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Reasons for despair: confidence is better than competence.

by Colman Fri Jul 31st, 2009 at 04:37:36 AM EST

Why are we still listening to the fools who got us into the situation we're in? From the Irish Times:

IT IS AN often-noted but rarely understood phenomenon: the significant number of people who manage to earn a living, often a handsome living, by being wrong. Not always wrong, necessarily, but wrong enough, frequently enough, to warrant the description wrong-headed. We see evidence of it everywhere, from those sporting commentators who consistently struggle to accurately predict a result (“Manchester United have way too much for this Barcelona team” – often heard in May 2009) to the financial advisers whose advice proved very costly indeed (“You can’t go wrong by investing in property and bank shares” – often heard from 1998 to 2007).

Why, one might reasonably ask, are so many of these people still paid to offer their opinions or advice, despite having a demonstrably flawed track record? Well here’s the science bit – research by Prof Don Moore of Carnegie Mellon University in Pittsburgh, Pennsylvania, shows that given the choice between two people offering advice, we’ll tend to go with the more confident source, even if their track record is less reliable. At a symposium in San Francisco last month, quite brilliantly called “Often in Error, Rarely in Doubt”, Moore gave a paper describing how “When advisers must compete with each other, we find that the confidence they claim escalates over time. This overprecision helps advisers sell their advice.”

This goes some way towards explaining why a characteristic shared by many of these wrong-headed “experts” is an overweening self-confidence. All those brass-necked pundits whose self-assurance seems inversely proportional to their wisdom are merely the inevitable result of free markets, because selling certainty is easier than selling nuanced opinions that embrace complexity and doubt.

It's better to seem certain than to be right, even though you've a record of being wrong. Humans are broken.

I regrettably experience that all the time at the office.

Earth provides enough to satisfy every man's need, but not every man's greed. Gandhi
by Cyrille (cyrillev domain yahoo.fr) on Fri Jul 31st, 2009 at 05:39:21 AM EST
is very important: when people make very specific claims, they seem to be taken more seriously.

Thus the invasion of quantitative economics, rankings, and numbers that "collapse" a lot of inforation into one easily identifiable quantity (stock price, rating, risk-weighted return on equity, growth rate, ...)

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Fri Jul 31st, 2009 at 05:45:51 AM EST
I've though about this too: whenever someone claims that policy X will save 23,9478 millions, you can be absolutley sure they are wrong.

How this has come to pass I don't know, I remember a lot of effort was put on learning significant numbers and rounding back in high school.

Peak oil is not an energy crisis. It is a liquid fuel crisis.

by Starvid on Fri Jul 31st, 2009 at 10:32:44 AM EST
[ Parent ]
Making estimates is hard. It means that you have to explicitly consider your assumptions and be able to build a toy model.

Mindlessly taking the numbers you are being fed and putting them into an algorithm that you don't really need to understand is easy.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Fri Jul 31st, 2009 at 10:38:23 AM EST
[ Parent ]
And then , on the top of the affective dimension which makes us tend to spontaneously trust more self-confident people (it was probably a positive factor for evolution when we were hunter-gatherers), there is the cognitive dimension. To be right, you have to take into account the complexity of reality and the uncertainty of the knowledge we can have of it, whereas to be wrong, you don't have to bother with complexity. As Alexis de Tocqueville noted long ago: « une idée fausse, mais claire et précise, aura toujours plus de puissance dans le monde qu'une idée vraie, mais complexe » (an idea that is wrong, but clear and precise will always be more powerful than an idea that is right, but complex)...

"Dieu se rit des hommes qui se plaignent des conséquences alors qu'ils en chérissent les causes" Jacques-Bénigne Bossuet
by Melanchthon on Fri Jul 31st, 2009 at 06:19:43 AM EST
True, but there's an entire industry devoted to putting out and reinforcing wrong economic beliefs.

Confidence isn't the problem. Being confident - or dishonest - about the wrong things is.

There isn't any good reason why people can't be confident about the right things. The problem is exposure and the deafening wall of noise which the confidence trick industry is paid to produce.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Fri Jul 31st, 2009 at 06:31:39 AM EST
[ Parent ]
Most of my despair with the human race comes not from the "good or bad" debate about humans but from our inability to deal with complexity.

We were made (evolution, I mean) to be able to deal with very small communities, local problems, etc... Not a globalised world.

I know quite a few people that are not able to eat animals that they saw alive, because they create an empathic bound. But they have no problems in eating the exact same species as long as it is abstracted away in a long food-production chain. Things become abstract, distant, ...

Topics are complex, reality is complex. Beyond the capacity of human understanding.

Self-confidence is a proxy, like any other, of competence and is very easy to evaluate. Previous performance analysis, OTOH, requires some cognitive load (you need to know who the person his and have an evaluation of their previous failures).

The liberal idea that we can comprehend the world in its entirety is so wrong.

More than educate ourselves about the world, we need to educate ourselves about our cognitive limitations and biases.

More than understanding, we need to be able to deal (and not be fooled) with our inability to understand.

For me, modern education should more be about dealing with our own shortcomings and inabilities of dealing with a complex world than any specific "scholastic" subject.

The more complex the world we make, the more space there is for these kind of reasons for despair.

Simplicity and preparing people to deal with their own shortcomings should be high in a good political agenda.

by t-------------- on Sat Aug 1st, 2009 at 03:08:13 PM EST

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