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Tradeoffs: The Currency of Decision Making

Every decision we make carries an opportunity cost. If we don’t budget wisely, we end up wasting time and energy on things that don’t matter. Here’s how to do it right.

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Economics teaches you that making a choice means giving up something. — Russ Roberts

The disregard of tradeoffs and opportunity costs play out in the same pattern again and again in our lives. We try to do everything and end up accomplishing nothing.

If you’re young, you think you can go all out in your career, have fulfilling relationships, travel on a regular basis, keep up with reading and social media, go without sleep, take out unnecessary credit card debt, and start a family at the same time. The end result is always a total meltdown.

Even if you are twenty or thirty years past this point, you are not immune. Every day we are faced with choices on how to invest our time, and we all can be guilty of the same thing: Taking on too much without properly understanding the costs. The problem is a misunderstanding of the importance of tradeoffs.

The dismal science

It’s not always that we need to do more but rather that we need to focus on less. — Nathan W. Morris

Economics is all about tradeoffs. A tradeoff is loosely defined as any situation where making one choice means losing something else, usually forgoing a benefit or opportunity. We experience tradeoffs in zero-sum situations, when a plus in one area must be a negative in another. A core component of economic theory is the study of how we allocate scarce resources and negotiate opportunity costs.

Economics offers tools that we can use as guides for getting what we want out of life if we take economic lessons and apply them to resources other than money. We all know our money isn’t infinite, yet we end up treating our time and energy and attention as if they are.  Many of us act as if there are no tradeoffs—we can just do everything if we try hard enough. The irony is that those who know how to make tradeoffs can get so much more out of life than those who try to get everything.

That’s not to say we can’t get more out of our time investments, while staying within the limitations imposed by mental and physical health. We can get more efficient in certain areas. We can combine activities. We can decide to focus on one area for a while, then switch to another. We can find plenty of smart ways to achieve more.

But blindly trying to overstuff our days and stretch our minds to their limits is foolish, whatever the self-help gurus and hustle porn promoters claim. We’re sold the false belief that we can be and have everything. As Julian Baggini writes in What’s It All About?: Philosophy & the Meaning of Life, a person in a content, long-term relationship might feel the pressure to get everything right:

They may well be an excellent life partner. But perhaps they are not a sexual athlete, the world’s best communicator, the possessor of a great body, a domestic god or goddess. In their local bookshop, however, they will be told by a book that they can and perhaps should be all of these things. This can foster feelings of inadequacy.

The truth is, when you’re trying to get everything right, you’re getting nothing right.

No one has everything

When we look at other people, we end up getting the impression that they are managing to do everything. They are fantastic parents, their relationships are novel-worthy, they look amazing, their careers are epic, they get enough sleep, and they feel good all the time. This, however, is far from true. We’re just not seeing the hidden tradeoffs they’re making.

Tradeoffs can take a while to become apparent. They sometimes only show up in the long term. We see this in complex adaptive systems. Try to optimize one area and there’s likely to be a price elsewhere. Sometimes it’s an obvious negative equation, like when steroid abuse leads to organ damage, or when fancy houses mask crippling debt.

But often the tradeoffs are genuinely hard to evaluate—people with world-class math abilities are often socially clueless, and many parents sacrifice career advancement to raise their kids. We all have to make sacrifices to be able to invest in what is important to us. Tradeoffs imply that to get really great at a few things, you have to accept being mediocre at a lot more.

There are no solutions. There are only trade-offs.

— Thomas Sowell

Most of us can divide up our lives into a few important areas: work, health, family, relationships, friends, hobbies and so on. It’s an unfortunate truism that we can never quite keep everything in balance. We’re constantly going off-kilter in one area or another and having to make course corrections. When one area goes well, another is usually sliding. It’s like a game of whack-a-mole. Focus on one area and it’s often to the detriment of another.

If you feel like you’re always behind on some area of your life, it’s probably a sign to reconsider tradeoffs. If you feel like you’re always running in place without making any serious progress on anything you care about, you’re probably making the wrong tradeoffs. We often end up allocating our time, and other scarce resources like money, by default, not in the way that gets us what we want.

How to take tradeoffs into account

The necessity of making trade-offs alters how we feel about the decisions we face; more important, it affects the level of satisfaction we experience from the decisions we ultimately make.

― Barry Schwartz, The Paradox of Choice: Why More Is Less

One of the most important areas where we need to pay attention to tradeoffs is when we make decisions. It’s not always enough to consider what we stand to gain from going for option B over option A. We also need to take into account what we lose.

Most big decisions involve major tradeoffs. That’s not necessarily a bad thing. It’s neutral. It’s just the price we pay. Simply being aware of the notion of tradeoffs is enough to change the way we make decisions.

Time is our most fundamental constraint. If you use an hour for one thing, you can’t use it for anything else. Time passes, whatever we do with it. It seems beneficial then to figure out the means of using it with the lowest possible opportunity costs. One of the simplest ways to do this is to establish how you’d like to be using your time, then track how you’re using it for a week. Many people find a significant discrepancy. Once we see the gulf between the tradeoffs we’re making and the ones we’d rather be making, it’s easier to work on changing that.

For instance, understanding tradeoffs in time usage is a good way to cut out unwanted, unhelpful behaviors and wastage. It’s one thing to tell yourself you’re not going to spend half an hour reading the news every morning before starting work. It’s another matter to plan how you’re going to spend that time instead. Will you finish work earlier and cook a fancier dinner, or Skype with a friend who lives abroad, or read a chapter of a book?

The higher the value is of what you could be doing versus what you are doing, the greater the opportunity cost. We’d all agree that we’d rather devote our time to activities we value, yet we can end up not acting that way out of habit or obligation or simply because we haven’t considered what we’re forgoing. We will never manage to get rid of everything that has low value to us, but we can keep cutting it back.

Multitasking as a way of getting more out of our time without making tradeoffs doesn’t work. The tradeoff in that case is often not doing anything particularly well. If you answer emails when you’re with your kids or friends, you’re not really focusing on either. Your emails are banal and the people you are with feel unimportant. Even if we try to find ways around fundamental constraints, the tradeoffs show up somewhere.

The final requirement in order to take tradeoffs into account is that you really need to be able to let go of not being great at something. If you’ve chosen to prioritize your relationship with your kids over a clean house, then you need to be okay with letting other people see the mess. If you’ve prioritized physical activity over entertainment, you need to accept that other people are going to tease you for being ignorant of what’s going on in the world. If you’ve chosen to focus on your career versus maintaining every friendship you’ve ever had, you need to get over the pang of hurt when people stop inviting you out.

Tradeoffs aren’t always easy, which is probably why we try to avoid them.

