How Risky Is It, Really?

Why our fears don't always match the facts

Want to Make Better Decisions? Patience!

It's easier to make up your mind quickly. Problem is, that can lead to mistakes!

 If you devote the patience necessary to finish this short post, you will end up a better decision maker. But then, as you will discover in the paragraphs below, if you have that sort of patience, you are probably a better decision maker already.

We begin with a quiz, consisting of three classic questions from the study of cognition. Write your answers down.

 

(1) A bat and a ball cost $1.10 in total. The bat costs $1.00 more than the ball.

How much does the ball cost? _____ cents

 

(2) If it takes 5 machines 5 minutes to make 5 widgets, how long would it take

100 machines to make 100 widgets? _____ minutes

 

(3) In a lake, there is a patch of lily pads. Every day, the patch doubles in size.

If it takes 48 days for the patch to cover the entire lake, how long would it

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take for the patch to cover half of the lake? _____ days

 

Now simply circle the option you prefer;

a. $3400 this month or $3800 next month

b. $100 now or $140 next year

c. $40 immediately or $1000 in 10 years

d. $100 now or $20 every year for 7 years

e. $400 now or $100 every year for 10 years

 

How do you think you did on the first quiz? There are seemingly obvious answers, right?

1. The ball costs 10 cents.

2. It would take machines 100 minutes for 100 machines to make 100 widgets.

3. It would take 24 days for the patch of lily pads to cover half the lake if it took 48 to cover the whole thing.

The only problem is, those easy obvious answers are wrong.

1. The ball costs 5 cents (the bat is one dollar more at $1.05, so they total $1.10)

2. If 5 machines could churn out 5 widgets in 5 minutes, then 100 machines could churn out 100 widgets in…five minutes.

3. A patch of lily pads that doubles in size every day and covers the whole lake in 48 days, would have covered half of it in 47 days, doubling to cover the rest on the 48th.

The interesting thing is, the way you answered the questions in the first quiz predicts the choices you made in the second. If you answered the first 3 questions with the easy, obvious, but WRONG answers, you were far more likely to accept less money now rather than wait to get more money later. On the other hand, if you were willing to go a little slower with the first three questions and make the mental effort necessary to figure out the correct answers, you were more likely to have chosen the greater albeit delayed benefits in the second quiz. In other words, a slower more patient critical thinker is more likely to make better decisions!

Shane Fredericks put more than 3,000 university students at various schools through the same exercise you just did. He found that those who gave the quick/easy/wrong answers for the first three questions consistently made worse choices about money. A higher percentage of the people who got the answers to the first three questions right chose the more lucrative financial option

 %  who chose the more lucrative option

  among the financial choices listed above

  % who gave the easy        % who gave correct

wrong answers in Quiz 1     answers in Quiz 1

a.        35%                                            60%

b.        22%                                            37%

c.        50%                                            59%

d.        28%                                            43%

e.        64%                                            72%

 

Now what does all this have to do with patience? Careful critical thinking takes work. It takes time, and it literally also takes calories, to “pay” attention, and the brain has developed a faster more intuitive sort of thinking to minimize those costs. This sort of cognition was originally labeled System One in “Individual differences in reasoning: Implications for the rationality debate?” a famous paper by Keith Stanowich and Richard West.  System One cognition is faster, more intuitive, and relies on emotions and instincts and subconscious heuristics and biases - mental shortcuts - for quickly turning partial information into our judgments and decisions. Back when calories were harder to come by, and split-second decisions could mean the difference between life and death, this sort of decision making probably had important survival advantages. System Two is slower, more purposeful conscious careful critical analysis. It’s the sort of cognition required to come up with the correct answers to Quiz One. In truth we use both systems all the time. But between the two, System One often has the greater influence.

Now suppose you have to make a judgment or decision about some risk (a risk that isn’t immediate, like a snake crawling up your leg or somebody pointing a gun at your head): Is it dangerous? How dangerous is it? What should you do about it? Most of us will instinctively rely on System One to come up with a quick call that may seem right, may feel right, but which may be wrong. Dangerously wrong. Instead, we need to remember that System One, the kind of thinking that German psychologist Gird Girgerenzer calls ‘fast and frugal’, is sometimes prone to error that can lead to dangerous choices and behaviors. If we remember that…that the way we think about risk can be risky all by itself…we can protect ourselves by simply taking a little more time and devoting a bit more effort to think things through.

Patience is more than one of the seven heavenly virtues. It’s a really good way to keep ourselves safer and healthier.

 

 

David Ropeik is the author of How Risky Is It, Really?, an Instructor at Harvard University Extension School, and a risk-communication consultant.

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