Tag: Psychology

Critical Mass and Tipping Points: How To Identify Inflection Points Before They Happen

Reading Time: 18 minutes

Critical mass, which is sometimes referred to as tipping points, is one of the most effective mental models you can use to understand the world. The concept can explain everything from viral cat videos to why changing habits is so hard.

 

The Basics

Sometimes it can seem as if drastic changes happen at random.

One moment a country is stable; the next, a revolution begins and the government is overthrown. One day a new piece of technology is a novelty; the next, everyone has it and we cannot imagine life without it. Or an idea lingers at the fringes of society before it suddenly becomes mainstream.

As erratic and unpredictable as these occurrences are, there is a logic to them, which can be explained by the concept of critical mass. A collaboration between Thomas Schelling (a game theorist) and Mark Granovetter (a sociologist) led to the concept’s being identified in 1971.

Also known as the boiling point, the percolation threshold, the tipping point, and a host of other names, critical mass is the point at which something (an idea, belief, trend, virus, behavior, etc.) is prevalent enough to grow, or sustain, a process, reaction, or technology.

As a mental model, critical mass can help us to understand the world around us by letting us spot changes before they occur, make sense of tumultuous times, and even gain insight into our own behaviors. A firm understanding can also give us an edge in launching products, changing habits, and choosing investments.

In The Decision Book, Mikael Krogerus wrote of technological critical masses:

Why is it that some ideas – including stupid ones – take hold and become trends, while others bloom briefly before withering and disappearing from the public eye?

… Translated into a graph, this development takes the form of a curve typical of the progress of an epidemic. It rises, gradually at first, then reaches the critical point of any newly launched product, when many products fail. The critical point for any innovation is the transition from the early adapters to the sceptics, for at this point there is a ‘chasm’. …

With technological innovations like the iPod or the iPhone, the cycle described above is very short. Interestingly, the early adaptors turn away from the product as soon as the critical masses have accepted it, in search of the next new thing.

In Developmental Evaluation, Michael Quinn Patton wrote:

Complexity theory shows that great changes can emerge from small actions. Change involves a belief in the possible, even the “impossible.” Moreover, social innovators don’t follow a linear pathway of change; there are ups and downs, roller-coaster rides along cascades of dynamic interactions, unexpected and unanticipated divergences, tipping points and critical mass momentum shifts. Indeed, things often get worse before they get better as systems change creates resistance to and pushback against the new.

In If Nobody Speaks of Remarkable Things, Jon McGregor writes a beautiful explanation of how the concept of critical mass applies to weather:

He wonders how so much water can resist the pull of so much gravity for the time it takes such pregnant clouds to form, he wonders about the moment the rain begins, the turn from forming to falling, that slight silent pause in the physics of the sky as the critical mass is reached, the hesitation before the first swollen drop hurtles fatly and effortlessly to the ground.

Critical Mass in Physics

In nuclear physics, critical mass is defined as the minimum amount of a fissile material required to create a self-sustaining fission reaction. In simpler terms, it’s the amount of reactant necessary for something to happen and to keep happening.

This concept is similar to the mental model of activation energy. The exact critical mass depends on the nuclear properties of a material, its density, its shape, and other factors.

In some nuclear reactions, a reflector made of beryllium is used to speed up the process of reaching critical mass. If the amount of fissile material is inadequate, it is referred to as a subcritical mass. Once the rate of reaction is increasing, the amount of material is referred to as a supercritical mass. This concept has been taken from physics and used in many other disciplines.

Critical Mass in Sociology

In sociology, a critical mass is a term for a group of people who make a drastic change, altering their behavior, opinions or actions.

“When enough people (a critical mass) think about and truly consider the plausibility of a concept, it becomes reality.”

—Joseph Duda

In some societies (e.g., a small Amazonian tribe), just a handful of people can change prevailing views. In larger societies (in particular, those which have a great deal of control over people, such as North Korea), the figure must usually be higher for a change to occur.

The concept of a sociological critical mass was first used in the 1960s by Morton Grodzins, a political science professor at the University of Chicago. Grodzins studied racial segregation — in particular, examining why people seemed to separate themselves by race even when that separation was not enforced by law. His hypothesis was that white families had different levels of tolerance for the number of people of racial minorities in their neighborhoods. Some white families were completely racist; others were not concerned with the race of their neighbors. As increasing numbers of racial minorities moved into neighborhoods, the most racist people would soon leave. Then a tipping point would occur — a critical mass of white people would leave until the area was populated by racial minorities. This phenomenon became known as “white flight.”

Critical Mass in Business

In business, at a macro level, critical mass can be defined as the time when a company becomes self-sustaining and is economically viable. (Please note that there is a difference between being economically viable and being profitable.) Just as a nuclear reaction reaches critical mass when it can sustain itself, so must a business. It is important, too, that a business chooses its methods for growth with care: sometimes adding more staff, locations, equipment, stock, or other assets can be the right choice; at other times, these additions can lead to negative cash flow.

The exact threshold and time to reach critical mass varies widely, depending on the industry, competition, startup costs, products, and other economic factors.

Bob Brinker, host of Money Talk, defines critical mass in business as:

A state of freedom from worry and anxiety about money due to the accumulation of assets which make it possible to live your life as you choose without working if you prefer not to work or just working because you enjoy your work but don’t need the income. Plainly stated, the Land of Critical Mass is a place in which individuals enjoy their own personal financial nirvana. Differentiation between earned income and assets is a fundamental lesson to learn when thinking in terms of critical mass. Earned income does not produce critical mass … critical mass is strictly a function of assets.

Independence or “F*** You” Money

Most people work jobs and get paychecks. If you depend on a paycheck, like most of us, this means you are not independent — you are not self-sustaining. Once you have enough money, you can be self-sustaining.

If you were wealthy enough to be free, would you really keep the job you have now? How many of us check our opinions or thoughts before voicing them because we know they won’t be acceptable? How many times have you agreed to work on a project that you know is doomed, because you need the paycheck?

“Whose bread I eat: his song I sing.”

—Proverb

In his book The Black Swan, Nassim Taleb describes “f*** you” money, which, “in spite of its coarseness, means that it allows you to act like a Victorian gentleman, free from slavery”:

It is a psychological buffer: the capital is not so large as to make you spoiled-rich, but large enough to give you the freedom to choose a new occupation without excessive consideration of the financial rewards. It shields you from prostituting your mind and frees you from outside authority — any outside authority. … Note that the designation f*** you corresponds to the exhilarating ability to pronounce that compact phrase before hanging up the phone.