Conclusion

If we think we can have it all, we’re more likely to end up with nothing. We can get much farther if we decide where to focus our energy and which areas to ignore. When we actively choose which tradeoffs we want to make, we can feel much better about it than when we’re forced to let things slide. We need to actively decide what we value the most.

Each of the myriad decisions we make on a daily basis carries an opportunity cost. If we don’t consider them, we easily end up stuck in situations where we’re forgoing things we’d rather prioritize. We end up lamenting what we’re missing out on against our will, unsure how this happened. But if we first consider the tradeoffs associated with the decisions we make, we can end up with far more satisfying choices.

Survivorship Bias: The Tale of Forgotten Failures

Survivorship bias is a common logical error that distorts our understanding of the world. It happens when we assume that success tells the whole story and when we don’t adequately consider past failures.

There are thousands, even tens of thousands of failures for every big success in the world. But stories of failure are not as sexy as stories of triumph, so they rarely get covered and shared. As we consume one story of success after another, we forget the base rates and overestimate the odds of real success.

“See,” says he, “you who deny a providence, how many have been saved by their prayers to the Gods.”

“Ay,” says Diagoras, “I see those who were saved, but where are those painted who were shipwrecked?”

— Cicero

The Basics

A college dropout becomes a billionaire. Batuli Lamichhane, a chain-smoker, lives to the age of 118. Four young men are rejected by record labels and told “guitar groups are on the way out,” then go on to become the most successful band in history.

Bill Gates, Batuli Lamichhane, and the Beatles are oft-cited examples of people who broke the rules without the expected consequences. We like to focus on people like them—the result of a cognitive shortcut known as survivorship bias.

When we only pay attention to those who survive, we fail to account for base rates and end up misunderstanding how selection processes actually work. The base rate is the probability of a given result we can expect from a sample, expressed as a percentage. If you play roulette, for example, you can be expected to win one out of 38 games, or 2.63%, which is the base rate. The problem arises when we mistake the winners for the rule and not the exception. People like Gates, Lamichhane, and the Beatles are anomalies at one end of a distribution curve. While there is much to learn from them, it would be a mistake to expect the same results from doing the same things.

A stupid decision that works out well becomes a brilliant decision in hindsight.

— Daniel Kahneman

Cause and Effect

Can we achieve anything if we try hard enough? Not necessarily. Survivorship bias leads to an erroneous understanding of cause and effect. People see correlation in mere coincidence. We all love to hear stories of those who beat the odds and became successful, holding them up as proof that the impossible is possible. We ignore failures in pursuit of a coherent narrative about success.

Few would think to write the biography of a business person who goes bankrupt and spends their entire life in debt. Or a musician who tried again and again to get signed and was ignored by record labels. Or of someone who dreams of becoming an actor, moves to LA, and ends up returning a year later, defeated and broke. After all, who wants to hear that? We want the encouragement survivorship bias provides, and the subsequent belief in our own capabilities. The result is an inflated idea of how many people become successful.

The discouraging fact is that success is never guaranteed. Most businesses fail. Most people do not become rich or famous. Most leaps of faith go wrong. It does not mean we should not try, just that we should be realistic with our understanding of reality.

Beware of advice from the successful.

— Barnaby James

Survivorship Bias in Business

Survivorship bias is particularly common in the world of business. Companies which fail early on are ignored, while the rare successes are lauded for decades. Studies of market performance often exclude companies which collapse. This can distort statistics and make success seem more probable than it truly is. Just as history is written by the winners, so is much of our knowledge about business. Those who end up broke and chastened lack a real voice. They may be blamed for their failures by those who ignore the role coincidence plays in the upward trajectories of the successful.

Nassim Taleb writes of our tendency to ignore the failures: “We favor the visible, the embedded, the personal, the narrated, and the tangible; we scorn the abstract.” Business books laud the rule-breakers who ignore conventional advice and still create profitable enterprises. For most entrepreneurs, taking excessive risks and eschewing all norms is an ill-advised gamble. Many of the misfit billionaires who are widely celebrated succeeded in spite of their unusual choices, not because of them. We also ignore the role of timing, luck, connections and socio-economic background. A person from a prosperous family, with valuable connections, who founds a business at a lucrative time has a greater chance of survival, even if they drop out of college or do something unconventional. Someone with a different background, acting at an inopportune time, will have less of a chance.

In No Startup Hipsters: Build Scalable Technology Companies, Samir Rath and Teodora Georgieva write:

Almost every single generic presentation for startups starts with “Ninety Five percent of all startups fail”, but very rarely do we pause for a moment and think “what does this really mean?” We nod our heads in somber acknowledgement and with great enthusiasm turn to the heroes who “made it” — Zuckerberg, Gates, etc. to absorb pearls of wisdom and find the Holy Grail of building successful companies. Learning from the successful is a much deeper problem and can reduce the probability of success more than we might imagine.

Examining the lives of successful entrepreneurs teaches us very little. We would do far better to analyze the causes of failure, then act accordingly. Even better would be learning from both failures and successes.

Focusing on successful outliers does not account for base rates. As Rath and Georgieva go on to write:

After any process that picks winners, the non-survivors are often destroyed or hidden or removed from public view. The huge failure rate for start-ups is a classic example; if failures become invisible, not only do we fail to recognise that missing instances hold important information, but we may also fail to acknowledge that there is any missing information at all.

They describe how this leads us to base our choices on inaccurate assumptions:

Often, as we revel in stories of start-up founders who struggled their way through on cups of ramen before the tide finally turned on viral product launches, high team performance or strategic partnerships, we forget how many other founders did the same thing, in the same industry and perished…The problem we mention is compounded by biographical or autobiographical narratives. The human brain is obsessed with building a cause and effect narrative. The problem arises when this cognitive machinery misfires and finds patterns where there are none.

These success narratives are created both by those within successful companies and those outside. Looking back on their ramen days, founders may believe they had a plan all along. They always knew everything would work out. In truth, they may lack an idea of the cause and effect relationships underlying their progress. When external observers hear their stories, they may, in a quasi-superstitious manner, spot “signs” of the success to come. As Daniel Kahneman has written, the only true similarity is luck.

Consider What You Don’t See

When we read about survivorship bias, we usually come across the archetypical story of Abraham Wald, a statistician studying World War II airplanes. His research group at Columbia University was asked to figure out how to better protect airplanes from damage. The initial approach to the problem was to look at the planes coming back, seeing where they were hit the worst, then reinforcing that area.

However, Wald realized there was a missing, yet valuable, source of evidence: Planes that were hit that did not make it back. Planes that went down, that weren’t surviving, had much better information to provide on areas that were most important to reinforce. Wald’s approach is an example of how to overcome survivorship bias. Don’t look just at what you can see. Consider all the things that started on the same path but didn’t make it. Try to figure out their story, as there is as much, if not more, to be learned from failure.

