A menagerie of fallacies

[Chris]

This is Matt Ridley's review of Richard Nisbett's Mindware.

It's logic, rhetoric, discourse. Philosophy is as close as I could get to classifying.

A MENAGERIE OF FALLACIES

...Budget week might be a good time to remind ourselves of the fallacies on which bad policies feed. Last year the University of Michigan’s Professor Richard Nisbett wrote a short book called Mindware, about the ways in which people deceive themselves and others about statistical reasoning. Since reading it, I have been noticing examples of the art everywhere.

Think of Nisbett’s book as a field guide to a nature reserve. Keep an eye out for the Sunk Cost fallacy, wherein you argue that a nuclear power station or a supersonic airliner must be built because you have spent a fortune on it already. It should never matter how much cost has already been sunk into a project: it is only worth spending more if it is cost-effective.

Harder to spot is the Opportunity Cost. Money spent on one thing cannot be spent on another. The US Department of Homeland Security assesses the cost of Donald Trump’s wall on the Mexican border at $21.6 billion, which could buy quite a few bridge repairs, warships, or tax cuts instead – just to name the president’s own priorities. In the 2010 Comprehensive Spending Review, the British government deferred strategic road schemes with an average benefit-cost ratio of 6.8, while pressing ahead with High-Speed 2, whose estimated benefit-cost ratio at the time was 1.2.

A common but shy animal is Loss Aversion. This is the peculiar fact that people mind more about losing something than they are pleased by gaining something of equal value. If you suggest tossing a coin with the result that your friend has to give you £100 if it is heads, while you will give him £101 if it is tails, you’ll find he is not very interested. In general the reward has to be twice as great as the loss before people are keen to take on such risks. The beneficiaries of business rate changes [or National Insurance changes!] are more numerous than the losers, but we hear from the latter.

A close cousin is the Endowment Effect....

[Mister D]

Oh, I thought this was another thread about the state of tPF.

[Chris]

Applies.

[Chris]

This Article Won’t Change Your Mind

...The theory of cognitive dissonance—the extreme discomfort of simultaneously holding two thoughts that are in conflict—was developed by the social psychologist Leon Festinger in the 1950s. In a famous study, Festinger and his colleagues embedded themselves with a doomsday prophet named Dorothy Martin and her cult of followers who believed that spacemen called the Guardians were coming to collect them in flying saucers, to save them from a coming flood. Needless to say, no spacemen (and no flood) ever came, but Martin just kept revising her predictions. Sure, the spacemen didn’t show up today, but they were sure to come tomorrow, and so on. The researchers watched with fascination as the believers kept on believing, despite all the evidence that they were wrong.

“A man with a conviction is a hard man to change,” Festinger, Henry Riecken, and Stanley Schacter wrote in When Prophecy Fails, their 1957 book about this study. “Tell him you disagree and he turns away. Show him facts or figures and he questions your sources. Appeal to logic and he fails to see your point … Suppose that he is presented with evidence, unequivocal and undeniable evidence, that his belief is wrong: what will happen? The individual will frequently emerge, not only unshaken, but even more convinced of the truth of his beliefs than ever before.”

This doubling down in the face of conflicting evidence is a way of reducing the discomfort of dissonance, and is part of a set of behaviors known in the psychology literature as “motivated reasoning.” Motivated reasoning is how people convince themselves or remain convinced of what they want to believe—they seek out agreeable information and learn it more easily; and they avoid, ignore, devalue, forget, or argue against information that contradicts their beliefs.

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