Critical Mass in Psychology

Psychologists have known for a long time that groups of people behave differently than individuals.

Sometimes when we are in a group, we tend to be less inhibited, more rebellious, and more confident. This effect is known as mob behavior. (An interesting detail is that mob psychology is one of the few branches of psychology which does not concern individuals.) As a general rule, the larger the crowd, the less responsibility people have for their behavior. (This is also why individuals and not groups should make decisions.)

“[Groups of people] can be considered to possess agential capabilities: to think, judge, decide, act, reform; to conceptualize self and others as well as self’s actions and interactions; and to reflect.”

—Burns and Engdahl

Gustav Le Bon is one psychologist who looked at the formation of critical masses of people necessary to spark change. According to Le Bon, this formation creates a collective unconsciousness, making people “a grain of sand amid other grains of sand which the wind stirs up at will.”

He identified three key processes which create a critical mass of people: anonymity, contagion, and suggestibility. When all three are present, a group loses their sense of self-restraint and behaves in a manner he considered to be more primitive than usual. The strongest members (often those who first convinced others to adopt their ideas) have power over others.

Examples of Critical Mass

Virality

Viral media include forms of content (such as text, images, and videos) which are passed amongst people and often modified along the way. We are all familiar with how memes, videos and jokes spread on social media. The term “virality” comes from the similarity to how viruses propagate.

“We are all susceptible to the pull of viral ideas. Like mass hysteria. Or a tune that gets into your head that you keep on humming all day until you spread it to someone else. Jokes. Urban legends. Crackpot religions. No matter how smart we get, there is always this deep irrational part that makes us potential hosts for self-replicating information.”

—Neal Stephenson, Snow Crash

In The Selfish Gene, Richard Dawkins compared memes to human genes. While the term “meme” is now, for the most part, used to describe content that is shared on social media, Dawkins described religion and other cultural objects as memes.

The difference between viral and mainstream media is that the former is more interactive and is shaped by the people who consume it. Gatekeeping and censorship are also less prevalent. Viral content often reflects dominant values and interests, such as kindness (for example, the dancing-man video) and humor. The importance of this form of media is apparent when it is used to negatively impact corporations or powerful individuals (such as the recent United Airlines and Pepsi fiascoes.)

Once a critical mass of people share and comment on a piece of content online, it reaches viral status. Its popularity then grows exponentially before it fades away a short time later.

Technology

The concept of critical mass is crucial when it comes to the adoption of new technology. Every piece of technology which is now (or once was) a ubiquitous part of our lives was once new and novel.

Most forms of technology become more useful as more people adopt them. There is no point in having a telephone if it cannot be used to call other people. There is no point in having an email account if it cannot be used to email other people.

The value of networked technology increases as the size of the network itself does. Eventually, the number of users reaches critical mass, and not owning that particular technology becomes a hindrance. Useful technology tends to lead the first adopters to persuade those around them to try it, too. As a general rule, the more a new technology depends upon a network of users, the faster it will reach critical mass. This situation creates a positive feedback loop.

In Zero to One, Peter Thiel describes how PayPal achieved the critical mass of users needed for it to be useful:

For PayPal to work, we needed to attract a critical mass of at least a million users. Advertising was too ineffective to justify the cost. Prospective deals with big banks kept falling through. So we decided to pay people to sign up.

We gave new customers $10 for joining, and we gave them $10 more every time they referred a friend. This got us hundreds of thousands of new customers and an exponential growth rate.

Another illustration of the importance of critical mass for technology (and the unique benefits of crowdfunding) comes from Chris LoPresti:

A friend of mine raised a lot of money to launch a mobile app; however, his app was trounced by one from another company that had raised a tenth of what he had, but had done so through 1,000 angels on Kickstarter. Those thousand angels became the customers and evangelists that provided the all-important critical mass early on. Any future project I do, I’ll do through Kickstarter, even if I don’t need the money.

Urban Legends

Urban legends are an omnipresent part of society, a modern evolution of traditional folklore. They tend to involve references to deep human fears and popular culture. Whereas traditional folklore was often full of fantastical elements, modern urban legends are usually a twist on reality. They are intended to be believed and passed on. Sociologists refer to them as “contemporary legends.” Some can survive for decades, being modified as time goes by and spreading to different areas and groups. Researchers who study urban legends have noted that many do have vague roots in actual events, and are just more sensationalized than the reality.

One classic urban legend is “The Hook.” This story has two key elements: a young couple parked in a secluded area and a killer with a hook for a hand. The radio in their car announces a serial killer on the loose, often escaped from a nearby institution, with a hook for a hand. In most versions, the couple panics and drives off, only to later find a hook hanging from the car door handle. In others, the man leaves the car while the woman listens to the radio bulletin. She keeps hearing a thumping sound on the roof of the car. When she exits to investigate, the killer is sitting on the roof, holding the man’s severed head. The origins of this story are unknown, although it first emerged in the 1950s in America. By 1960, it began to appear in publications.

Urban legends are an example of how a critical mass of people must be reached before an idea can spread. While the exact origins are rarely clear, it is assumed that it begins with a single person who misunderstands a news story or invents one and passes it on to others, perhaps at a party.

Many urban legends have a cautionary element, so they may first be told in an attempt to protect someone. “The Hook” has been interpreted as a warning to teenagers engaging in promiscuous behavior. When this story is looked at by Freudian folklorists, the implications seem obvious. It could even have been told by parents to their children.

This cautionary element is clear in one of the first printed versions of “The Hook” in 1960:

If you are interested in teenagers, you will print this story. I do not know whether it’s true or not, but it does not matter because it served its purpose for me… I do not think I will ever park to make out as long as I live. I hope this does the same for other kids.

Once a critical mass of people knows an urban legend, the rate at which it spreads grows exponentially. The internet now enables urban legends (and everything else) to pass between people faster. Although a legend might also be disproved faster, that’s a complicated mess. For now, as Lefty says in Donnie Brasco, “Forget about it.”