Considering survivorship bias when presented with examples of success is difficult. It is not instinctive to pause, reflect, and think through what the base rate odds of success are and whether you’re looking at an outlier or the expected outcome. And yet if you don’t know the real odds, if you don’t know if what you’re looking at is an example of survivorship bias, then you’ve got a blind spot.

Whenever you read about a success story in the media, think of all the people who tried to do what that person did and failed. Of course, understanding survivorship bias isn’t an excuse for not taking action, but rather an essential tool to help you cut through the noise and understand the world. If you’re going to do something, do it fully informed.

To learn more, consider reading Fooled By Randomness, or The Art of Thinking Clearly.

How Performance Reviews Can Kill Your Culture

Performance reviews are designed to motivate and bring the best out of our teams, but they often do the opposite. Here’s how to bring out the best in your people.

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If you ask people what’s wrong with corporate workplaces, it won’t take long before you hear someone mention something about being put into a performance bucket. The A bucket is for the best, and the C bucket is for the underperformers. The middle and most common bucket is B, as it spares the supervisor from having to justify why an individual is exceptional or on the verge of getting fired. The problem is that ranking someone against their peers is not the ranking that matters and is counterproductive in terms of building an exceptional corporate culture.

People hate performance reviews. And why wouldn’t they? You either come up short against the superstars, walk away being told to keep doing what you’re doing, or leave feeling like your days are numbered. In this common construct, no one is getting the information they need to properly grow, and a toxic competitive situation is created within the organization. Forced comparisons against others don’t accomplish what we want from them. We think it inspires people. It often makes them dislike each other.

The problem is the system.

The goal of performance reviews is ostensibly to help people become better, but forced ranking has two serious flaws. First, it doesn’t take account of individual rates of improvement. We’re all starting from different places, and we’re also all improving at different rates. If you always come up short, no matter how hard you try, eventually you can’t be bothered putting in the effort to get better.

The second, more important, argument is that forced rankings create a toxic environment that rewards poor behavior. When you’re pitted against your coworkers, you start to game the system. You don’t need to improve at all to get into the A bucket, you just need to make the others look bad. The success of one person means the failure of another. How likeable are you? How good are you at whispering and gossip? How big is your Christmas present to your boss? You can end up cutting others down to stand out as a star performer. But undermining the success of your coworkers ultimately means undermining the success of the entire organization.

Margaret Heffernan, author and former CEO, explained on The Knowledge Project how the relationship between coworkers is fundamental to the function of an organization:

“…the whole premise of organizational life is that together you can do more than you can do in isolation, but that only works if people are connected to each other. It only really works if they trust each other and help each other. That isn’t automatic. … You’re only really going to get the value out of organizational life to the degree that people begin to feel safe with each other, to trust each other, to want to help each other…What impedes the flow is distrust, rivalry, or not knowing what other people need.”

Most of us inevitably compare ourselves to others at some point. Chronic comparing though leads to misery. What matters is not what we do compared to what someone else does, it’s what we do compared to what we’re capable of doing. Both as individuals and in organizations, we need to pay attention to this gap—the gap between where we are right now and what we’re capable of.

Internal motivation is easier to sustain. We produce and push ourselves because we get this immense satisfaction from what we are doing, which motivates us to keep doing it. It doesn’t work the same way when your motivation comes in the form of external comparisons.

So what do we do instead?

If you must grade performances, do it against the past. Is she learning? Is he improving? How can we increase the rate of progress and development? Empower people to help and learn from each other. The range of skills in an organization is often an untapped resource.

Organizations today are often grappling with significant corporate culture issues. It can be the one thing that differentiates you from your competitors. Comparing people against their past selves instead of each other is one of the most effective ways to build a culture in which everyone wants to give their best.

Elastic: Flexible Thinking in a Constantly Changing World

The less rigid we are in our thinking, the more open minded, creative and innovative we become. Here’s how to develop the power of an elastic mind.

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Society is changing fast. Do we need to change how we think in order to survive?

In his book Elastic: Flexible Thinking in a Constantly Changing World, Leonard Mlodinow confirms that the speed of technological and cultural development is requiring us to embrace types of thinking besides the rational, logical style of analysis that tends to be emphasized in our society. He also offers good news: we already have the diverse cognitive capabilities necessary to effectively respond to new and novel challenges. He calls this “elastic thinking.”

Mlodinow explains elastic thinking as:

“the capacity to let go of comfortable ideas and become accustomed to ambiguity and contradiction; the capability to rise above conventional mind-sets and to reframe the questions we ask; the ability to abandon our ingrained assumptions and open ourselves to new paradigms; the propensity to rely on imagination as much as on logic and to generate and integrate a wide variety of ideas; and the willingness to experiment and be tolerant of failure.”

In simpler terms, elastic thinking is about letting your brain make connections without direction.

Let’s explore why elastic thinking is useful and how we can get better at it.

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First of all, let’s throw out the metaphor that our brain is exactly like a computer. Sure, it can perform similar analytic functions. But our brains are capable of insight that is neither analytical nor programmable. Before we can embrace the other types of thinking our brains have innate capacity for, we need to accept that analytic thinking—generally described as the application of systematic, logical analysis—has limitations.

As Mlodinow explains,

“Analytical thought is the form of reflection that has been most prized in modern society. Best suited to analyzing life’s more straightforward issues, it is the kind of thinking we focus on in our schools. We quantify our ability in it through IQ tests and college entrance examinations, and we seek it in our employees. But although analytical thinking is powerful, like scripted processing, it proceeds in a linear fashion…and often fails to meet the challenges of novelty and change.”

Although incredibly useful in a variety of daily situations, analytical thinking may not be best for solving problems whose answers require new ways of doing things.

For those types of problems, elastic thinking is most useful. This is the kind of thinking that enjoys wandering outside the box and generating ideas that fly in and out of left field. “Ours is a far more complex process than occurs in a computer, an insect brain, or even the brains of other mammals,” Mlodinow elaborates. “It allows us to face the world armed with a capability for an astonishing breadth of conceptual analysis.”

Think of it this way: when you come to a river and need to cross it, your analytic thinking comes in handy. It scans the environment to evaluate your options. Where might the water be lowest? Where is it moving the fastest, and thus where is the most dangerous crossing point? What kind of materials are on hand to assist in your crossing? How might others have solved this problem?

This particular river might be new for you, but the concept of crossing one likely isn’t, so you can easily rely on the logical steps of an analytical thinking process.

Elastic thinking is about generating new or novel ideas. When contemplating how best to cross a river, it was this kind of thinking that took us from log bridges to suspension bridges and from rowboats to steamboats. Elastic thinking involves us putting together many disparate ideas to form a new way of doing things.

