in Behavioral Economics

Unimpossibility

I’ve of late been putting an inordinate amount of time into philosophical texts. My current literary victim is Nassim Nicholas Taleb and his book, The Black SwanThe Wall Street Journal noted that “he writes in a style that owes as much to Stephen Colbert as it does to Michel de Montaigne.” I would have to agree.

Taleb’s black swan is in academia also referred to as a fat tail, and is the outlier that reintroduces luck and serendipity into the social sciences. Taleb seeks to explain the high impact, “impossible” events that defy our expectations of the material world and so take on the garb of a Power Law distribution. He as well examines humanity’s psychological bias and blindness toward such rare events, and in doing so seeks to answer why we’re so susceptible and blind to them.

Broadly the cognitive bias and, more specifically, the confirmation bias prove problematic as we try to understand the world we live in. By means of naïve empiricism we bipedal thinking things have a tendency to look for instances that confirm the narratives and stories and Platonic understandings of our world. The problem of course is that if you look for confirmation you can find it almost anywhere. Taleb argues that instead of deluding ourselves into thinking we’ve just aroused evidence for our correctness, we should rather scrape and claw and unearth those instances where our method or theory or course of action fails. It’s at that juncture that we actually learn something.

I’m going to try something different this time around and throw the question out to you, my readers. When have you found yourself susceptible to confirmation bias? Or, when you have taken the empiricist’s path and avoided the confirmation bias, and sought to falsify your theory rather than confirm it?

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