The more people who believe a story, the more believable it seems. This effect is exacerbated when media outlets or local police fall for the legends and issue warnings. Urban legends often then appear in popular culture (for example, “The Hook” inspired a Supernatural episode) and become part of our modern culture. The majority of people stop believing them, yet the stories linger in different forms.

Changes in Governments and Revolutions

From a distance, it can seem shocking when the people of a country revolt and overthrow dominant powers in a short time.

What is it that makes this sudden change happen? The answer is the formation of a critical mass of people necessary to move marginal ideas to a majority consensus. Pyotr Kropotkin wrote:

Finally, our studies of the preparatory stages of all revolutions bring us to the conclusion that not a single revolution has originated in parliaments or in any other representative assembly. All began with the people. And no revolution has appeared in full armor — born, like Minerva out of the head of Jupiter, in a day. They all had their periods of incubation during which the masses were very slowly becoming imbued with the revolutionary spirit, grew bolder, commenced to hope, and step by step emerged from their former indifference and resignation. And the awakening of the revolutionary spirit always took place in such a manner that at first, single individuals, deeply moved by the existing state of things, protested against it, one by one. Many perished, “uselessly,” the armchair critic would say. But the indifference of society was shaken by these progenitors. The dullest and most narrow-minded people were compelled to reflect, “Why should men, young, sincere, and full of strength, sacrifice their lives in this way?” It was impossible to remain indifferent; it was necessary to take a stand, for, or against: thought was awakening. Then, little by little, small groups came to be imbued with the same spirit of revolt; they also rebelled — sometimes in the hope of local success — in strikes or in small revolts against some official whom they disliked, or in order to get food for their hungry children, but frequently also without any hope of success: simply because the conditions grew unbearable. Not one, or two, or tens, but hundreds of similar revolts have preceded and must precede every revolution.

When an oppressive regime is in power, a change is inevitable. However, it is almost impossible to predict when that change will occur. Often, a large number of people want change and yet fear the consequences or lack the information necessary to join forces. When single individuals act upon their feelings, they are likely to be punished without having any real impact. Only when a critical mass of people’s desire for change overwhelms their fear can a revolution occur. Other people are encouraged by the first group, and the idea spreads rapidly.

One example occurred in China in 1989. While the desire for change was almost universal, the consequences felt too dire. When a handful of students protested for reform in Beijing, authorities did not punish them. We have all seen the classic image of a lone student, shopping bags in hand, standing in front of a procession of tanks and halting them. Those few students who protested were the critical mass. Demonstrations erupted in more than 300 towns all over the country as people found the confidence to act.

Malcolm Gladwell on Tipping Points

An influential text on the topic of critical mass is Malcolm Gladwell’s The Tipping Point. Published in 2000, the book describes a tipping point as “the moment of critical mass, the threshold, the boiling point.” He notes that “Ideas and products and messages and behaviors spread just like viruses do” and cites such examples as the sudden popularity of Hush Puppies and the steep drop in crime in New York after 1990. Gladwell writes that although the world “may seem like an immovable, implacable place,” it isn’t. “With the slightest push — in just the right place — it can be tipped.”

Referring to the 80/20 rule (also known as Pareto’s principle), Gladwell explains how it takes a tiny number of people to kickstart the tipping point in any sort of epidemic:

Economists often talk about the 80/20 Principle, which is the idea that in any situation roughly 80 percent of the “work” will be done by 20 percent of the participants. In most societies, 20 percent of criminals commit 80 percent of crimes. Twenty percent of motorists cause 80 percent of all accidents. Twenty percent of beer drinkers drink 80 percent of all beer. When it comes to epidemics, though, this disproportionality becomes even more extreme: a tiny percentage of people do the majority of the work.

Rising crime rates are also the result of a critical mass of people who see unlawful behavior as justified, acceptable, or necessary. It takes only a small number of people who commit crimes for a place to seem dangerous and chaotic. Gladwell explains how minor transgressions lead to more serious problems:

[T]he Broken Windows theory … was the brainchild of the criminologist James Q. Wilson and George Kelling. Wilson and Kelling argued that crime is the inevitable result of disorder. If a window is broken and left unrepaired, people walking by will conclude that no one cares and no one is in charge. Soon, more windows will be broken, and the sense of anarchy will spread from the building to the street it faces, sending a signal that anything goes. In a city, relatively minor problems like graffiti, public disorder, and aggressive panhandling, they write, are all the equivalent of broken windows, invitations to more serious crimes…

According to Gladwell’s research, there are three main factors in the creation of a critical mass of people necessary to induce a sudden change.

The first of these is the Law of the Few. Gladwell states that certain categories of people are instrumental in the creation of tipping points. These categories are:

  • Connectors: We all know connectors. These are highly gregarious, sociable people with large groups of friends. Connectors are those who introduce us to other people, instigate gatherings, and are the fulcrums of social groups. Gladwell defines connectors as those with networks of over one hundred people. An example of a cinematic connector is Kevin Bacon. There is a trivia game known as “Six Degrees of Kevin Bacon,” in which players aim to connect any actor/actress to him within a chain of six films. Gladwell writes that connectors have “some combination of curiosity, self-confidence, sociability, and energy.”
  • Mavens: Again, we all know a maven. This is the person we call to ask what brand of speakers we should buy, or which Chinese restaurant in New York is the best, or how to cope after a rough breakup. Gladwell defines mavens as “people we rely upon to connect us with new information.” These people help create a critical mass due to their habit of sharing information, passing knowledge on through word of mouth.
  • Salesmen: Whom would you call for advice about negotiating a raise, a house price, or an insurance payout? That person who just came to mind is probably what Gladwell calls a salesman. These are charismatic, slightly manipulative people who can persuade others to accept what they say.

The second factor cited by Gladwell is the “stickiness factor.” This is what makes a change significant and memorable. Heroin is sticky because it is physiologically addictive. Twitter is sticky because we want to keep returning to see what is being said about and to us. Game of Thrones is sticky because viewers are drawn in by the narrative and want to know what happens next. Once something reaches a critical mass, stickiness can be considered to be the rate of decline. The more sticky something is, the slower its decline. Cat videos aren’t very sticky, so even the viral ones thankfully fade into the night quickly.

Finally, the third factor is the specific context; the circumstances, time, and place must be right for an epidemic to occur. Understanding how a tipping point works can help to clarify the concept of critical mass.

The 10% Rule

One big question is: what percentage of a population is necessary to create a critical mass?