We don’t need to abandon analytical thinking altogether. We just need to recognize that it has its limitations. If the way we are doing things doesn’t seem to be getting us the results we want, that might be a sign that more elastic thinking is called for.

Why Elasticity?

Mlodinow writes that “humans tend to be attracted to both novelty and change.”

Throughout our history we have willingly lined up and paid to be shocked and amazed. From magic shows and roller coasters to the circus and movies, our entertainment industries never seem to run out of audiences. Our propensity to engage with the new isn’t just confined to entertainment. Think back to the large technological expositions around the turn of the twentieth century that displayed the cutting edge of invention and visions for the future and attracted millions of visitors. Or, going further back, think of the pilgrimages that people made to see new architectural wonders often captured in churches and cathedrals in a time when travel was difficult.

Mlodinow contends these types of actions display a quality “that makes us human…our ability and desire to adapt, to explore, and to generate new ideas.” Part of the reason that novelty attracts us is that we get a hit of feel-good dopamine when we are confronted with something new (and non-threatening). Thus, in terms of our evolutionary history, our tendency to explore and learn was rewarded with a boost of pleasure, which then led to more exploration.

He is careful to explain that exploring doesn’t necessarily mean signing up to go to Mars. We explore when we try something new. “When you socialize with strangers, you are exploring the possibility of new relationships.…When you go on a job interview even though you are employed, you are exploring a new career move.”

The relation of exploration to elasticity is that exploration requires elastic thinking. Exploration, by definition, is venturing into parts unknown where we might be confronted with any manner of new and novel experiences. It’s hard to logically analyze something for which you have no knowledge or experience. It is this attraction to novelty that contributed to our ability to think elastically.

The Value of Emotions in Decision-Making

You can’t make a decision without tapping into your emotions.

Mlodinow suggests that “we tend to praise analytical thought as being objective, untinged by the distortions of human feelings, and therefore tending towards accuracy. But though many praise analytical thought for its detachment from emotion, one could also criticize it as not being inspired by emotion, as elastic thinking is.”

He tells the story of EVR, a man who had brain surgery to remove a benign tumor. After the surgery, EVR couldn’t make decisions. He passed IQ tests and tests about current affairs and ethics. But his life slowly fell apart because he couldn’t make a decision.

“In hindsight, the problem in diagnosing EVR was that all the exams were focused on his capability for analytical thinking. They revealed nothing wrong because his knowledge and logical reasoning skills were intact. His deficit would have been more apparent had they given him a test of elastic thinking—or watched him eat a brownie, or kicked him in the shin, or probed his emotions in some other manner.”

EVR had his orbitofrontal cortex removed—a big part of the brain’s reward system. According to Mlodinow, “Without it, EVR could not experience conscious pleasure. That left him with no motivation to make choices or to formulate and attempt to achieve goals. And that explains why decisions such as where to eat caused him problems: We make such decisions based on our goals, such as enjoying the food or the atmosphere, and he had no goals.”

Our ability to feel emotions is therefore a large and valuable component of our biological decision-making process. As Mlodinow explains, “Evolution endowed us with emotions like pleasure and fear in order that we may evaluate the positive or negative implications of circumstances and events.” Without emotion, we have no motivation to make decisions. What is new would have the same effect as what is old. This state of affairs would not be terribly useful for responding to change. Although we are attracted to novelty, not everything new is good. It is our emotional capabilities that can help us navigate whether the change is positive and determine how we can best deal with it.

Mlodinow contends that “emotions are an integral ingredient in our ability to face the challenges of our environment.” Our inclination to novelty can be exploited, however, and today we have to face and address the multiple drains on our emotions and thus our cognitive abilities. Chronic distractions that manipulate our emotional responses require energy to address, leaving us emotionally spent. This leaves us with less emotional energy to process new experiences and information, leaving us with an unclear picture of what might benefit us and what we should run away from.

Frozen Thoughts

Mlodinow explains that “frozen thinking” occurs when you have a fixed orientation that determines the way you frame or approach a problem.

Frozen thinking most likely occurs when you are an expert in your field. Mlodinow argues that “it is ironic that frozen thinking is a particular risk if you are an expert at something. When you are an expert, your deep knowledge is obviously of great value in facing the usual challenges of your profession, but your immersion in that body of conventional wisdom can impede you from creating or accepting new ideas, and hamper you when confronted with novelty and change.”

When you cling to the idea that the way things are is the way they always are going to be, you close off your brain from noticing new opportunities. In most jobs, this might translate into missed opportunities or an inability to find solutions under changing parameters. But there are some professions where the consequences can be significantly more dire. For instance, as Mlodinow discusses, if you’re a doctor, frozen thinking can lead to major errors in diagnosis.

Frozen thinking is incompatible with elastic thinking. So if you want to make sure you aren’t just regurgitating more of the same while the world evolves around you, augment your elastic thinking.

The ‘How’ of Elastic Thinking

Our brains are amazing. In order to tap into our innate elastic thinking abilities, we really just have to get out of our own way and stop trying to force a particular thinking process.

“The default network governs our interior mental life—the dialogue we have with ourselves, both consciously and subconsciously. Kicking into gear when we turn away from the barrage of sensory input produced by the outside world, it looks toward our inner selves. When that happens, the neural networks of our elastic thought can rummage around the huge database of knowledge and memories and feelings that is stored in the brain, combining concepts that we normally would not recognize. That’s why resting, daydreaming, and other quiet activities such as taking a walk can be powerful ways to generate ideas.”

Mlodinow emphasizes that elastic thinking will happen when we give ourselves quiet space to let the brain do its thing.

“The associative processes of elastic thinking do not thrive when the conscious mind is in a focused state. A relaxed mind explores novel ideas; an occupied mind searches for the most familiar ideas, which are usually the least interesting. Unfortunately, as our default networks are sidelined more and more, we have less unfocused time for our extended internal dialogue to proceed. As a result, we have diminished opportunity to string together those random associations that lead to new ideas and realizations.”

Here are some suggestions for how to develop elastic thinking:

  • Cultivate a “beginner’s mind” by questioning situations as if you have no experience in them.
  • Introduce discord by pursuing relationships and ideas that challenge your beliefs.
  • Recognize the value of diversity.
  • Generate lots of ideas and don’t be bothered that most of them will be bad.
  • Develop a positive mood.
  • Relax when you see yourself becoming overly analytical.

The main lesson is that fruitful elastic thinking doesn’t need be directed. Like children and unstructured play, sometimes we have to give our brains the opportunity to just be. We also have to be willing to stop distracting ourselves all the time. Often it seems that we are afraid of our own thoughts, or we assume that to be quiet is to be bored, so we search for distractions that keep our brain occupied. To encourage elastic thinking in our society, we have to wean ourselves away from the constant stimuli provided by screens.

