The prediction battle
The future has rarely been more uncertain than at present, and when we try to predict what will happen, we are subject to conflicting angles that battle it out
It is difficult to make predictions, especially about the future, a Danish proverb goes (sometimes attributed to Danish physicist Niels Bohr). Nevertheless, we make predictions all the time: we work late to complete a piece of work for our boss because we predict that otherwise she may be unhappy (and we want to avoid that, because we predict otherwise we may receive a poor appraisal, which we predict will mean we don’t get a pay rise). We go to the supermarket at 8am on a Saturday because we predict that at 10am it’ll be unpleasantly busy. (As I am writing this, I am confidently predicting that this introductory paragraph will help you get the picture as you read it.)
For many aspects of our future, it is actually no so hard to make reasonably accurate predictions. But sometimes, the uncertainty is rather larger. Let’s look at two questions that preoccupy many people these days.
The first one relates to the ending of the lockdown situation that prevails in dozens of countries. Measures were taken in haste as the number of COVID-19 cases increased exponentially (a phenomenon which most of us still find it difficult to get our heads around), with little concern for the consequences over the long term. Social distancing meant many businesses had to close down, and governments were forced to swiftly institute schemes to mitigate the worst consequences of sudden mass unemployment. Several weeks into the lockdown, the full extent of the effects of these radical measures is becoming clear. It is hard to see how, with the inevitable extensive long-term damage, not just to the economy, but to public health and society at large too, sustaining the measures unchanged can be contemplated as a realistic scenario. But when will these measures be relaxed, and how? Is it a matter of weeks, months or more than a year?
The second question is how society will be have changed after the COVID-19 pandemic recedes. Will we swiftly return to our pre-corona ways, or have we collectively seen the light? Will we go back to commuting to work on packed roads and in packed public transport, or sticking to Zoom and working from home? Will we renounce our weekend trips to the seaside, our mid-season city-breaks and our exotic holidays, which so inflate our carbon footprint, and instead go for walks in the park with the family? Have we got enough of the relentless rat race of economic growth and globalization, and are we ready for a deliberate degrowth scenario, as a group of Dutch scientists argues in their manifesto?
If you were expecting answers to these questions from me, I am sorry to disappoint you. I am afraid I have nothing of value or relevance to say about these questions. Why am I finding it so difficult to predict what will and what won’t happen over the next few months and beyond? An accidental behavioural economist who teaches evidence-based decision making should be able to consider the best available evidence — from scientific to anecdotal — and on that basis make a respectable approximation, shouldn’t he?
Unfortunately, dispassionately considering evidence is not the only thing going on in our head, especially when there is a lot of uncertainty, and when what might happen matters deeply to us. There are different forces at work within our minds, battling to get our attention and get us to adopt a particular view of the future, and act accordingly.
We are emotional beings, and we care about what the future will bring. We want it to be good. So, a first pitfall to a decent prediction of the future is a force called wishful thinking. It is pleasant to imagine a future that corresponds with our desires. Emotions like desire and hope are powerful, and quite capable of seducing us into ignoring negative evidence, or even stopping us acquiring it in the first place. A prediction based on wishful thinking rather than evidence is, understandably, not particularly reliable. The opposite — it doesn’t have a name, but let’s call it fearful thinking — can be just as powerful: imagining the worst possible future. When we are waiting for a loved one to come home and they are late, we sometimes assume something terrible has happened, rather than that they simply lost track of time, or their phone battery died. But fear is no better as a reliable guide to predicting the future than hope.
So, could we not just learn to recognize wishful and fearful thinking? Not so fast: our internal cognitive circuitry has more strings to its bow. Meet the second force, motivated reasoning, the honourable cousin of wishful thinking. Just in case we would recognize a prediction as inspired by emotion, our mind wheels out a plausible argument, working back from the desired (or indeed the feared) outcome and adducing whatever evidence to support it. As Start Trek’s Spock might have said, “It’s reasoning, Jim, but not as we know it.” It may look like a good basis for predicting the future, but it is not.
More powerful still, though, than our desire for a pleasant future (or our fear for an awful one), is the sweet satisfaction of being able to say, “I knew it all along!”, or “I told you so!”. Our yearning to be right is a formidable force. We desperately want the future to be aligned with our present beliefs.
That is not so surprising. Imagine the opposite: we have certain beliefs about what will happen tomorrow and about how the people we work and live with will behave — and systematically what actually does occur is very different from what we expect. The mental stress would be intolerable, and it is difficult to see how we could function. Of course, the way to deal with this is to update our beliefs based on what we experience — and to some extent that is what we do. But as we observe more and more patterns that confirm our beliefs, our beliefs strengthen. We end up not so much “believing when we see it”, but “seeing it when we believe it”, as psychiatrist Ralph Lewis explains.
Seeking alignment between belief and reality is entirely sensible. Our beliefs are crucial in helping us predict the future, and plan our lives accordingly. We believe the sun will rise tomorrow, that the shops will be open on Saturday, that our salary will be paid at the end of the month, that our favourite TV show will be on tonight and so on. The more we align our beliefs with reality, the better this process works.
But our beliefs are also part of who we are, and we tend to protect them just like we protect our body. And then we work the wrong way round — we bend reality to fit our beliefs.
We tend to focus on evidence that confirms our beliefs, rather than what questions them. We imagine that we knew what was going to happen — after the event (regardless of what we believed before it). We post-rationalize decisions and misremember what actually drove us to make them. Thankfully, our beliefs are generally more often right than wrong, but we believe them to be right more than they actually are. This makes us overconfident predictors, especially when uncertainty is large.
It doesn’t have to be that way, though. When we see conflicting evidence, when we see people with deep expertise on a subject coming up with compelling, but conflicting arguments, that is a strong sign that we should be very wary of confidently predicting the future. That is the time when the different forces — what we want to happen, what we fear might happen, and wanting to be right — are ready to go into battle with dispassionate and unbiased consideration of the evidence, and when the chances of the latter to come out victorious are not good.
Perhaps it is better for that battle not to be fought at all.
Originally published at http://koenfucius.wordpress.com on April 24, 2020.
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