According to researchers at Rensselaer Polytechnic Institute, the answer is a mere 10%. Computational analysis was used to establish where the shift from minority to majority lies. According to director of research Boleslaw Szymanski:

When the number of committed opinion holders is below 10 percent, there is no visible progress in the spread of ideas. It would literally take the amount of time comparable to the age of the universe for this size group to reach the majority. Once that number grows above 10 percent, the idea spreads like flame.

The research has shown that the 10% can comprise literally anyone in a given society. What matters is that those people are set in their beliefs and do not respond to pressure to change them. Instead, they pass their ideas on to others. (I’d argue that the percentage is lower. Much lower. See Dictatorship of the Minority.)

As an example, Szymanski cites the sudden revolutions in countries such as Egypt and Tunisia: “In those countries, dictators who were in power for decades were suddenly overthrown in just a few weeks.”

According to another researcher:

In general, people do not like to have an unpopular opinion and are always seeking to try locally to come to a consensus … As agents of change start to convince more and more people, the situation begins to change. People begin to question their own views at first and then completely adopt the new view to spread it even further. If the true believers just influenced their neighbors, that wouldn’t change anything within the larger system, as we saw with percentages less than 10.

The potential use of this knowledge is tremendous. Now that we know how many people are necessary to form a critical mass, this information can be manipulated — for good or evil. The choice is yours.

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Confirmation Bias And the Power of Disconfirming Evidence

Reading Time: 10 minutes

Confirmation bias is our tendency to cherry-pick information that confirms our existing beliefs or ideas. Confirmation bias explains why two people with opposing views on a topic can see the same evidence and come away feeling validated by it. This cognitive bias is most pronounced in the case of ingrained, ideological, or emotionally charged views.

Failing to interpret information in an unbiased way can lead to serious misjudgments. By understanding this, we can learn to identify it in ourselves and others. We can be cautious of data that seems to immediately support our views.

Confirmation Bias: Why You Should Seek Out Disconfirming Evidence

When we feel as if others “cannot see sense,” a grasp of how confirmation bias works can enable us to understand why. Willard V. Quine and J.S. Ullian described this bias in The Web of Belief as such:

The desire to be right and the desire to have been right are two desires, and the sooner we separate them the better off we are. The desire to be right is the thirst for truth. On all counts, both practical and theoretical, there is nothing but good to be said for it. The desire to have been right, on the other hand, is the pride that goeth before a fall. It stands in the way of our seeing we were wrong, and thus blocks the progress of our knowledge.

Experimentation beginning in the 1960s revealed our tendency to confirm existing beliefs, rather than questioning them or seeking new ones. Other research has revealed our single-minded need to enforce ideas.

“What the human being is best at doing is interpreting all new information so that their prior conclusions remain intact.”

— Warren Buffett

Like many mental models, confirmation bias was first identified by the ancient Greeks. In The History of the Peloponnesian War, Thucydides described this tendency as such:

For it is a habit of humanity to entrust to careless hope what they long for, and to use sovereign reason to thrust aside what they do not fancy.

Our use of this cognitive shortcut is understandable. Evaluating evidence (especially when it is complicated or unclear) requires a great deal of mental energy. Our brains prefer to take shortcuts. This saves the time needed to make decisions, especially when we’re under pressure. As many evolutionary scientists have pointed out, our minds are unequipped to handle the modern world. For most of human history, people experienced very little new information during their lifetimes. Decisions tended to be survival based. Now, we are constantly receiving new information and have to make numerous complex choices each day. To stave off overwhelm, we have a natural tendency to take shortcuts.

In “The Case for Motivated Reasoning,” Ziva Kunda wrote, “we give special weight to information that allows us to come to the conclusion we want to reach.” Accepting information that confirms our beliefs is easy and requires little mental energy. Contradicting information causes us to shy away, grasping for a reason to discard it.

In The Little Book of Stupidity, Sia Mohajer wrote:

The confirmation bias is so fundamental to your development and your reality that you might not even realize it is happening. We look for evidence that supports our beliefs and opinions about the world but excludes those that run contrary to our own… In an attempt to simplify the world and make it conform to our expectations, we have been blessed with the gift of cognitive biases.

“The human understanding when it has once adopted an opinion, draws all things else to support and agree with it. And though there be a greater number and weight of instances to be found on the other side, yet these it either neglects and despises, or else by some distinction sets aside and rejects.”

— Francis Bacon

How Confirmation Bias Clouds Our Judgment

The complexity of confirmation bias arises partly from the fact that it is impossible to overcome it without an awareness of the concept. Even when shown evidence to contradict a biased view, we may still interpret it in a manner that reinforces our current perspective.

In one Stanford study, half of the participants were in favor of capital punishment, and the other half were opposed to it. Both groups read details of the same two fictional studies. Half of the participants were told that one study supported the deterrent effect of capital punishment, and the other opposed it. The other participants read the opposite information. No matter, the majority of participants stuck to their original views, pointing to the data that supported it and discarding that which did not.

Confirmation bias clouds our judgment. It gives us a skewed view of information, even when it consists only of numerical figures. Understanding this cannot fail to transform a person’s worldview — or rather, our perspective on it. Lewis Carroll stated, “we are what we believe we are,” but it seems that the world is also what we believe it to be.

A poem by Shannon L. Alder illustrates this concept:

Read it with sorrow and you will feel hate.
Read it with anger and you will feel vengeful.
Read it with paranoia and you will feel confusion.
Read it with empathy and you will feel compassion.
Read it with love and you will feel flattery.
Read it with hope and you will feel positive.
Read it with humor and you will feel joy.
Read it without bias and you will feel peace.
Do not read it at all and you will not feel a thing.

Confirmation bias is somewhat linked to our memories (similar to availability bias). We have a penchant for recalling evidence that backs up our beliefs. However neutral the original information was, we fall prey to selective recall. As Leo Tolstoy wrote:

The most difficult subjects can be explained to the most slow-witted man if he has not formed any idea of them already; but the simplest thing cannot be made clear to the most intelligent man if he is firmly persuaded that he knows already, without a shadow of doubt, what is laid before him.

“Beliefs can survive potent logical or empirical challenges. They can survive and even be bolstered by evidence that most uncommitted observers would agree logically demands some weakening of such beliefs. They can even survive the destruction of their original evidential bases.”