Mlodinow explains that you can prime your brain for insights by cultivating the kind of mindset that generates them. Don’t force your thinking or apply an analytical approach to the situation. “The challenge of insight is the analogous issue of freeing yourself from narrow, conventional thinking.”

When it comes to developing and exploring the possibilities of elastic thinking, it is perhaps best to remember that, as Mlodinow writes, “the thought processes we use to create what are hailed as great masterpieces of art and science are not fundamentally different from those we use to create our failures.”

Signaling: The Language Peacocks, Gazelles, and Humans All Speak

Signaling and countersignaling are hidden methods of communicating with each other.

We do it all the time as a way to “prove” we are who and what we claim to be.

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The Basics

We are constantly signaling. Every minute of the day, we send signals to others to convey that we are intelligent, successful, attractive, healthy, well-adjusted people with impeccable taste. We signal to our bosses, coworkers, partners, friends, family, strangers on the street—just about everyone. Usually, we can’t just tell people we have a particular positive quality. Talk is cheap and most people have no reason to believe us. We only rely on straightforward assertions when the stakes are low. Plus, there are few things less appealing than bragging. So instead of telling others who we are and how great we are, we use signals.

Signaling is the area where you live and the car you drive. It’s how you take your coffee and whether you drink alcohol or not. It’s the shoes you wear, the newspapers you read, how you spend your Friday nights. People aren’t slaves to signaling; we do have our own preferences. But we are constantly constrained by the impression we want to make. We make choices that signal what we wish to convey.

Signaling is the act of conveying information about ourselves to people in a way that is costly for us and therefore believable. Without the associated cost of sending a signal, we would not be able to trust the information being sent. For instance, if it’s easy to signal that we are amazing without actually being amazing, then the signal would be comparatively worthless and no one would pay attention to it. Thus, effective signals take up a lot of time and energy, but are essential as a means of communication because the information they convey is trustworthy.

Signaling is such a fundamental part of the way we function that failing to recognize it means we miss out on an additional layer of detail in the world. It explains many behaviors that might seem illogical—like why we pay so much for wedding rings, why open offices interfere with productivity, why the smartest people have the messiest handwriting, and why giving gifts is valuable even if it’s a waste of time and money.

By understanding signaling, we can get better at efficiently conveying the information we want others to pick up on. We can assess if what we’re signaling is really worth the effort. We can learn to better detect what other people are indicating to us—and if it’s genuine or just a show. In this post, we’ll look at the origins of signaling, how it works, some of the many ways we use it, and the situations in which it doesn’t work.

Examples of Signaling

“Today, depending on group norms and circumstances, status can be derived from factors as diverse as academic achievement, one’s skills as a sea turtle hunter, and even the ability to drink a lot of beer.” The Cambridge Handbook of Consumer Psychology

Let’s take a look at some of the common instances of signaling you might see in your everyday life.

Advertising is rife with signals. Most ads are not really about espousing the positive qualities of a product or service. They might not even mention those at all. Instead, ads signal the kind of people a product is intended for—sending the message that buying it will further help signal their identity. There’s a big difference between a chocolate bar commercial that shows a bunch of college students partying on the beach and one that shows a working parent relaxing once their kids are in bed. When we stand in a shop or browse a website deciding which shampoo or coffee to buy, those advertising signals influence our decisions. We’re drawn to the products that signal they’re for people like us, and in turn, will signal our identities.

Another theory posits that companies use expensive advertising to signal confidence in their product. Your local plumber isn’t going to buy a Superbowl ad because they (rightly) don’t believe their service can earn enough money to justify it. A company that spends millions on a campaign, however, clearly thinks their product is good enough for it to be worthwhile. When we watch a costly advertisement, we pick up on that confidence and assume we’re looking at a high-quality product. In Principles of Economics, Volume 1, Gregory Mankiw writes, “In the signaling theory of advertising, the advertisement itself contains no real information, but the firm signals the quality of its product to consumers by its willingness to spend money on advertising… An action is being taken not for its intrinsic benefits but because the willingness to take that action conveys private information to someone observing it.”

Sociologists sometimes refer to the broken windows theory, which states that the visible effects of low-level crime, if unchecked, will send a signal that worse crimes are acceptable. The classic example is a neighborhood where an empty building has a broken window. If no one repairs it, it signals that no one is keeping an eye on the state of the neighborhood. Vandals might then break a few more windows or graffiti the building. People might start squatting in it. Things escalate and before anyone knows it, the whole neighborhood has gone downhill. As an old saying goes, if you let a camel poke its nose into the tent, you’ll end up with the whole camel sleeping in there. Small acts of negligence are significant if they act as signals.

Diego Gambetta and Heather Hamil write in Streetwise: How Taxi Drivers Establish Customers’ Trustworthiness that professional taxi drivers learn to pick up on the myriad ways prospective customers signal that they are safe to pick up. We’ve all heard numerous times about the risks of getting into a stranger’s car. But it’s easy to forget that the danger goes both ways. Letting a stranger get into your car is also a tremendous risk. Even in the age of apps like Uber, drivers often have far less information about passengers than the passengers have about the driver. Traditional drivers who collect passengers from street corners or phone calls have even less background knowledge.

The ability to read signals, then, is truly a life or death matter for taxi drivers. Gambetta and Hamil write, “For example, savvy drivers pick up passengers only at well-lit corners, not in dark alleys and savvy passengers go to safe places if they want to be picked up.” Unsafe passengers can and do mimic this behavior, but it carries a higher risk of them being seen or caught on CCTV getting into a taxi. The authors go on to write that “when asked, drivers often say their assessment of customers’ trustworthiness is driven by ‘gut feelings’ or ‘a sixth sense.’ Our expectation is that a logic underlies these feelings and that it consists of several cognitive steps, including an intuitive application of signaling theory.” If your profession involves any direct interactions with customers, you probably have an intuitive awareness of the signals that indicate if you can trust them or not.

With people we are not close to or have not known for long, we usually signal a desire to get along by ignoring any flaws or shortcomings and being polite. The psychiatrist Scott Alexander points out that we often countersignal the strength of an established relationship by doing the opposite. With close friends or long-term partners, it is common for us to make friendly jokes about flaws, or liberally use insults. We know the other person well enough to do this in a way that usually won’t cause genuine offence. We don’t need to signal affection, because it’s already established. They have enough prior information about us.

