Gloom in the Forecast

On the TV game show Wheel of Fortune, the winning contestant always moves on to the bonus round. She has typically won several thousand dollars at this point, but the bonus prize always dwarfs the regular winnings: It might be a lump sum of $25,000 or a shiny new SUV. There is no risk. She must simply fill in the blanks between a few consonants and vowels to guess the bonus word.

But it’s hard. Contestants often lose the bonus round. And when they do, host Pat Sajak opens the envelope to reveal what the hapless wordsmith might have won had she been more clever. Twenty-five grand! The studio audience moans, and the camera zooms in on the contestant’s disappointment. But Pat always ends the show by saying something like this: “I’m sorry. I can’t really feel bad for Mary, because she is walking away with $8,600!” Helper Vanna White flashes a knowing smile as the credits roll.

Pat and Vanna are probably not aware of it, but they are demonstrating a fundamental principle of human psychology at the end of each day’s contest. People must confront disappointments and losses every day, and if we took each loss to heart we would be unhappy much of the time. But if Mary is like most of us, she is not going to leave the TV studio feeling bad about losing out on $25,000. She is going to leave feeling grateful for winning $8,600. Such is the power of the mind to “reframe” losing in an emotionally healthy way.

The problem is that we don’t know we have this skill. Psychologists have demonstrated time and again that we greatly exaggerate how badly even small setbacks are going to make us feel. As a result, we may unnecessarily make important life choices—about everything from health to finances to politics—in order to avoid risking the pain of loss.

Consider this recent experiment by Deborah Kermer and Timothy Wilson at the University of Virginia. The psychologists turned their lab into a makeshift casino. They staked gamblers to $5, and in a game against a computer they either won $4 or lost $4. Afterward they rated how they felt. Other participants didn’t actually play, but instead observed the game and predicted how they would feel if they won or lost in such a game of chance. The forecasters, as expected, said that their pain after a loss would far exceed their joy following a win. But in fact those who won were no happier than those who lost.

The scientists repeated the experiment with more favorable conditions. This time they had a 50 percent chance of winning $5 and a 50 percent of losing $3. That’s a good deal, but the gamblers didn’t like it. Indeed, when queried about various levels of risk, it turned out that on average they were only willing to risk $1.86 for the chance of winning $5. Only a small fraction were willing to risk even $3. As in the first study, the gamblers anticipated that the pain of losing would be much worse than the gratification of winning. And once again they were wrong. As reported in the August issue of the journal Psychological Science, the losers felt happier than they thought they would, both immediately after losing and later on.

But here’s the interesting part: The reason they were so far off in their emotional forecasting is that they failed to anticipate how they would mentally process the $3 loss. It’s a glass-half-full or glass-half-empty kind of situation. Those who in advance said they would be disappointed with a loss rarely mentioned words like profit or gain, even though they would be walking away with a $2 windfall even if they lost. Once they had actually lost, however, the gamblers’ most common thought was about the $2 profit. The memory of losing $3 faded rapidly as the gamblers reframed half-empty as half-full. But they had dramatically underestimated their own mind’s powerful ability to rationalize this bad experience.

Kermer and Wilson don't dispute that losses may sometimes be more emotionally powerful than gains. Negative events appear to be processed in different brain regions and trigger more intense biochemical activity. But unfortunately, we don't seem to be able to learn from our mistakes in emotional prediction, mostly because we're unaware of our psychological defenses.Consider the implications of this. In both these experiments, as in the bonus round of Wheel of Fortune, people are playing with someone else’s money. When we are playing with our own money, as in real life, we are probably going to be even more averse to risk and loss. Since we are so lousy at knowing our own coping skills, we are likely making choices every day that maximize neither our wealth nor our happiness. Viewed that way, life looks awfully like a wheel of misfortune.

For more insights into the quirks of human nature, visit the Association for Psychological Science website at www.psychologicalscience.org/onlyhuman.

Natural-born Actuaries

You’re on hold. You want to order tickets for Superman Returns, but you have to wait your turn in the telephone box office queue. You’ve already been waiting a full minute and are getting fidgety. How long is this wait going to take? I know, forever if you’re being subjected to the Muzak version of “Horse with No Name,” but let’s assume it’s not that painful. Three minutes? Seven? Is this mindless summer movie worth wasting eleven minutes on hold?

The people at Warner Bros Pictures sure hope so. While you’re tapping your fingers, some movie executive in Hollywood is rubbing his hands together as he scans the movie’s first week revenues: $84.2 million. And the summer is young. With dollar signs in his eyes, he tries to estimate the money his company will haul in when all is said and done. He envisions his career soaring by autumn.

These two scenarios, while quite different, both involve everyday predictions. Whether it’s as trivial as a movie queue or as big as a blockbuster business deal, people are making decisions all the time based on how their minds estimate things like time and money. And often we’re forced to make these decisions without much history to guide us. How good are we at this crucial cognitive skill?

The received wisdom has long been that we’re not at all good at it. Faced with uncertainty, people tend to fall back on error-prone rules and make predictions that are off the mark. At least in the laboratory. But this conclusion struck Brown University psychologist Thomas Griffiths as questionable, simply because we see people making smart decisions every day with little to go on. He decided to test the idea in the real world.