— Lee Ross and Craig Anderson

Why We Ignore Contradicting Evidence

Why is it that we struggle to even acknowledge information that contradicts our views?

When first learning about the existence of confirmation bias, many people deny that they are affected. After all, most of us see ourselves as intelligent, rational people. So, how can our beliefs persevere even in the face of clear empirical evidence? Even when something is proven untrue, many entirely sane people continue to find ways to mitigate the subsequent cognitive dissonance.

Much of this is the result of our need for cognitive consistency. We are bombarded by information. It comes from other people, the media, our experience, and various other sources. Our minds must find means of encoding, storing, and retrieving the data we are exposed to. One way we do this is by developing cognitive shortcuts and models. These can be either useful or unhelpful.

Confirmation bias is one of the less-helpful heuristics which exists as a result. The information that we interpret is influenced by existing beliefs, meaning we are more likely to recall it. As a consequence, we tend to see more evidence that enforces our worldview. Confirmatory data is taken seriously, while disconfirming data is treated with skepticism. Our general assimilation of information is subject to deep bias.

Constantly evaluating our worldview is exhausting, so we prefer to strengthen it instead. Plus holding different ideas in our head is hard work. It’s much easier to just focus on one.

We ignore contradictory evidence because it is so unpalatable for our brains. According to research by Jennifer Lerner and Philip Tetlock, we are motivated to think critically only when held accountable by others. If we are expected to justify our beliefs, feelings, and behaviors to others, we are less likely to be biased towards confirmatory evidence. This is less out of a desire to be accurate, and more the result of wanting to avoid negative consequences or derision for being illogical. Ignoring evidence can be beneficial, such as when we side with the beliefs of others to avoid social alienation.

Examples of Confirmation Bias in Action

Creationists vs. Evolutionary Biologists
A prime example of confirmation bias can be seen in the clashes between creationists and evolutionary biologists. The latter use scientific evidence and experimentation to reveal the process of biological evolution over millions of years. The former see the Bible as being true in the literal sense and think the world is only a few thousand years old. Creationists are skilled at mitigating the cognitive dissonance caused by factual evidence that disproves their ideas. Many consider the non-empirical “evidence” for their beliefs (such as spiritual experiences and the existence of scripture) to be of greater value than the empirical evidence for evolution.

Evolutionary biologists have used fossil records to prove that the process of evolution has occurred over millions of years. Meanwhile, some creationists view the same fossils as planted by a god to test our beliefs. Others claim that fossils are proof of the global flood described in the Bible. They ignore evidence to contradict these conspiratorial ideas and instead use it to confirm what they already think.

Doomsayers
Take a walk through London on a busy day, and you are pretty much guaranteed to see a doomsayer on a street corner, ranting about the upcoming apocalypse. Return a while later and you will find them still there, announcing that the end has been postponed.

In When Prophecy Fails, Leon Festinger explained the phenomenon this way:

Suppose an individual believes something with his whole heart; suppose further that he has a commitment to this belief, that he has taken irrevocable actions because of it; finally, suppose that he is presented with evidence, unequivocal and undeniable evidence, that his belief is wrong: what will happen? The individual will frequently emerge, not only unshaken but even more convinced of the truth of his beliefs than ever before. Indeed, he may even show a new fervor about convincing and converting people to his view.

Music

Confirmation bias in music is interesting because it is actually part of why we enjoy it so much. According to Daniel Levitin, author of This Is Your Brain on Music:

As music unfolds, the brain constantly updates its estimates of when new beats will occur, and takes satisfaction in matching a mental beat with a real-in-the-world one.

Witness the way a group of teenagers will act when someone puts on “Wonderwall” by Oasis or “Creep” by Radiohead. Or how their parents react to “Starman” by Bowie or “Alone” by Heart. Or even their grandparents to “The Way You Look Tonight” by Sinatra or “Non, Je ne Regrette Rien” by Edith Piaf. The ability to predict each successive beat or syllable is intrinsically pleasurable. This is a case of confirmation bias serving us well. We learn to understand musical patterns and conventions, enjoying seeing them play out.

Homeopathy
The multibillion-dollar homeopathy industry is an example of mass confirmation bias.

Homeopathy was invented by Jacques Benveniste, a French researcher studying histamines. Benveniste became convinced that as a solution of histamines was diluted, the effectiveness increased due to what he termed “water memories.” Test results were performed without blinding, leading to a placebo effect.

Benveniste was so certain of his hypothesis that he found data to confirm it and ignored that which did not. Other researchers repeated his experiments with appropriate blinding and proved Benveniste’s results to have been false. Many of the people who worked with him withdrew from science as a result.

Yet homeopathy supporters have only grown in numbers. Supporters cling to any evidence to support homeopathy while ignoring that which does not.

“One of the biggest problems with the world today is that we have large groups of people who will accept whatever they hear on the grapevine, just because it suits their worldview—not because it is actually true or because they have evidence to support it. The striking thing is that it would not take much effort to establish validity in most of these cases… but people prefer reassurance to research.”

— Neil deGrasse Tyson

Scientific Experiments
In good scientific experiments, researchers should seek to falsify their hypotheses, not to confirm them. Unfortunately, this is not always the case (as shown by homeopathy). There are many cases of scientists interpreting data in a biased manner, or repeating experiments until they achieve the desired result. Confirmation bias also comes into play when scientists peer-review studies. They tend to give positive reviews of studies that confirm their views and of studies accepted by the scientific community.

This is problematic. Inadequate research programs can continue past the point where the evidence points to a false hypothesis. Confirmation bias wastes a huge amount of time and funding. We must not take science at face value and must be aware of the role of biased reporting.

“The eye sees only what the mind is prepared to comprehend.”

— Robertson Davies

Conclusion

This article can provide an opportunity for you to assess how confirmation bias affects you. Consider looking back over the previous paragraphs and asking:

  • Which parts did I automatically agree with?
  • Which parts did I ignore or skim over without realizing?
  • How did I react to the points which I agreed or disagreed with?
  • Did this post confirm any ideas I already had? Why?
  • What if I thought the opposite of those ideas?

Being cognizant of confirmation is not easy, but with practice, it is possible to recognize the role it plays in the way we interpret information. You need to search out disconfirming evidence.

