Some recommended reading. I just finished rereading a book, published in 2017, called The Ostrich Paradox. It examines why we habitually under-prepare for disasters. Why do some people, for instance:
- Fail to heed hurricane evacuation warnings?
- Buy homes in flood zones without flood insurance?
- Ride motorcycles without helmets?
- Think they’re immune to pandemics?
Why Instinct Sometimes Overrules Reason
This book explains innate cognitive biases that often cause instinct to overrule reason.
To illustrate these biases, the authors look at a specific subset of decisions involving risks, such as flooding and earthquakes. The probability of such disasters is extremely low but the consequences extremely high. These represent rare threats for which we have little stored knowledge.
Six Innate Cognitive Biases
The book focuses on six cognitive biases that the authors characterize as “Our Innate Engineering.” Those biases influence our decision making in such cases.
Myopia – A tendency to focus on “here and now” costs when appraising the value of long-term protective investments. “I’m really going to have to scrimp to afford that flood insurance for a flood that may never come in my lifetime.”
Amnesia – A tendency to forget too quickly the pain of past disasters. “Harvey was two years ago. I don’t want to worry about flood mitigation now. It just reminds me of the pain.”
Optimism – A tendency to underestimate losses that could result from rare, future hazards. “Harvey was a 1000-year storm. You can’t plan for one of those.”
Inertia – A tendency to maintain the status quo or chose a default option when making difficult decisions with a high level of uncertainty. “I just can’t figure out whether these new flood maps are valid. I’m not going to buy that flood insurance now.”
Simplification – A tendency to examine a subset of factors when making complex choices involving high risk. “I never flooded before, even during Harvey. Why buy flood insurance now?”
Herding – A tendency to base choices on what people around you are doing. “None of my neighbors have flood insurance. Why should I?”
Finding Ways to Overcome Your Biases
The theory behind the book: that by recognizing our own cognitive biases, we may be able to overcome them.
After the introduction, the authors divide the book into two main parts.
The first devotes a chapter to each of the biases. Within each chapter they give dozens of examples and present academic studies that illustrate the difficulty people have making rational choices about these rare events.
The second devotes three chapters to strategies that can help us overcome them.
About the Authors
The authors are two professors from the Wharton School of Business at the University of Pennsylvania: Robert Meyer and Howard Kunreuther. They both specialize in risk management and decision processes. Wharton ranks as one of the nation’s leading business schools.
The writing can get dense at times. It’s not for the feint of heart or the casually interested. Primary audiences include academics, insurance executives, government leaders, policy makers, emergency preparedness planners, etc.
Afternoon Read That Could Make You a Better Decision Maker
That said, with enough coffee, most people could wade through this in an afternoon during the virus lockdown and get a lot out of it. It’s available for $1.99 as an e-book from Amazon.
The primary value: it helps us understand HOW we think so that we can understand WHY we make the decisions we do.
As I read it, I found myself replaying some of my own past decisions and recognizing myself in several examples. I also reflected on the dozens of flood victims I have interviewed who replayed similar arguments…with regret.
The Ostrich Paradox may help make you a better decision maker. Or help you convince other people to make better decisions.
For instance, do you have a family member who thinks he or she is immune to the corona virus?
That said, I will pass along some wisdom from an ER Nurse, based on real life examples. “Now’s not the time to learn how to ride an ATV, use a chainsaw or climb a ladder.”
Stay in. Stay safe. Stay healthy.
Posted by Bob Rehak on 4/9/2020
954 Days since Hurricane Harvey