OPINION31 January 2013

The bright and the blind


Plenty of big talk and big thought was on show at the World Economic Forum in Davos last week. But the behavioural sciences give us cause to worry about the decisions being made there, says Crawford Hollingworth.

World Economic Forum 2013

Source: Copyright by World Economic Forum / swiss-image.ch/Photo Moritz Hager

Staff members working during preparations at the congress centre at the Annual Meeting 2013 of the World Economic Forum in Davos, Switzerland, 22 January 2013.

Shane Frederick, a professor of marketing at Yale, developed one of the most informative and accurate predictors of susceptibility to heuristics and cognitive biases – the Cognitive Reflection Task (CRT). It measures to what extent we apply logical reasoning to our intuitions and gut feelings by asking people three questions. Out of 3,500 people tested – a mix of US students and other citizens – only 17% answered all three correctly and 33% scored a big fat zero.

But CRT is to some degree correlated with intelligence. Students from the Massachusetts Institute of Technology, a top university, performed much better than the average: 48% got all three questions right, but that still leaves 52% who got some or all of them wrong. So while being ‘smart’ in the traditional sense certainly helps, it does not make you completely immune to irrationality.

“Overconfidence in ourselves can actually make us blind to the times when we might be mistaken or in the process of making a poor decision”

Frederick proposed that one of the reasons for such wide variation was that low scorers in the CRT were lazier or impatient – more prone to be “cognitive misers” or give the first answer that came into their heads, relying on their intuitions. Studies have found that bright people are often (but not always) those who are more patient, with more self-control and it is this that gives them a slight immunity to cognitive bias. Smart people are more likely to have developed logical rules to apply to problems and know when to apply them. They are also more likely to monitor their thinking and gut feelings and double-check their answers.

But while bright people are less susceptible to biases, they can be more blind to them.

Other people’s problems
Overconfidence in ourselves can actually make us blind to the times when we might be mistaken or in the process of making a poor decision. Smart people tend to think that it is only other people that rely too heavily on intuition or who make fast, ill thought-out decisions. Consequently, the more common reaction to learning about the different cognitive biases is to recognise them easily in others, but rarely see them in ourselves. Researchers call it the bias blind spot.

A fascinating study published last summer by Richard West, Russell Meserve and Keith Stanovich found that smart people are actually the most prone to the bias blind spot. They discuss two possible reasons for this blindness – one looking outward, the other looking inward.

  • The looking outward explanation is what they call ‘naïve realism’ – our belief that we perceive the world and its intricacies correctly; that we think we are right and more in control because we assume we are thinking logically all the time. We don’t expect to be wrong. But we can still suffer from poor judgement or behave irrationally.
  • The looking inward explanation comes down to ‘introspective illusion’ and a failure to correctly observe our own behaviour. It seems that our in-built mechanism to track what we do and how we behave is faulty since we are not aware of the many unconscious cues which can affect our behaviour. Introspection tells us that we do something for one reason, where in reality it may be due to an entirely different cause that we have failed to account for.

A 2009 global survey of executives by McKinsey found evidence that might suggest the presence of bias blind spots in business leaders. The survey found that while 80% of C-suite level executives thought that “management admitted mistakes and killed unsuccessful initiatives in a timely manner”, only 49% of sub-C-suite employees agreed.

Different perspectives
One way of diminishing the bias blind spot is to simply make people more aware of it so they are primed to be on the lookout for things that might affect their decision-making. Yet even Daniel Kahneman, Nobel prize-winning psychologist, is humble about his own (ir)rationality. On the opening morning of the World Economic Forum he admitted that after 40 years studying the subject his intuitive thinking “is just as prone to overconfidence, extreme predictions and the planning fallacy as it was before I made a study of these issues”.

Better approaches might be ones business schools are taking, including starting meetings with anonymous voting to avoid groupthink on big decisions. Edward de Bono devised an elegant way to de-bias meetings with his Six Thinking Hats system, which involves running through six different perspectives and viewpoints systematically to help break us out of habitual ways of thinking.

Additionally, asking others to be honest and tell us how they perceive our actions could help increase our self-awareness and change our behaviour.

Crawford Hollingworth is a co-founder of The Behavioural Architects


11 years ago

Actually, responses to the CRT and similar exercises are also affected by individual psychological differences such as the individual's tolerance for uncertainty in a decision making situation (need for cognitive closure) and their desire to engage in elaboration i.e. thinking (need for cognition). We all fall somewhere on a continuum when it comes to these differences so that we might be high or low on one but not the other. For example, someone high in need for cognitive closure has a desire for an answer - any answer - for a question/dilemma and a lower tolerance for ambiguity that precedes a decision (such as that in CRT) - it affects the choice of decision making strategy so that we're more likely to 'fall prey' to System 1 thinking to reduce the decision making time. On the other hand, someone who has a high need for cognition may well enjoy the elaboration and effort that goes with trying to solve the task in CRT. Of course, there are links between these and IQ, but it's not just about the latter - individual psychological differences play a huge part in how people respond to CRT and also affects how various BE 'techniques' such as anchoring, framing and hyperbolic discounting work on consumers which is why we need to understand those, too.

Like Report

11 years ago

I agree with the need to link with academia, if you can find parertns who are practically focused and recognise the value of robust underpinning concepts such as BE you should be onto a winner!

Like Report