We often seek out rational reasons for pursuing a course of action. We believe that rationality is the prized jewel of our mental toolkit that will lead us to the best decisions. But is it really so? If rationality is indeed the most important aspect of our decision making, then why is it that evolution has not made us more rational? Why do we have cognitive biases and why do we fall for them so often? In reality, what we call rationality is those aspects of our behaviors that are much easier explain than others. In this post I am going to describe some behaviors that we think are not rational but actually perfectly sound when we dig deeper.
Robert Trevor’s theory of self deception is a fascinating one. Imagine the scenario of a dog chasing a hare. If the hare jumps randomly, it has a higher chance of survival as its body would does not given away subtle cues as to the location of its next jump. If it follow a predefined logic or pattern then the dogs would have evolved to spot these cues and would be able to predict their next jump and catch them. Thus, more self conscious hares, who devise patterns, would have gotten eliminated from the gene pool leaving us with unconscious hares. Same goes with us. Being able to deceive ourselves or keep ourselves in the dark, could be an evolutionary tactic. This is why we don’t have enough self knowledge and don’t have access to our real motivations, instincts or compulsions.
Gerd Gigerenzer came up with the idea of defensive decision making. We often berate people for going with the herd and not applying a rational decision making process, however there is more to it than just laziness. Going with the popular default choice lets you avoid making a decision altogether. This decision, to not make a decision, is not designed to maximise welfare for you but rather to minimise the mental damage in case of a bad outcome.
Take the example of picking between the popular airport JFK and its lesser popular cousin, Newark. If you fly from JFK and your flight gets delayed, you blame the airline but if you fly from Newark and your flight gets delayed you blame your decision to fly from Newark. This is why when you make a decision and choose a not so popular option, you will blame yourself as you made a noticeable decision. Blame unlike credit, always finds a home and nobody ever got fired for booking their boss’s flight from JFK.
Approximately 15 miracles happen in our lives every year. Here’s a back of the hand math for this. Let’s define a miracle as a one in a million event and us staying awake for 12 hours a day. This translates to 43200 waking seconds or recorded data points every day. This adds up to 15 million data points a year or 15 miracles. Due to sheer volume of things happening around us, things that ought not to happen a lot, happen surprisingly often.
I was blown away by this way of thinking about how our beliefs are reinforced. We place a lot importance on our own experiences in the name of rationality and consolidate beliefs held due to irrational reasons. In his book The Believing Brain, Michael Shermer, goes into detail on how beliefs are formed. He talks about Patternicity and Agenticity. These are our evolutionary abilities to spot patterns in noise and assigning them meanings that aren’t really there. He explains how anecdotal learning comes naturally, while science takes effort. We are the descendents of those who could find patterns to survive the dangers that lurked near them. We don’t have a system that overlooks this pattern recognition. Our brain simply runs a cost heuristic - cost of making a false positive error (the bush moving is a tiger) Vs that of the false negative error (its just wind). This is why we make superstitious beliefs, because we cannot distinguish between bad learning and learning.
In 19th century Prussia during the Nepoleanic wars, the Royal family of Prussia urged all citizens to exchange their gold jewellery and get iron jewellery in return. Yes you read it right, exchange their gold jewellery for iron jewellery. The gold was needed to fund the war efforts and help protect the fatherland. The iron jewellery people received, bore the inscription Gold gab ich für Eisen (I gave gold for iron). This iron jewellery became a different kind of status symbol. While people owning the more valuable gold jewellery signalled affluence, those owning the iron jewellery signalled being affluent and also generous and patriotic.
Meanings associated with things is often dissociated from its core characteristics. Human beings can derive meaning in owning the basest of metals and oddest of jobs. Meaning is what powers engagement and high engagement is the difference between mediocre and great companies. Human beings find value in different ways and it affects perceptions and value. Costly social signals are a way to show exclusivity. Things like fancy envelopes, advertising, expensive real estate, high quality furniture in stores etc are a way to indicate that you have considerable assets on the line and so what you are selling must be really good.
If someone ever questions your choice of buying goods of a specific brand over a lesser priced similar good of a non name brand, you should tell them that there’s actually perfectly legitimate reasoning behind the trust in Brands. Brand names indicate a reputation to uphold. If Samsung ever finds itself with 1000 faulty televisions, it has no incentive to offload those to their customers as they have a reputation to uphold and protect its line of other products that are likely to be affected if people report faulty televisions sold by them. On the other hand someone who has no reputation, has no such incentive. This is why we trust brands. It’s not just to show off, it’s a way to sleep easy knowing you made a good decision. Instead of asking who can sell me the best TV, you are in effect asking who has the most to lose in case they sell me a dud. This is why relying on brands is a worthwhile strategy.
I run a startup called Harmonize. We are hiring and if you’re looking for an exciting startup journey, please write to jobs@harmonizehq.com. Apart from this blog, I tweet about startup life and practical wisdom in books.