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COVID-19: Calibrate Your Risk Perception

 By Shlomo Maital  

   How risky is COVID-19 to me, personally? How do I process the news, numbers, fake news, and hysteria, to evaluate the seriousness of the threat to me, personally?

   Behavioral economics knows a lot about risk perception. Many years ago, Kahneman and Tversky showed, with simple this-or-that choice experiments, that we humans overwhelmingly overestimate small probabilities.

   This seems to be the case with COVID-19. Writing in the New York Times, medical doctor and psychiatrist Richard Friedman observes: *

  Throughout the country, people are stockpiling food in anticipation of a shortage or a quarantine. Supplies of Purell hand sanitizer flew off the shelves in local pharmacies and are now hard to find or even unavailable online. I understand the impulse to secure one’s safety in the face of a threat. But the fact is that if I increase the supply of medication for my patients, I could well deprive other patients of needed medication, so I reluctantly declined those requests. As a psychiatrist, I frequently tell my patients that their anxieties and fears are out of proportion to reality, something that is often true and comforting for them to realize. But when the object of fear is a looming pandemic, all bets are off.

   Friedman continues:

   In this case, there is reason for alarm. The coronavirus is an uncertain and unpredictable danger. This really grabs our attention, because we have been hard-wired by evolution to respond aggressively to new threats. After all, it’s safer to overact to the unknown than to do too little. Unfortunately, that means we tend to overestimate the risk of novel dangers. I can cite you statistics until I am blue in the face demonstrating that your risk of dying from the coronavirus is minuscule compared with your risk of dying from everyday threats, but I doubt you’ll be reassured. For example, 169,000 Americans died by accident and 648,000 died of heart disease in 2017, according to the Centers for Disease Control and Prevention. As of Sunday morning 19 Americans had died from the coronavirus.

OK – so what SHOULD we be doing, then, in the face of panic that the objective risk does not justify?

   Find ways to help and reassure others, notes the wise Dr. Friedman.

      Researchers found that when subjects made selfish decisions, the brain’s reward center was activated, whereas when they made generous decisions, a region of the brain implicated in empathy lit up. This suggests that people are more likely to be altruistic if they are primed to think of others and to imagine how their behavior might benefit them.

     The good news is that even in the face of fear, we do have the capacity to act in ways that would help limit contagion during an epidemic. Specifically, we can behave altruistically, which benefits everyone. For example, research shows that when people are told that it is possible — but not certain — that going to work while sick would infect a co-worker, people are less willing to stay home than when they are reminded of the certainty that going to work sick would expose vulnerable co-workers to a serious chance of illness. Stressing the certainty of risk, in other words, more effectively motivates altruism than stressing the possibility of harm   The lesson for the real world is that health officials should be explicit in telling the public that selfish responses to an epidemic, such as going to work while sick or failing to wash your hands, threaten the health of the community.

And what should our great leaders do?

     Specifically, public figures need to convey loudly and clearly that we should not go to work or travel when we’re sick and that we should not hoard food and medical supplies beyond our current need — not just give us health statistics or advise about how to wash our hands.

Let us all try to recalibrate our risk perceptions. COVID-19 will spread, it will afflict a lot of people, it IS NOT possible to put it back in Pandora’s box. But there are a lot of other scary things going on in this world that threaten each of us. Because we have known them for a long time (ordinary flu, traffic deaths, etc.), we are habituated. COVID-19 is new, scary and rather unknown. We will in time come to know it. We will overcome it. And in the meantime, help and reassure your family and your friends. Take it from Dr. Friedman.  

   * “The Best Response to the Coronavirus? Altruism, Not Panic. The impulse to secure your safety is understandable but counterproductive.” by Dr. Richard A. Friedman, NYT March 8/2020

When to Trust Your Gut

By Shlomo Maital


Daniel Kahneman

Daniel Kahneman, a psychologist, won the Nobel Prize for Economics in 2002, for his pioneering contribution to how people make decisions under uncertainty.

In 2009 Kahneman debated Gary Klein, a senior scientist at MacroCognition,  about a crucial question: When should people trust their intuition, and when should they suspect it? The debate was published in the American Psychologist. Here is a brief summary, thanks to McKinsey Quarterly and their interview of the two following the original article:

   McKinsey Quarterly:  In your recent American Psychology article, you asked a question that should be interesting to just about all executives: “Under what conditions are the intuitions of professionals worthy of trust?” What’s your answer? When can executives trust their guts?”