As Rebecca Goldstein wrote in Incompleteness: The Proof and Paradox of Kurt Godel:

All truths — even those that had seemed so certain as to be immune to the very possibility of revision — are essentially manufactured. Indeed, the very notion of the objectively true is a socially constructed myth. Our knowing minds are not embedded in truth. Rather, the entire notion of truth is embedded in our minds, which are themselves the unwitting lackeys of organizational forms of influence.

To learn more about confirmation bias, read The Little Book of Stupidity or The Black Swan. Be sure to check out our entire latticework of mental models.

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Warnings From Sleep: Nightmares and Protecting The Self

Reading Time: 3 minutes

“All of this is evidence that the mind, although asleep,
is constantly concerned about the safety and integrity of the self.”

***

Rosalind Cartwright — also known as the Queen of Dreams — is a leading sleep researcher. In The Twenty-four Hour Mind: The Role of Sleep and Dreaming in Our Emotional Lives, she explores the role of nightmares and how we use sleep to protect ourselves.

When our time awake is frightening or remains unpressed, the sleeping brain “may process horrible images with enough raw fear attached to awaken a sleeper with a horrendous nightmare.” The more trauma we have in our lives the more likely we are to experience anxiety and nightmares after a horrific event.

The common feature is a threat of harm, accompanied by a lack of ability to control the circumstances of the threat, and the lack of or inability to develop protective behaviors.

The strategies we use for coping effectively with extreme stress and fear are controversial. Should we deny the threatening event and avoid thinking about it better than thinking about it and becoming sensitized to it?

One clear principle that comes out of this work is that the effects of trauma on sleep and dreaming depend on the nature of the threat. If direct action against the threat is irrelevant or impossible (as it would be if the trauma was well in the past), then denial may be helpful in reducing stress so that the person can get on with living as best they can. However, if the threat will be encountered over and over (such as with spousal abuse), and direct action would be helpful in addressing the threat, then denial by avoiding thinking about the danger (which helps in the short-term) will undermine problem-solving efforts and mastery in the long run. In other words, if nothing can be done, emotion-coping efforts to regulate the distress (dreaming) is a good strategy; but if constructive actions can be taken, waking problem-solving action is more adaptive.

What about nightmares?

Nightmares are defined as frightening dreams that wake the sleeper into full consciousness and with a clear memory of the dream imagery. These are not to be confused with sleep terrors. There are three main differences between these two. First, nightmare arousals are more often from late in the night’s sleep, when dreams are longest and the content is most bizarre and affect-laden (emotional); sleep terrors occur early in sleep. Second, nightmares are REM sleep-related, while sleep terrors come out of non-REM (NREM) slow-wave sleep (SWS). Third, sleepers experience vivid recall of nightmares, whereas with sleep terrors the experience is of full or partial amnesia for the episode itself, and only rarely is a single image recalled.

Nightmares abort the REM sleep, a critical component of our always on brain, Cartwright explains:

If we are right that the mind is continuously active throughout sleep—reviewing emotion-evoking new experiences from the day, scanning memory networks for similar experiences (which will defuse immediate emotional impact), revising by updating our organized sense of ourselves, and rehearsing new coping behaviors—nightmares are an exception and fail to perform these functions.

The impact is to temporarily relieve the negative emotion. The example Cartwright gives is “I am not about to be eaten by a monster. I am safe in my own bed.” But because the nightmare has woken me up, the nightmare is of no help in regulating my emotions (a critical role of sleep). As we learn to manage negative emotions while we are awake, that is, as we grow up, nightmares reduce in frequency and we develop skills for resolving fears.

It’s not always fear that wakes us from a nightmare. We can also be woken by anger, disgust, and grief.

Cartwright concludes, with an interesting insight, on the role of sleep in consolidating and protecting “the self.”:

[N]ightmares appear to be more common in those who have intense reactions to stress. The criteria cited for nightmare disorder in the diagnostic manual for psychiatric disorders, the Diagnostic and Statistical Manual IV-TR (DSM IV-TR), include this phrase “frightening dreams usually involving threats to survival, security, or self-esteem.” This theme may sound familiar: Remember that threats to self-esteem seem to precede NREM parasomnia awakenings. All of this is evidence that the mind, although asleep, is constantly concerned about the safety and integrity of the self.

The Twenty-four Hour Mind goes on to explore the history of sleep research through case studies and synthesis.

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Charlie Munger on Getting Rich, Wisdom, Focus, Fake Knowledge and More

Reading Time: 9 minutes

“In the chronicles of American financial history,” writes David Clark in The Tao of Charlie Munger: A Compilation of Quotes from Berkshire Hathaway’s Vice Chairman on Life, Business, and the Pursuit of Wealth, “Charlie Munger will be seen as the proverbial enigma wrapped in a paradox—he is both a mystery and a contradiction at the same time.”

On one hand, Munger received an elite education and it shows: He went to Cal Tech to train as a meteorologist for the Second World War and then attended Harvard Law School and eventually opened his own law firm. That part of his success makes sense.

Yet here’s a man who never took a single course in economics, business, marketing, finance, psychology, or accounting, and managed to become one of the greatest, most admired, and most honorable businessmen of our age. He was noted by essentially all observers for the originality of his thoughts, especially about business and human behavior. You don’t learn that in law school, at Harvard or anywhere else.

Bill Gates said of him: “He is truly the broadest thinker I have ever encountered.” His business partner Warren Buffett put it another way: “He comes equipped for rationality… I would say that to try and typecast Charlie in terms of any other human that I can think of, no one would fit. He’s got his own mold.”

How does such an extreme result happen? How is such an original and unduly capable mind formed? In the case of Munger, it’s clearly a combination of unusual genetics and an unusual approach to learning and life.

While we can’t have his genetics, we can try to steal his approach to rationality. There’s almost no limit to the amount one could learn from studying the Munger mind, so let’s at least start with a rundown of some of his best ideas.

***

Wisdom and Circles of Competence

“Knowing what you don’t know is more useful than being brilliant.”
“Acknowledging what you don’t know is the dawning of wisdom.”

Identify your circle of competence and use your knowledge, when possible, to stay away from things you don’t understand. There are no points for difficulty at work or in life.  Avoiding stupidity is easier than seeking brilliance.

Of course this principle relates to another of Munger’s sayings: “People are trying to be smart—all I am trying to do is not to be idiotic, but it’s harder than most people think.”

