Thursday, December 20, 2012

It’s the uncertainty, stupid

Bill Clinton won his first campaign to become President of the US by focusing on what would really influence voters—the economy. Concerned about the fate of an environmental issue? Don’t follow a standard tactic of sensationalizing the problem or calling for patience and further study, it’s the uncertainty, stupid! (please know that the “stupid” is rhetorical)

In an earlier blog, I described my experience learning lessons for fisheries management from rocket science. During that time, I stumbled across a paper in the field of behavioral economics. This field focuses on how people perceive and respond to uncertainty and has inspired my studies, research, and work ever since. Historically, economic models assumed people maximize their profits (or utilities in more general models). Daniel Kahneman and Amos Tversky, both research psychologists, began a Nobel Prize-garnering revolution by showing that that people often act in predictably irrational ways, particularly when facing uncertain consequences. You see, we tend to think differently when choosing between future A and future B than when choosing between options that will influence the probabilities that we get future A or B. Drs. Kahneman and Tversky referred to these choices as gambles, and it doesn’t take a cognitive psychologist to know that people are irrational gamblers.

Along with Dan Lovallo, Dr. Kahneman wrote a paper about the implications of these behaviors for organizational decision making. It turns out that corporate managers, like other people, are prone to be overly conservative when they fully recognize an outcome is uncertain, but more often ignore or downplay uncertainty altogether. When I first read their paper, I found it hard to remember that the subject was corporations. Fisheries managers and interest groups lobbying them were behaving in the same way. Before the article, I tended to blame dirty politics, self-serving scientists and managers, and even the media for fisheries problems. This article showed me that normal functioning of the human brain just might be responsible for fisheries failures. It makes perfect sense that some of us ignore environmental concerns while others portray these concerns as if the world is about to end. It’s the way our brains are wired. The key question, and my biggest professional passion, is how to get people to recognize and respond to uncertainty in a more thoughtful way. In order to make good policy, it would seem we need a rocket scientist but also a psychologist.

Encouragingly, people do not always fail when it comes to recognizing and responding to uncertainty. Daniel Kahneman’s most recent work is Thinking, Fast and Slow, a book in which he suggests we have two modes of thinking. Fast thinking is reflexive, emotional, and prone to biases, while slow thinking is more logical and deliberative. When you really look, signs of slow thinking are common. I’ve found them in cases ranging from the obvious, for example investment banking and bridge design; to the unexpected, for example indigenous natural resource management practices and even survival stories. To quote Rosie the Riveter, “We can do it!” The question is, how?

I’ve already shared some thoughts on this topic, but next week I will give an extended example. Rather than focus on my own work, or even on the world of fisheries, I will demonstrate the generality of my approach by discussing climate change/global warming. In anticipation, I ask you this: What’s your favorite explanation for why climate change is such a divisive subject?

Please share your thoughts in the comments section. I invite you to answer the question, propose subjects for future blogs, or just say hi. I’d love to have this blog evolve into a dialog.

Happy holidays,

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