         Gary Klein: It depends on what you mean by “trust.” If you mean, “My gut feeling is telling me this; therefore I can act on it and I don’t have to worry,” we say you should never trust your gut. You need to take your gut feeling as an important data point, but then you have to consciously and deliberately evaluate it, to see if it makes sense in this context. You need strategies that help rule things out. That’s the opposite of saying, “This is what my gut is telling me; let me gather information to confirm it.”

     Daniel Kahneman: There are some conditions where you have to trust your intuition. When you are under time pressure for a decision, you need to follow intuition. My general view, though, would be that you should not take your intuitions at face value. Overconfidence is a powerful source of illusions, primarily determined by the quality and coherence of the story that you can construct, not by its validity. If people can construct a simple and coherent story, they will feel confident regardless of how well grounded it is in reality.

McKinsey Quarterly: Is intuition more reliable under certain conditions?

   Gary Klein: We identified two.  First, there needs to be a certain structure to a situation, a certain predictability that allows you to have a basis for the intuition. If a situation is very, very turbulent, we say it has low validity, and there’s no basis for intuition. For example, you shouldn’t trust the judgments of stock brokers picking indivi dual stocks. The second factor is whether decision makers have a chance to get feedback on their judgments, so that they can strengthen them and gain expertise. If those criteria aren’t met, then intuitions aren’t going to be trustworthy.

   Daniel Kahneman: This is an area of difference between Gary and me. I would be wary of experts’ intuition, except when they deal with something that they have dealt with a lot in the past. Surgeons, for example, do many operations of a given kind, and they learn what problems they’re going to encounter. But when problems are unique, or fairly unique, then I would be less trusting of intuition than Gary is. One of the problems with expertise is that people have it in some domains and not in others. So experts don’t know exactly where the boundaries of their expertise are.

   McKinsey Quarterly: Yet senior executives want to make good decisions. Do you have any final words of wisdom for them in that quest?

     Daniel Kahneman: My single piece of advice would be to improve the quality of meetings—that seems pretty strategic to improving the quality of decision making. People spend a lot of time in meetings. You want meetings to be short. People should have a lot of information, and you want to decorrelate errors.

   Gary Klein: What concerns me is the tendency to marginalize people who disagree with you at meetings. There’s too much intolerance for challenge. As a leader, you can say the right things—for instance, everybody should share their opinions. But people are too smart to do that, because it’s risky. So when people raise an idea that doesn’t make sense to you as a leader, rather than ask what’s wrong with them, you should be curious about why they’re taking the position. Curiosity is a counterforce for contempt when people are making unpopular statements.    

Hot Hand: It Lives!

By Shlomo Maital

 Hot Hand

Tuesday (Sept. 20)’s Wall St. Journal Sports Page has an article titled “The ‘Hot Hand’ May Actually be Real”.   It’s about an old idea, that basketball players have ‘hot hand’ streaks, in which their scoring percentage is much higher than normal in a series of shots.   Basketball players KNOW this exists.   But scholars deny it. A famous article by Nobel Laureate Daniel Kahneman examined the data and debunked the ‘hot hand’ theory.

Now comes a new (unpublished) article by economists Joshua Miller and Adam Sanjurjo, with a new perspective. Hey! The hot hand lives! They begin their paper with a riddle.

      Toss a coin four times. Repeat this a million times. What % of the coins come up heads, after the first toss comes up HEADS?

50% ?   obvious?

   Wrong.   40%.     After an “H” on the first toss, there are 14 equally likely sequences in with at least one H (heads) in the next 3 flips. In the average sequence, there is a 60% chance it will be tails, and 40% chance it will be heads.   Work it out!

   Re-analysis of data shows there is a hot hand.   And I am relieved. Because in creativity research, the work of  Mihaly Csikszentmihalyi on “Flow” shows that when we are creative, we are in ‘flow’, we are in the zone….   And surely basketball players too get ‘in the zone’ sometimes. They certainly believe they do.

   The big question? How can you invite a ‘hot hand’? How can you create it? How can you get ‘in the zone’ when you seek ideas?   Best way:   Relax, have fun, enjoy, have idle time, and listen to your subconscience. For basketball? Relax, be confident, believe…and it will come.

Blog entries written by Prof. Shlomo Maital

Shlomo Maital