ‘lazy’ by choosing ease, speed and instant gratification over accuracy in many of the things that aren’t core life pursuits. A learned defect that underpins human behaviour more than we care to admit and the reason life’s most regrettable mistakes are made. What seems the easy way out will often result in learning the hard way.
Illusory correlation with its ‘dirty shortcuts’ is an ingrained heuristic of the human psyche which can be used to effortlessly manipulate perception. For example, any fool can spend two thousand dollars on a suit, and in spite of his intelligence, wearing it will likely draw illusory correlation with influence and intellect (at least until said fool opens mouth). Perhaps not the best example, but the logic is straightforward: if you know how correlations are drawn, you can exploit them to meld how you are perceived and eventually how people behave toward you. Politicians, celebrities, and con artists (though the latter two are sometimes distinguishable) are quite skilled at this art.
A certain clarity is imbued once we become aware of illusory correlations and overcome them. Disassociating common couplings such as money/happiness and corporations/evil can be difficult when they are enforced by an increasingly demented media. But the important truth to bear in mind is that by continuing to use them, we are condemning ourselves to make errors of judgement and sometimes severe and painful mistakes that could so easily have been avoided.
On a personal note, I’ve lost track of how much time and effort I’ve expended fighting to help people uncouple some of the more dangerous correlations, (i.e. first relationship/soulmate) only to encounter last-minute resistance so high that regression inevitably occurs. Over the last few years I have become exceptionally competent at flogging dead horses – but it has given me insight and hopefully a marble of wisdom to add to my pouch.
P. X. Waterstone
Sherpa of winding roads