President of Financial Examinations & Evaluations, Inc.
We enjoy both so much. The enchantment of a new romance, the spell cast by amazing locations, the charm in sitting on a porch swing with your loved one. The fun of deception at a magic show, hide and go seek with the kids, or even a book with great plot twists.
Either way we are being led in our choice making not by our own cognitive wits but by circumstances or the will of others. Our power over our own cognitive choice making processes are being subverted.
The process of choice making is difficult. There is so much information, much of it noise. Thus , as opposed to sorting through all of this informational noise, we use our wits to make choices. Yet our wits are subject to being fiddled through management of the information and how the information is delivered.
We use message filters to make choices. Filters in choice making are part of who and what we are. Every person sees an event thought their own filter based upon their life’s experiences. You cannot stop this, it doesn’t matter because we are already and always are filtering. It is a default setting. Understanding how these filters work is understanding the influence over our choice making of heuristics and biases.
Heuristics - Greek: "Εὑρίσκω", to find or discover,
Refers to experience-based techniques for problem solving, learning, and discovery. Heuristic methods are used to speed up the process of finding a satisfactory solution. For example; using a "rule of thumb", an educated guess, an intuitive judgment, or common sense.
Biases - A cognitive bias is the human tendency to make systematic decisions in certain circumstances based on cognitive factors (something immaterial that contributes to producing a result) rather than evidence.
Such biases can result from information-processing shortcuts called heuristics. They include errors in judgment, social attribution, and memory. Cognitive biases are a common part of human thought, and are the root to the damage to the reliability of anecdotal and witness based evidence.
Our heuristics and biases are most at work when we are using our guts or our hunches. This is where we are reacting to the message more by form than by content. Daniel Kahneman, a Noble Laureate in economics, refers to this gut based choice making process as automatic or thinking fast and refers to more deliberate choice making process thinking as thinking slow.
A quick example is as follows - choice the correct answer now.
19 X 29 = 2,601 or 321, 551, 81?
You can eliminate two quickly but what about the other two? The quick thinking is what cuts the first two but you have to think slowly and work on the other two.
We make choice based upon perception and intuition. Our choices are influenced both by process and to a lesser degree content. Advertisers, marketing designers, branding experts and conmen are all very aware of how we make our choices.
For example, if you work at a hospital and you are forced to choose between two different medical protocols. In the red protocol 200 people will be saved and if you chose the blue protocol there is a one third probability that 600 people will be saved and a two-thirds probability that no people will be saved.
If the red protocol is chosen 400 people will die, if the blue protocol is chosen there is a one-third probability that nobody will die and a two thirds that 600 people will die.
A clear majority of those polled chose the Blue Protocol - the risk seeking option. There is no substantive difference between the protocols yet they evidently produce different choice making preferences.
There are many different ways to get you to make the choice that the presenter is desirous of having you make. Two examples I have seen at play in advertising and marketing companies were involved with sales of smoke detectors and the Plaid-Clad car salesman.
A marketing agency offered to pay a local television station a slight premium on their advertising rate card if they, the television station, would only run the smoke detector commercials after they ran a story about a house fire on the news. If there was a death in the house fire they were requested to run the commercial before the news segment as well as right after the story was presented. This plays on the bias of accessibility - the viewer has just seen a story about a house fire or one about a house fire with a death - and here is a product - a smoke detector - that will help lower your perceived risk. The campaign was a massive success.
Plaid-Clad car salesman
If car salesmen seem to be cut from a common dye - it is because they are all trained in the same skills. They are trained to get you to say yes. They will ask you about your hobbies, and opinions. Just about any response you give they will respond in an agreeable fashion. We like people who agree with us. Try this when you have nothing else better to do - go to a car dealership and look at new cars - if it is a sunny day, tell how much you like rain, later tell them how much you like sunny days - but wait about seven minutes in between those two statements. Either way they will agree with you on two diametrically opposed statements - parts of them becoming anything you want. The key to the seven minutes is that is about how much time it takes the short-term memory to transfer material into the long-term memory and by the end of seven minutes they will have forgotten what you first said. After the initial acquaintance building, then the sale tactics begin. The Plaid-Clad salesman will ask you questions such as: Do you like this color? Do you like this model? Would you like to take this model for a test drive? Would you like a cup of coffee? Statistically, the more times the Plaid-Clad salesman can get you to say yes, the more likely your are to buy a car from them.
What are the strategies to avoid having your choices managed?
1. When possible avoid on the spot choices, defer so you have time to think.
This frustrates your children since they are experts on knowing and using your heuristics and biases to get you to make snap choices when you are not prepared.
2. Work on your awareness of your heuristics and biases as we all have them but we need to be aware of them.
Ask your friends, spouse and - yep the children.
3. Seek outside informed support in choice making.
“Informed support” is to be taken in the most narrow of interpretations - for example do not ask accountants or lawyers about investment - ask other investment professionals. Do not ask the person who has been married five times about marriage problems, ask a marriage counselor.
4. To choose is not to decide, for if you choose wrong choose again.
Insecticide kills insects and a homicide is the death of a human and to decide kills choice - keep choices alive and informed.
5. I strongly recommend the writings of Daniel Kahneman and Amos Tversky.
Even a small sampling of their writings or the pod casts you might find is a worthwhile investment in your knowledge.
Enchantment is a feeling of being in a sense of bewitchment detached from reality. Deceit is a mystification to propagate untruths. Yet in practice they are the same, only our opinion of the results of our choices makes these two states different.
Everything that deceives may be said to enchant. - Plato
Mr. Files is a published author of five books, in particular "Due Diligence for the Financial Professional, 2nd edition 2010" and "Money and Budgets" other writing and material can be found at .https://www.feeinc.com/media.php. Mr. Files is an international speaker on these topics.
FE&E, Inc. is an international investigative firm specializing in, fraud prevention, asset recovery, due diligence, anti money laundering and intellectual property.
As a financial industry insider for over 30 years he is keenly aware of the type, and accuracy of the information required to make decisions. Mr. Files has been the case manager on fraud investigations ranging from tens of thousands of dollars to over 3 billion. As an international expert on due diligence and Intellectual Property and Critical Information (IPCI) he is regularly sought for those cases that bedevil the desktop practitioners.
This article is courtesy of the Top 1% Club and the Top 1% Club Mentor Gail Kasper. For additional information on Gail Kasper, her television appearances and speaking engagements, please visit gailkasper.com.