And this reminds me of perhaps my favorite Mungerism of all time, the very quote that sits right beside my desk:

“It is remarkable how much long-term advantage people like us have gotten by trying to be consistently not stupid, instead of trying to be very intelligent.”

***

Divergence

“Mimicking the herd invites regression to the mean.”

Here’s a simple axiom to live by: If you do what everyone else does, you’re going to get the same results that everyone else gets. This means that, taking out luck (good or bad), if you act average, you’re going to be average. If you want to move away from average, you must diverge. You must be different. And if you want to outperform others, you must be different and correct. As Munger would say, “How could it be otherwise?”

***

Know When to Fold ’Em

“Life, in part, is like a poker game, wherein you have to learn to quit sometimes when holding a much-loved hand—you must learn to handle mistakes and new facts that change the odds.”

Mistakes are an opportunity to grow. How we handle adversity is up to us. This is how we become personally antifragile.

***

False Models

Echoing Einstein, who said that “Not everything that counts can be counted, and not everything that can be counted counts,” Munger said this about his and Buffett’s shift to acquiring high-quality businesses for Berkshire Hathaway:

“Once we’d gotten over the hurdle of recognizing that a thing could be a bargain based on quantitative measures that would have horrified Graham, we started thinking about better businesses.”

***

Being Lazy

“Sit on your ass. You’re paying less to brokers, you’re listening to less nonsense, and if it works, the tax system gives you an extra one, two, or three percentage points per annum.”

Time is a friend to a good business and the enemy of the poor business. It’s also the friend of knowledge and the enemy of the new and novel. As Seneca said, “Time discovers truth.”

***

Investing Is a Perimutuel System

“You’re looking for a mispriced gamble,” says Munger. “That’s what investing is. And you have to know enough to know whether the gamble is mispriced. That’s value investing.”  At another time, he added: “You should remember that good ideas are rare— when the odds are greatly in your favor, bet heavily.”

May the odds forever be in your favor. Actually, learning properly is one way you can tilt the odds in your favor.

***

Focus

When asked about his success, Munger says, “I succeeded because I have a long attention span.”

Long attention spans allow for a deep understanding of subjects. When combined with deliberate practice, focus allows you to increase your skills and get out of your rut. The Art of Focus is a divergent and correct strategy that can help you identify where the leverage points are and apply your efforts toward them.

***

Fake Knowledge

“Smart people aren’t exempt from professional disasters from overconfidence.”

We’re so used to outsourcing our thinking to others that we’ve forgotten what it’s like to really understand something from all perspectives. We’ve forgotten just how much work that takes. The path of least resistance, however, is just a click away. Fake knowledge, which comes from reading headlines and skimming the news, seems harmless, but it’s not. It makes us overconfident. It’s better to remember a simple trick: anything you’re getting easily through Google or Twitter is likely to be widely known and should not be given undue weight.

However, Munger adds, “If people weren’t wrong so often, we wouldn’t be so rich.”

***

Sit Quietly

Echoing Pascal, who said some version of “All of humanity’s problems stem from man’s inability to sit quietly in a room alone,” Munger adds an investing twist: “It’s waiting that helps you as an investor, and a lot of people just can’t stand to wait.”

The ability to be alone with your thoughts and turn ideas over and over, without giving in to Do Something syndrome, affects so many of us. A perfectly reasonable option is to hold your ground and await more information.

***

Deal With Reality

“I think that one should recognize reality even when one doesn’t like it; indeed, especially when one doesn’t like it.”

Munger clearly learned from Joseph Tussman’s wisdom. This means facing harsh truths that you might prefer to ignore. It means meeting the world on the world’s terms, not according to how you wish it would be. If this causes temporary pain, so be it. “Your pain,” writes Kahil Gibran in The Prophet, “is the breaking of the shell that encloses your understanding.”

***

There Is No Free Lunch

We like quick solutions that don’t require a lot of effort. We’re drawn to the modern equivalent of an old hustler selling an all-curing tonic. However, the world does not work that way. Munger expands:

“There isn’t a single formula. You need to know a lot about business and human nature and the numbers… It is unreasonable to expect that there is a magic system that will do it for you.”

Acquiring knowledge is hard work. It’s reading and adding to your knowledge so it compounds. It’s going deep and developing fluency, something Darwin knew well.

***

Maximization/Minimization

“In business we often find that the winning system goes almost ridiculously far in maximizing and or minimizing one or a few variables—like the discount warehouses of Costco.”

When everything is a priority, nothing is a priority. Attempting to maximize competing variables is a recipe for disaster. Picking one variable and relentlessly focusing on it, which is an effective strategy, diverges from the norm. It’s hard to compete with businesses that have correctly identified the right variables to maximize or minimize. When you focus on one variable, you’ll increase the odds that you’re quick and nimble — and can respond to changes in the terrain.

***

Map and Terrain

“At Berkshire there has never been a master plan. Anyone who wanted to do it, we fired because it takes on a life of its own and doesn’t cover new reality. We want people taking into account new information.”

Plans are maps that we become attached to. Once we’ve told everyone there is a plan and what that plan is, especially multi-year plans, we’re psychologically more likely to stick to it because coming out and changing it would be admitting we were wrong. This makes it harder for us to change our strategies when we need to, so we’re stacking the odds against ourselves. Detailed five-year plans (that will clearly be wrong) are as disastrous as overly general five-year plans (which can never be wrong).

Scrap the plan, isolate the key variables that you need to maximize and minimize, and follow the agile path blazed by Henry Singleton and followed by Buffett and Munger.

***

The Keys to Good Government

There are three keys: honesty, effectiveness, and efficiency. Munger says:

“In a democracy, everyone takes turns. But if you really want a lot of wisdom, it’s better to concentrate decisions and process in one person. It’s no accident that Singapore has a much better record, given where it started, than the United States. There, power was concentrated in an enormously talented person, Lee Kuan Yew, who was the Warren Buffett of Singapore.”

Lee Kuan Yew put it this way: “With few exceptions, democracy has not brought good government to new developing countries. … What Asians value may not necessarily be what Americans or Europeans value. Westerners value the freedoms and liberties of the individual. As an Asian of Chinese cultural background, my values are for a government which is honest, effective, and efficient.”

***

One Step At a Time

“Spend each day trying to be a little wiser than you were when you woke up. Discharge your duties faithfully and well. Slug it out one inch at a time, day by day. At the end of the day—if you live long enough—most people get what they deserve.”