Honest and Dishonest Signaling

“It is amazing how complete is the delusion that beauty is goodness.” ― Leo Tolstoy, The Kreutzer Sonata

We use signals because they are costly and therefore more believable than straightforward information. But that doesn’t mean all signals are “true”—they can be categorized as honest or dishonest. An honest signal means the signaler possesses the trait they claim. A dishonest one means they don’t. If a signal is easy to fake, it degrades the value of the trait it advertises. A picture of someone in a fancy car used to signal wealth. Now that we’ve all heard of people hiring expensive cars for a photo op, it just looks sleazy without other signals indicating they own it.

It is very hard, if not impossible, to fake experience. For example, you could lie about having gone to medical school, but one day in the ER or surgery would reveal you as a fraud. If it were possible to be deceptive about your experience without anyone finding out, everyone would do it all the time. On the whole, signals that are easy to fake soon die out.

Countersignaling

“An effective use of countersignaling requires finesse. Most importantly, the countersignaller must already hold some independent air of mystique.” Tyler Cowen, Discover Your Inner Economist

A multibillionaire casually admits to eating at McDonald’s for breakfast every day. A powerful CEO shows up at the office in jeans and a hoodie. A middle-class mother sends her child to school in a pajama shirt with unbrushed hair. A New York Times bestselling author says, “Oh, I write books,” when asked what they do at a dinner party. A supermodel posts a candid picture without makeup or filters online.

These are all examples of countersignaling; the act of signaling something by not signaling that thing. A jeans-wearing CEO doesn’t need to show up in a suit. Their status is already assured and they don’t need to dress in a way that encourages employees to respect them. Well-off parents don’t need to do battle to get their kids to look smart at school because, unlike less wealthy parents, they are not as worried about being judged as incompetent. We countersignal when we can afford not to make the effort required to signal.

To give some more examples from The Art of Strategy by Avinash K. Dixit, the most educated people often have the messiest handwriting, and the smartest students are sometimes unwilling to raise their hands and answer questions in class. Those who are secure in their reputations feel little need to defend themselves against minor slights. The most talented people may have no need for formal credentials to impress employers.

This is not to say that countersignaling is inherently dishonest or deliberate. It is, in fact, honest signaling. A person who signals their intelligence by making no effort to signal their intelligence may indeed be humble and uninterested in making others feel inadequate. A very wealthy person may avoid showing their wealth for their own safety and to try to prevent other people from asking them for money. A sought-after consultant may try to be hard to contact because they already have more work than they can handle and don’t want to go through the hassle of turning down more. But generally, the term refers to an intentional lack of signaling. It can be hard to distinguish from genuine humility.

The essence of countersignaling is that those who do it feel no need to signal. The value of countersignaling is that it frees up time, energy and resources. Signaling correctly is an endless, exhausting process where one slip-up can undo previous efforts. Countersignaling is the easier option because it doesn’t involve an active effort. We are most likely to countersignal when a given trait is obvious to any observer. A person moving into an expensive area may not feel the need to signal wealth to their neighbors, because it’s clear from the fact they live there. As Rory Sutherland puts it, “…there is a very big psychological difference between doing something by choice and doing the same thing through necessity.” When we countersignal, we don’t feel insecure or embarrassed about it because we’re in control.

In Discover Your Inner Economist, Tyler Cowen cautions readers to be wary of sharing your good news with too many people, especially ones you want to impress:

Paradoxically, reporting good news can make a person look bad. If we look anxious to reveal good news, our listeners assume that we don’t come by good news very often. Or perhaps our listeners believe we consider the good news a stroke of marvelous luck. Did Michael Jordan need to tell his friends every time he scored thirty points in a game?

If someone hears our good news through the grapevine, they’re far more likely to be impressed. Clearly we must have so much good news that we don’t even bother sharing it!

Information Asymmetry

“People who try to look smart by pointing out obvious exceptions actually signal the opposite.” Naval Ravikant

Signaling is necessary in situations of information asymmetry. One party in a transaction—and it may not be an economic one, simply any exchange of value—has more information than the other. Countersignaling is more appropriate when parties have symmetrical information.

Economist George Akerlof explored how a lack of honest signaling can sustain information asymmetry and damage a marketplace in his 1970 paper, The Market for Lemons: Quality Uncertainty and the Market Mechanism. Akerlof described the used car market, where vehicles fall into two loose categories, peaches (quality cars that function as expected) and lemons (cars with hidden flaws). It is incredibly difficult for the average buyer to figure out which category a prospective purchase falls into. There are few reliably honest signals that a car is a peach, while a lemon may show dishonest signals. So, buyers assume the worst. The result is a market where all cars are lemons, because dealers cannot appropriately price peaches. Luckily, this has changed since Akerlof’s time. We now have access to far more symmetrical information, both about individual vehicles and dealerships. With proper signaling, the market is more efficient. If this hadn’t occurred, the used car market could have disappeared altogether.

When we want to prompt another party to signal information we don’t currently possess, we take actions known as screening. We may not directly ask for it, but we encourage them to signal to us. If you ask the seller of a used car to give you a warranty, you’re not outright asking if it’s a lemon. You know that if it is, they won’t agree to it and you shouldn’t buy it. If they agree, that’s a pretty useful signal of the quality. Gregory Mankiw describes this as “an action taken by an uninformed party to induce an informed party to reveal information.” In the same way that markets find ways to screen products to ensure efficiency, we figure out means of screening the signals we receive from other people. A bouncer might ask someone their star sign to figure out if an ID is genuine. If someone claims they went to the same school as us, we might ask if they remember a certain teacher. A landlord might ask a prospective tenant for a deposit and first month’s payment upfront to indicate their ability to pay on time.

Signaling is not a static process in any situation—it’s always evolving.

Signaling in Biology

“Remember that the most beautiful things in the world are the most useless; peacocks and lilies for instance.” ― John Steinbeck

The concept of signaling theory originated in biology. Animals constantly signal to other members of their species, such as prospective mates, and to other species, such as potential predators. This enables them to communicate a lot of information without using language in the sense we do. In particular, humans and many animals use signaling to attract mates, by indicating their genetic fitness.

The peacock’s tail has long been a source of confusion for biologists. Charles Darwin wrote that the very sight of a single feather left him nauseated. Why would any living being evolve such extravagant, unwieldy plumage? The colorful birds threw a wrench into the works of his theories. Eventually, Darwin realized that sexual selection has different requirements from more general natural selection. Animals don’t just need to survive; they also need to pass on their genes. This means they need ways of signaling their worthiness to members of the opposite sex that are costly enough to be meaningful. A peacock’s tail is exactly that. To survive with such unwieldy plumage, a bird must be strong, healthy and smart—a good mate. The grander its feathers, the more desirable it is. The same is true for many other seemingly illogical features animals possess. Biologist Amotz Zahavi christened this the handicap principle, based on the idea that animals signal through features that are not beneficial for their physical survival, just their genetic survival.

