Accepting Emotional Bias
The author explains that despite understanding probability and randomness, he cannot fight his emotional reactions and must accept his predisposition to be fooled by randomness, using practical tricks like avoiding eye contact or imagining others as non-human to manage emotional responses.
THE IDEA
I AM NOT SO INTELLIGENT
The epiphany I had in my career in randomness came when I understood that I was not intelligent enough, nor strong enough, to even try to fight my emotions. Besides, I believe that I need my emotions to formulate my ideas and get the energy to execute them.
I am just intelligent enough to understand that I have a predisposition to be fooled by randomness—and to accept the fact that I am rather emotional. I am dominated by my emotions—but as an aesthete, I am happy about that fact. I am just like every single character whom I ridiculed in this book. Not only that, but I may be even worse than them because there may be a negative correlation between beliefs and behavior (recall Popper the man). The difference between me and those I ridicule is that I try to be aware of it. No matter how long I study and try to understand probability, my emotions will respond to a different set of calculations, those that my unintelligent genes want me to handle. If my brain can tell the difference between noise and signal, my heart cannot.
Such unintelligent behavior does not just cover probability and randomness. I do not think I am reasonable enough to avoid getting angry when a discourteous driver blows his horn at me for being one nanosecond late after a traffic light turns green. I am fully aware that such anger is self-destructive and offers no benefit, and that if I were to develop anger for every idiot around me doing something of the sort, I would be long dead. These small daily emotions are not rational. But we need them to function properly. We are designed to respond to hostility with hostility. I have enough enemies to add some spice to my life, but I sometimes wish I had a few more (I rarely go to the movies and need the entertainment). Life would be unbearably bland if we had no enemies on whom to waste efforts and energy.
The good news is that there are tricks. One such trick is to avoid eye contact (through the rearview mirror) with other persons in such traffic encounters. Why? Because when you gaze into someone's eyes, a different part of your brain, the more emotional one, is activated and engaged as the result of the interaction. I try to imagine that the other person is a Martian, rather than a human being. It works sometimes—but it works best when the person presents the appearance of being from a different species. How? I am an avid road cyclist. Recently, as I was riding along with other cyclists, slowing down traffic in a rural area, a small woman in a giant sports utility vehicle opened her window and heaped curses at us. Not only did it not upset me but I did not even interrupt my thoughts to pay attention. When I am on my bicycle, people in large trucks become a variety of dangerous animals, capable of threatening me but incapable of making me angry.
I have, like anyone with strong opinions, a collection of critics among finance academics and economists, annoyed by my attacks on their misuse of probability and unhappy about my branding them as pseudoscientists. I am incapable of taming my emotions when reading their comments. The best I can do is just not read them. Likewise with journalists. Not reading their discussions of markets spares me plenty of emotional expenditure. I will do the same with unsolicited comments on this book. Wax in my ears.
When to use it
In financial decision-making, accept that emotions will affect your choices and use rules to avoid impulsive trades.
In interpersonal conflicts, use psychological distance (e.g., imagining the other person as a Martian) to reduce anger.
In evaluating criticism, avoid reading emotional triggers by ignoring unsolicited comments or focusing on constructive feedback.
In daily life, recognize that small emotional reactions are part of human nature and use simple avoidance strategies to minimize their impact.
FROM THEORY TO EVERYDAY LIFE
In practice
Traffic Anger
The author gets angry at a driver who honks immediately after a traffic light turns green. Despite knowing it's irrational, he cannot help it. He uses the trick of avoiding eye contact through the rearview mirror to reduce emotional activation.
Cycling Incident
While cycling, a woman in an SUV yells at the author and other cyclists. By perceiving people in large trucks as dangerous animals rather than humans, he remains unperturbed.
Dealing with Critics
The author has critics among finance academics and economists. He cannot control his emotions when reading their comments, so he chooses not to read them at all to avoid emotional expenditure.
A MOMENT TO REFLECT
Put it to work.
How do you manage your emotional reactions when you know they are irrational?
What practical tricks can you use to avoid being fooled by randomness in your daily life?
Can you accept that you are not fully rational, and how does that change your decision-making?
CONTINUE THE CONVERSATION
Source texts
- Fooled by Randomness The Hidden Role of Chance in the Markets and in Life (Nassim Nicholas Taleb)