An incremental approach to life reminds one of the nature of compounding. There will always be someone going faster than you, but you can learn from the Darwinian guide to overachieving your natural IQ. In order for this approach to be effective, you need a long axis of time as well as continuous incremental progress.

***

Getting Rich

“The desire to get rich fast is pretty dangerous.” 

Getting rich is a function of being happy with what you have, spending less than you make, and time.

***

Mental Models

“Know the big ideas in the big disciplines and use them routinely—all of them, not just a few.”

Mental models are the big ideas from multiple disciplines. While most people agree that these are worth knowing, they often think they can identify which models will add the most value, and in so doing they miss something important. There is a reason that the “know-nothing” index fund almost always beats the investors who think they know. Understanding this idea in greater detail will change a lot of things, including how you read. Acquiring the big ideas — without selectivity — is the way to mimic a know-nothing index fund.

***

Know-it-alls

“I try to get rid of people who always confidently answer questions about which they don’t have any real knowledge.”

Few things have made as much of a difference in my life as systemically removing (and when that’s not possible, reducing the importance of) people who think they know the answer to everything.

***

Stoic Resolve

“There’s no way that you can live an adequate life without many mistakes. In fact, one trick in life is to get so you can handle mistakes. Failure to handle psychological denial is a common way for people to go broke.”

While we all make mistakes, it’s how we respond to failure that defines us.

***

Thinking

“We all are learning, modifying, or destroying ideas all the time. Rapid destruction of your ideas when the time is right is one of the most valuable qualities you can acquire. You must force yourself to consider arguments on the other side.”

“It’s bad to have an opinion you’re proud of if you can’t state the arguments for the other side better than your opponents. This is a great mental discipline.”

Thinking is a lot of work. “My first thought,” William Deresiewicz said in one of my favorite speeches, “is never my best thought. My first thought is always someone else’s; it’s always what I’ve already heard about the subject, always the conventional wisdom.”

***

Choose Your Associates Wisely

“Oh, it’s just so useful dealing with people you can trust and getting all the others the hell out of your life. It ought to be taught as a catechism. … [W]ise people want to avoid other people who are just total rat poison, and there are a lot of them.”

No comment needed there.

***

Complement The Tao of Charlie Munger with this excellent Peter Bevelin interview.

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Philosopher Kahlil Gibran on the Relationship between Vulnerability and Love

Reading Time: 2 minutes

In 1923 the Lebanese-American artist, poet, and philosopher Kahlil Gibran (1883–1931) published his masterpiece, The Prophet, which endures as a timeless classic meditation on living.

The essence of his brilliance is captured in the section on love.

So much of meaning in life comes from the willingness to lean into things that make us vulnerable.

One of the biggest lessons I have learned about being the friend that my friends deserve, is that I have to put myself out there. It’s the exposure of the self, not the protection, that creates meaning.

When love beckons to you, follow him,
Though his ways are hard and steep.
And when his wings enfold you yield to him,
Though the sword hidden among his pinions may wound you.
And when he speaks to you believe in him,
Though his voice may shatter your dreams as the north wind lays waste the garden.

For even as love crowns you so shall he crucify you. Even as he is for your growth so is he for your pruning.

A few sentences later, he hits on the need for vulnerability.

[I]f in your fear you would seek only love’s peace and love’s pleasure,
Then it is better for you that you cover your nakedness and pass out of love’s threshing-floor,
Into the seasonless world where you shall laugh, but not all of your laughter and weep, but not all of your tears.

As for finding love, we cannot direct the course.

And think not you can direct the course of love, for love, if it finds you worthy, directs your course.

As for your desires, turning into vulnerability, Gibran, who echoes Alfred Lord Tennyson’s sentiment when he said ‘Tis better to have loved and lost than never to have loved at all,’ writes:

To melt and be like a running brook that sings its melody to the night.
To know the pain of too much tenderness.
To be wounded by your own understanding of love;
And to bleed willingly and joyfully.
To wake at dawn with a winged hear and give thanks for another day of loving.

Love is process, not an outcome.

In The Prophet, Gibran goes on to explore the tension in love between intimacy and independence. Complement with Richard Feynman’s beautiful Letter to his wife Arlene.

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Racking The Shotgun: Quickly Sorting Those Who Know from Those Who Act Like They Know

Reading Time: 2 minutes

One of the great challenges we all face in life is distinguishing between two classes of people: people who know and people who sound like they know. It’s called the Batesian Mimicry problem and once you see it, you’ll start to notice it everywhere from colleagues and boardrooms to talking pundits on TV.

From Elon Musk’s advice on how to tell if people are lying to how to win an argument, the problem is so pervasive and so fundamental to succeeding in life that I keep a running file whenever people have a clever way to help quickly determine who knows. An unlikely book offered another technique called Racking the Shotgun and it comes from a professional gambler.

80/20 Sales and Marketing by Perry Marshall tells the story of John Paul Mendocha, a friend of Marshall’s. At age 17, Mendocha dropped out of high school, hitchhiked to Vegas, and became a professional gambler.

A teenager, however, needs some street smarts so he found himself someone who would take him under his wing for a split of the profits. Mendocha found Rob, a seasoned gambler.

“Son, the first lesson about gambling is, you have to play games you can win. You need to play people who are not as good at poker as you are. Those people are called marks.”

One time, Rob wanted to show John something so they got into the car and headed to the Cabaret. They walked in and sat down amongst the blaring music, dancing women, and copious amounts of alcohol. Rob had a sawed off shotgun in his coat.

He pulled the shotgun out, slipped it under the table. He pressed the lever, popping the chamber open as if to load it. But instead of inserting a shell, he loudly snapped it back shut, with that sharp, signature ratcheting sound shotguns are famous for— what enthusiasts call “racking the shotgun.”

A few heads in the crowd twisted around, trying to see where the racking sound had come from. Everyone else was oblivious, absorbed in their haze of nightclub revelry. Then Rob slipped the gun back into his jacket.

The owner of the club came over to their table and asked if everything was ok.

“Everything’s fine, Bill. Just teaching the lad a lesson,” Rob replied. Then he leaned over and said to John, “John, the people who turned around— those guys are NOT marks. Do not play poker with them. “John, your job is to play cards with everybody else.”

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