When gazelles and similar animals spot a predator creeping towards them, they don’t always display the flight behavior we might expect. Instead, they engage in a behavior known as “stotting”: they leap dramatically into the air, lifting all four feet at once in a display that uses up a lot of energy and does nothing to help the gazelle get away. It is believed that stotting may be a form of signaling to display to a predator that an animal is strong, healthy and not worth chasing. Pursuing a fast-moving gazelle requires a huge energy expenditure, so predators prefer to pick out elderly, and sick ones that move slower. Stotting sends the signal that a particular animal isn’t worth pursuing.

Some animals are brightly colored to attract mates. Other plants and animals use color for a purpose akin to that of stotting, warding off predators. Aposematism is the term for colors, markings, or other physical features that signal an animal is poisonous or otherwise dangerous if eaten. For example, coral snakes indicate their venom with bright bands of red and yellow or white on black which are easily spotted even from far away. Skunks and badgers have white stripes that serve as the opposite of camouflage and signal their efficient defense mechanisms. To be so visible and still survive, they must be capable of defending themselves. Other species may piggyback on this by mimicking features that signal defenses they don’t actually possess, saving themselves the effort of, for example, producing toxic venom. This is known as Batesian mimicry. If predators cannot tell the difference, they will leave potentially dangerous meals alone to be on the safe side. As with any effective form of signaling, brightly colored markings are costly to an animal—they make it harder for them to hide—which is why they are effective. As a general heuristic, the more conspicuous an organism is, the deadlier it is.

Conspicuous Consumption

“Invention is the mother of necessity.”  ― Thorstein Veblen

Conspicuous consumption is the practice of choosing to purchase goods and services for their capacity to signal wealth and thereby excite respect or envy in others, rather than for their practical value. Economist and sociologist Thorstein Veblen debuted the concept in his 1899 book The Theory of the Leisure Class. Veblen noticed that the wealthiest people in society were eager to outright waste their money on useless purchases, purely for the status this would signal. Having the capacity to squander time and money was the ultimate signal of wealth during Veblen’s time, following the Industrial Revolution. The newly created leisure class suddenly had unprecedented wealth and opportunities for demonstrating it. Prior to the Industrial Revolution, conspicuous consumption was purely the domain of the very rich. Afterward, it was open to almost everyone and became a key part of the way we consume—with the need to signal becoming more important than utility in most of our purchases.

Key to conspicuous consumption is the Veblen good: an item that is coveted because it’s expensive. In a reversal of the traditional supply-demand curve, the higher the price, the greater the demand. Since high-quality items tend to be expensive, we often commit the logical fallacy of assuming all expensive items are of high quality. The value of Veblen goods is contingent on their efficacy as signals of wealth. Some Veblen goods are inherently scarce, which is the source of their value, even if they’re not objectively better than cheaper alternatives. Others aren’t scarce, just expensive.

Signaling in the Workplace

In Willing Slaves, Madeleine Bunting writes, “Many professionals in the public sector have come to the painful conclusion that they now have two tasks; to do their job and then to prove they’ve done it.” This is true in many workplaces in cultures that value overwork—people are incentivized to prioritize the appearance of hard work above all else. The result is deliberate efforts to signal productivity, no matter how counterproductive they prove to be for the company or the individual.

Open offices signal collaboration and productivity to investors or prospective hires. The sight of lots of people scuttling around in a bright, colorful space that hums with activity certainly signals positive qualities about a company. Never mind that it’s detrimental to nearly everyone, especially those on a maker schedule. Likewise, individuals in an office environment where they have no quiet space or privacy feel obligated to scurry around, without time to think, pause for lunch, or take a break. It’s all about looking busy, not about getting work done.

In so many offices being present is equated with working. The bigger and more chaotic the office, the more your actual productivity is obscured. Often, your only real solution to signaling your value is increasing your basic visibility. You may not be doing much—gossiping with colleagues, drinking endless cups of coffee, and taking long lunches—but you are physically present. You are signaling your desire to work and commitment to the company. Unfortunately, it would be better for you and your organization if you spent less time at the office, but with more of it being tangibly productive.

Meetings are another counterproductive signal. The assumption seems to be that the fuller your calendar is, the more important and valuable you are because everyone wants and needs to talk to you. In reality, however, meetings are often poorly run and their objectives are undefined. They are a waste of time, as they cut into the energy you have for learning, deliberate thinking, and actually producing something useful.

Conclusion

Signaling is a hidden dimension of the way we communicate. It crosses the barriers of language, culture, even species. We intuitively learn how to read the signals we encounter in our everyday lives. Being aware of signaling can help us better grasp the information we’re receiving and become more discerning about dishonest signaling or countersignaling. We also need to be aware of what we ourselves are signaling, not just what we’re saying. We can’t just expect to be believed. We need to consider our signals.

Illusion of Transparency: Your Poker Face is Better Than You Think

We tend to think that people can easily tell what we’re thinking and feeling. They can’t. Understanding the illusion of transparency bias can improve relationships, job performance, and more.

***

“A wonderful fact to reflect upon, that every human creature is constituted to be that profound secret and mystery to every other.” ― Charles Dickens, A Tale of Two Cities

When we experience strong emotions, we tend to think it’s obvious to other people, especially those who know us well. When we’re angry or tired or nervous or miserable, we may assume that anyone who looks at our face can spot it straight away.

That’s not true. Most of the time, other people can’t correctly guess what we’re thinking or feeling. Our emotions are not written all over our face all the time. The gap between our subjective experience and what other people pick up on is known as the illusion of transparency. It’s a fallacy that leads us to overestimate how easily we convey our emotions and thoughts.

For example, you arrive at the office exhausted after a night with too little sleep. You drift around all day, chugging espressos, feeling sluggish and unfocused. Everything you do seems to go wrong. At the end of the day, you sheepishly apologize to a coworker for being “useless all day.”

They look at you, slightly confused. ‘Oh,’ they say. ‘You seemed fine to me.’ Clearly, they’re just being polite. There’s no way your many minor mistakes during the day could have escaped their notice. It must be extra apparent considering your coworkers all show up looking fresh as a daisy every single day.

Or imagine that you have to give a talk in front of a big crowd and you’re terrified. As you step on stage, your hands shake, your voice keeps catching in your throat, you’re sweating and flushed. Afterward, you chat to someone from the audience and remark: ‘So that’s what a slow-motion panic attack looks like.’

‘Well, you seemed like a confident speaker,’ they say. ‘You didn’t look nervous at all. I wish I could be as good at public speaking.’ Evidently, they were sitting at the back or they have bad eyesight. Your shaking hands and nervous pauses were far too apparent. Especially compared to the two wonderful speakers who came after you.

