Tuesday, July 10, 2007

Biased for Life?

Pre-programmed machines are dedicated to do certain tasks in a way humans would do. My automatic washing machine doesn’t have to discuss with me while washing clothes. It has decided the cycle even before I press start. Do humans come hardwired with instructions? (where’s the instruction manual?) When we say that we might inherit certain traits from our parents or from our family, which include behavioural traits as well, do we mean that they have been pre-programmed into our systems?

There is a book by Nassim Taleb called “Fooled by Randomness”, which deals with the human fallibility when it comes to uncertainty. One of the most important things I realized while reading it, was that we aren’t as smart as we think we are. We are prone to make errors in judgement even if the risks are calculated.

Imagine that I have an imaginary HOT girlfriend. We are in an imaginary stable relationship. One fine evening she spots me with a HOTTER chick at a coffee shop. Even though my girlfriend knows that we are in a stable relationship she can’t resist believing that I am seeing someone else. Jealousy seeps in, but she lets me go for that moment (since she might have most certainly read Taleb’s book as well). The next time, she spots me with some other HOTTER chick at some different coffee shop. These are completely random events, she just happens to be in the neighbourhood, not that she is stalking me. But then she has observed & decided to let go, yet again, I love my imaginary girlfriend for that. The third time on yet another random occasion she spots me with some other HOT chick. What should be the most rational reaction of my imaginary girlfriend?

Options include;

Believe firmly that I am seeing someone else

Believe that it was just a coincidence that she saw me with three different girls

Believe that I am a polygamous asshole dating 4 chicks at the same time

Now this is how we run into the problem of induction. Even though she is sensible, tolerant, understanding, caring, did I mention HOT? She is still prone to react emotionally. She has to think a posteriori of the whole incident. She has seen the final outcome; she has to reach to the cause through inductive reasoning. Taleb says that the human brain isn’t capable, sometimes, of handling this problem. We jump to conclusions without considering all the available data.

He cites the example of people in the old world who had almost concluded that all swans are white, strictly based on empirical evidence. After a few years, one fine day, someone spotted a black swan in Australia which shattered their results. This must have hit some ornithologists by the balls to have come across a so called anomaly in their knowledge. This is just a peek into our learning process through observations or experience & shows (in Taleb’s Words) the fragility of our knowledge.

Data, or to be precise, a theory, is subject to falsification. We can’t always certainly say that the given data is absolutely correct. Take for instance, theoretical physics. There are so many base theories in it & over the years so many ideas have accumulated over these base theories, that each new offshoot has become a specialisation subject per se. On the basis of few known facts, many theories have spawned which make us believe that we get closer to understanding our own existence in the universe. I am not saying all these theories can be falsified, but certainly some of them can be, in the same way Einstein’s did to Newton’s. We hit the wall when we start assuming that the theory is a proven fact & start using it as a foundation to build new theories on. When we do that & suddenly the base theory is falsified, what happens to all the new ideas built on it? Poof. Proof, is yet another problem, not all things can be physically proven to exist, some things can be mathematically or theoretically proven to exist. How are we to assume that these proofs are absolute? Or so to speak, should we or should we not assume in the first place?

In defence to the argument of the problem of induction, many scientists have said that when a person who asks for proof of scientific understanding while sitting on a plane, is a hypocrite, since he is using the same product of scientific belief that is helping him stay afloat in a mega tonne mass transport unit.

The problem Taleb highlights, is marriage to our ideas & our convictions. We tend to believe that our convictions are absolute & indisputable. This is a cultural flaw of the human society & can be observed across the globe. People who are non conformists also fall for it sometimes. But amidst all this, there are a few people who allow the inclusion of luck, randomness & uncertainty into their thinking.

Are some people actually prone to take more risks than others? Are some people actually risk averse? To cite examples, there are successful investors, adrenalin junkies, stunt professionals, people employed in public services who have to constantly deal with natural calamities & so on. These people have chosen professions which account for a considerable amount of risk. How they play the risk is another story. But if we try & peek into the lives of these people, we might find that they lead perfectly normal lives yet play with risks which might potentially wipe them off the planet, metaphorically speaking. Are these people genetically programmed to indulge in risk seeking behaviour? Do they deliberately make such professional choices when there can be other ways to do the same job? Safer ways?

Yes, if we peek into the life of humans some 10,000 years ago, the period to which we can attribute the beginning of actual human life, we would see that the clans of people were hunter gatherer types. Surviving in the wild along with other animals, or to be precise, predators; must have been a real task. Right from hunting for food, to hunting for protection, the humans must have used their above average intelligence to gain the ability to survive. This might have included, formulating ways to defend & attack, especially without having any lethal physical characteristics. So they had to rely on their instincts, depend fully on their senses & on their intelligent brain to devise weapons. To survive in those conditions must have involved a lot of risk. The people who were incapable to risk their lives would usually die of hunger or would be killed by a predator.

This potential to deal with risk in order to survive must have driven mankind since a really long time. Also altruistic behaviour towards fellow humans allowed the risk-averse types to thrive along with risk seekers. That’s we find both risk seekers & risk averse people living side by side in today’s world, diversifying the gene pool.

What possible advantage can risk seeking bring? For starters it would help us grasp opportunities which might pop out of the blue. Reaching a point where we are uncertain about the outcome, we might look out for escape routes & might find a profitable one. We ideally wouldn’t have found this route if we hadn’t taken the risk to venture to the unknown. This is what drives adrenalin junkies to sheer excitement & insurance companies to sheer panic & high premiums.

Incorporating risk into everyday life creates lot of room for luck. Interpreting luck as luck & not attributing every win to sheer skill is what we can learn from our natural instincts.

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