His study was fairly simple, though it involved complex mathematical modeling. He gave people limited information about a number of different topics, and then asked them to make predictions. For example, he told some people to imagine meeting a stranger who is 18 years old. Then he asked the subjects to predict how long a life this man would have: 39 years? 83? 96?. Insurance company actuaries are paid big bucks to do this kind of estimating all the time. Others were told that an Egyptian pharaoh had been ruling for 11 years. How long would he reign? Griffiths also used the waiting time and blockbuster scenarios, among others.

There is a well established and highly regarded computer modeling system that can make optimal predictions with whatever data is available. And it is sophisticated enough to know how to distinguish between one kind of prediction and another. That is, it uses one formula for something like gross movie receipts, because it has to accommodate the fact that most movies have modest earnings, while a few blockbusters make mongo bucks. It uses a very different formula to make actuarial predictions of death, because we know that all people live on average 75 years, plus or minus.

Griffiths fed real-life historical data on all these various events into the computer, and then compared people’s actual estimates to these computer-generated predictions. On a broad range of topics—including life spans and movie revenues--people’s predictions were indistinguishable from the computer’s. It seems we're actuaries and movie moguls by nature. What’s more, he reports in the journal Psychological Science, the statistical “shape” of the real-life forecasting indicated the people have implicit beliefs about things like movies and aging, and know intuitively that they cannot be treated the same: Not to put too fine point on it, dying is far more predictable than making blockbuster movies.

But the participants weren’t perfect in all their predictions, and their mistakes shed some light on the limits of everyday cognition. For example, they consistently overestimated the reigns of Egyptian pharaohs. Griffiths was intrigued by this error, and asked the participants afterward how many years they figured a typical pharaoh ruled. Most thought around 30 years, much too high. Interestingly, they had the general model for predicting pharaohs' reigns correct; that is, they didn’t lump pharaohs’ reigns with movies, predicting blockbusters and dogs. They knew reigns were more predictable than that, because of such things as death and rules of succession and so forth. But they were basing their predictions on modern monarchs, like Queen Elizabeth II, who live much longer than pharaohs did and appear to reign forever. If they had thought to factor in disease and the primitive health care of 4000 BC, they would have been right on the mark.

It’s also possible to use these findings the other way around, Griffiths notes. That is, people’s judgments can serve as a guide to their beliefs. Another common mistake in the study is illustrative in this way. Participants were told about a person who has been married 23 years, and asked how long they thought the marriage would last. The data were useless for the purposes of the study, because 53 percent specified not a number but “forever.” This syrupy finding actually does reflect the real-life fact that about half of marriages end in divorce, but it also reflects the power of our beliefs—or hopes—to trump our generally dispassionate predictive skills.

For more insights into human nature, visit the Association for Psychological Science website at www.psychologicalscience.org/onlyhuman.

Garfloms and Pangolins

Consider this rather wild scenario. Imagine you are a very early human, trying to eke out a living on the savannahs of eastern Africa. You wake up one morning and head out to forage some breakfast, but you discover that your path is blocked by a robot. That’s right, a gleaming silver robot, with lots of knobs and flashing lights. What do you do?

Well first off, you’ve got to make sense of this thing. Remember, you’re a primitive thinker. You’ve got a couple hundred thousand years of evolving to do before you’ll even know the word robot, much less what an algorithm is. But right now your primitive brain wants to put it in a category. So what do you ask yourself? Do you wonder how it has sex? Or how and what it eats? Or do you instinctively ask yourself: What is this thing’s purpose? How can it serve me?

Psychologists study this question. Well, not this exact question, because that would be impossible and silly. But they do want to know how the modern human mind deals with novelty—basically how we discover the world and put it into some kind of sensible order. What do we know intuitively? One crucial part of that discovery process is learning to tell the difference between two of life’s biggest categories of things: animals and artifacts. How do we sort them out in a meaningful way?

To explore this basic mental process, psychologists study the minds of preschoolers who are just beginning to make sense of unfamiliar things. Yale University’s Marissa Greif and her colleagues showed a group of preschool children pictures of both animals and man-made objects. The animals were real, but unfamiliar, even to many adults: pangolins, for example, and saigas. (Check your dictionary.) The objects were made-up, complete with names and purposes: A garflom, for instance, looks like a wooden foot massager, but its official purpose for the experiment was to flatten towels. A riepank (which looks awfully like a woodworker’s C-clamp) is used to make holes in playdough.

The children, who averaged about 4 ½ years old, were encouraged to ask questions about these things. Their questions (and guesses) were revealing. For example, when the kids asked about action, some questions were appropriate for either an animal or artifact (Does it turn?), while others would only be asked sensibly of animals (Does it climb trees?) or artifacts (Is it for cutting?). As reported in the journal Psychological Science, the children never asked inappropriate questions of either animals or objects. They never asked of a tarsier or pangolin: How does it work? Similarly, they never asked how riepanks reproduce or what garfloms eat, though they did ask such survival questions of the unfamiliar animals.

What this suggests to the scientists is that children have a rich and intuitive understanding of these two fundamental categories of things in the world. At four they are too young to articulate this sensibility, but they know when things have been designed for a purpose, and when they have not. It appears that humans have an autonomous biological thought process for sizing up other creatures, and the only relevant traits in this view are survival traits. This is probably a legacy from those ancient ancestors, who by the way would have known instinctively that a robot is a mere tool, there only for your benefit.


For more insights into human nature, visit the Association for Psychological Science website at www.psychologicalscience.org/onlyhuman.