📰 PRASÓWKA #39

S+B: So it’s not that generalized emotion influences decision making. It’s that one emotion — fear — distorts the perception of risk and introduces error into decision making.

KAHNEMAN: What actually happens with fear is that probability doesn’t matter very much. That is, once I have raised the possibility that something terrible can happen to your child, even though the possibility is remote, you may find it very difficult to think of anything else.

KAHNEMAN: You get polarization in groups. In many situations you have a risk-taking phenomenon called the risky shift. That is, groups tend to take on more risk than individuals.

We looked at similar phenomena in juries. You collect judgments from the individual members, then you have them delivered, and then you look at the result compared to the median judgment of the group. It’s straightforward what happens: The group becomes more extreme than the individuals.

S+B: Do you think the dysfunctions of group decision making are worse than the cognitive dysfunctions of individual decision makers?

KAHNEMAN: That depends on the nature of the decision, the individuals, and the groups. But I strongly believe that both individuals and groups need mechanisms to review how their decisions are made. This is particularly important for organizations that have to make many significant decisions in a short amount of time.

S+B: Are people introspection-averse, or are they risk-averse? You’re a psychologist; you say your unit of analysis is the individual. Why don’t individuals want to know? People look at mirrors.

KAHNEMAN: But when they have made a decision, people don’t even keep track of having made the decision or forecast. I mean, the thing that is absolutely the most striking is how seldom people change their minds. First, we’re not aware of changing our minds even when we do change our minds. And most people, after they change their minds, reconstruct their past opinion — they believe they always thought that. People underestimate the amount to which their minds have changed. Now in addition, people in general, when they have been persuaded of something, they think they always thought that. There’s very good research on that.

KAHNEMAN: If I had one wish, it is to see organizations dedicating some effort to study their own decision processes and their own mistakes, and to keep track so as to learn from those mistakes. I think this isn’t happening. I can see a lot of factors acting against the possibility of that happening. But if I had to pick one thing, that would be it.

I'm personally a big fan of playtesting with creators. It creates an opportunity to see ‘does this resonate with the audience that we think it does? And you do that through the creators who are the voice of that group of players.

Generally speaking (even past playtests) it’s not always about monetary compensation, but we do always want to make sure the value is there to make the experience feel worth it for the creator. There’s lots of different ways to do that—you can give creators early access, allow exclusive pieces of content, or create an experience that is incredibly unique and one of a kind. But if there are cases where an activation requires a direct deliverable like a sponsored piece of content or a social post, we really want to make sure they’re compensated for their work directly. 

One common mistake we see made is that devs will ask for feedback, say the feedback is good, and then not implement it. If you can't incorporate it, tell creators why. “We don't want to" is still a fine answer!

Anchoring bias

The tendency to rely too heavily on the first piece of information encountered (the “anchor”) when making decisions. For example, initial user research can set an anchor for product design strategy.

Bandwagon effect

The tendency to do (or believe) things because many other people do (or believe) the same. This is related to groupthink and herd behavior. ( “This design is great because my team thinks it’s great.”)

Dunning-Kruger effect

Individuals with average skills overestimate their ability. It’s the phenomenon where the least competent people often believe they’re the best.

Sunk cost fallacy

This bias refers to the phenomenon where a product creator is reluctant to abandon a strategy or course of action because they have invested heavily in it, even when it’s clear that abandonment would be more beneficial. (“This product is my baby.”)