No one cares

“Words are the source of misunderstandings.” ― Antoine de Saint-Exupéry, The Little Prince

The reality is that other people pay much less attention to you than you think. They’re often far too absorbed in their own subjective experiences to pick up on subtle cues related to the feelings of others. If you’re annoyed at your partner, they’re probably too busy thinking about what they need to do at work tomorrow or what they’re planning to cook for dinner to scrutinize your facial expressions. They’re not deliberately ignoring you, they’re just thinking about other things. While you’re having a bad day at work, your coworkers are probably distracted by their own deadlines and personal problems. You could fall asleep sitting up and many of them wouldn’t even notice. And when you give a talk in front of people, most of them are worrying about the next time they have to do any public speaking or when they can get a coffee.

In your own subjective experience, you’re in the eye of the storm. But what other people have to go on are things like your tone of voice, facial expressions, and body language. The clues these provide can be hard to read. Unless someone is trying their best to figure out what you’re thinking or feeling, they’re not going to be particularly focused on your body language. If you make even the slightest effort to conceal your inner state, you’re quite able to hide it altogether from everyone.

Our tendency to overestimate how much attention people are paying to us is a result of seeing our own perspective as the only perspective. If we’re feeling a strong emotion, we assume other people care about how we feel as much as we do. This egocentric bias leads to the spotlight effect—in social situations, we feel like there’s a spotlight shining on us. It’s not self-obsession, it’s natural. But overall, this internal self-focus is what makes you think other people can tell what you’re thinking.

Take the case of lying. Even if we try to err on the side of honesty, we all face situations where we feel we have no option except to tell a lie. Setting aside the ethics of the matter, most of us probably don’t feel good about lying. It makes us uncomfortable. It’s normal to worry that whoever you’re lying to will easily be able to tell. Again, unless you’re being very obvious, the chances of someone else picking up on it are smaller than you think. In one study, participants asked to lie to other participants estimated they’d be caught about half the time. In fact, people only guessed they were lying about a quarter of the time—a rate low enough for random chance to account for it.

Tactics

“Even if one is neither vain nor self-obsessed, it is so extraordinary to be oneself—exactly oneself and no one else—and so unique, that it seems natural that one should also be unique for someone else.” ― Simone de Beauvoir

Understanding how the illusion of transparency works can help you navigate otherwise challenging situations with ease.

Start with accepting that other people don’t usually know what you’re thinking and feeling. If you want someone to know your mental state, you need to tell them in the clearest terms possible. You can’t make assumptions. Being subtle about your feelings is not the best idea, especially in high-stakes situations. Err on the side of caution whenever possible by communicating plainly in words about your feelings or views.

Likewise, if you think you know how someone else feels, you should ask them to confirm. You shouldn’t assume you’ve got it right—you probably haven’t. If it’s important, you need to double check. The person who seems calm on the surface might be frenzied underneath. Some of us just appear unhappy to others all the time, no matter how we’re feeling. If you can’t pick up on someone’s mental state, they might not be vocalizing it because they think it’s obvious. So ask.

As Dylan Evans writes in Risk Intelligence: How To Live With Uncertainty,

The first and most basic remedy is simply to treat all your hunches about the thoughts and feelings of other people with a pinch of salt and to be similarly skeptical about their ability to read your mind. It can be hard to resist the feeling that someone is lying to you, or that your own honesty will shine through, but with practice it can be done.

The illusion of transparency doesn’t go away just because you know someone well. Even partners, family members and close friends have difficulty reading each other’s mental states. The problem compounds when we think they should be able to do this. We can easily become annoyed when they can’t. If you’re upset or angry and someone close to you doesn’t make any attempt to make you feel better, they are not necessarily ignoring you. They just haven’t noticed anything is wrong, or they may not know how you want them to respond. As Hanlon’s razor teaches us, it’s best not to assume malicious intent. Understanding this can help avoid arguments that spring up based on thinking we’re communicating clearly when we’re not.

“Much unhappiness has come into the world because of bewilderment and things left unsaid.” ― Fyodor Dostoevsky

Set yourself free

Knowing about the illusion of transparency can be liberating. Guess what? No one really cares. Or almost no one. If you’ve got food stuck between your teeth or you stutter during a speech or you’re exhausted at work, you might as well assume no one has noticed. Most of the time, they haven’t.

Back to public speaking: We get it all wrong when we think people can tell we’re nervous about giving a talk. In a study entitled “The illusion of transparency and the alleviation of speech anxiety,” Kenneth Savitskya and Thomas Gilovich tested how knowing about the effect could help people feel less scared about public speaking.1 When participants were asked to give a speech, their self-reported levels of nervousness were well above what audience members guessed they were experiencing. Inside, they felt like a nervous wreck. On the outside, they looked calm and collected.

But when speakers learned about the illusion of transparency beforehand, they were less concerned about audience perceptions and therefore less nervous. They ended up giving better speeches, according to both their own and audience assessments. It’s a lot easier to focus on what you’re saying if you’re not so worried about what everyone else is thinking.

The sun revolves around me, doesn’t it?

In psychology, anchoring refers to our tendency to make an estimated guess by selecting whatever information is easily available as our “anchor,” then adjusting from that point. Often, the adjustments are insufficient. This is exactly what happens when you try to guess the mental state of others. If we try to estimate how a friend feels, we take how we feel as our starting point, then adjust our guess from there.

According to the authors of a paper entitled “The Illusion of Transparency: Biased Assessments of Other’s Ability to Read One’s Emotional States,”

People are typically quite aware of their own internal states and tend to focus on them rather intently when they are strong. To be sure, people recognize that others are not privy to the same information as they are, and they attempt to adjust for this fact when trying to anticipate another’s perspective. Nevertheless, it can be hard to get beyond one’s own perspective even when one knows that.

This is similar to hindsight bias, where things seem obvious in retrospect, even if they weren’t beforehand. When you look back on an event, it’s hard to disentangle what you knew then from what you know now. You can only use your current position as an anchor, a perspective which is inevitably skewed.

If you’re trying to hide your mental state, you’re probably doing better than you think. Unless you’re talking to, say, a trained police interrogator or professional poker player, other people are easy to fool. They’re not looking that hard, so a mild effort to hide your emotions is likely to work well. People can’t read your mind, whether you’re trying to pretend you don’t hate the taste of a trendy new beer, or trying to conceal your true standing in a negotiation to gain more leverage.

The illusion of transparency explains why, even once you’re no longer a teenager, it still seems like few people understand you. It’s not that other people are ambivalent or confused. Your feelings just aren’t as clear as you think. Often you can’t see beyond the confines of your own head and neither can anyone else. It’s best to make allowances for that.

Footnotes
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    https://rsrc.psychologytoday.com/files/u47/sdarticle.pdf