Availability Heuristic

A Different Kind of Earthquake

Consider Taleb’s airport illustration. Ask travelers en route to some remote destination how much they would pay for an insurance policy paying a million tugrits (the currency of Mongolia) if they died during the trip for any reason. Then ask another collection of travelers how much they would pay for insurance that pays the same in the event of death from a terrorist act only. Odds are that people would rather pay for the second policy, even though the first includes death from terrorism. A related experiment by the psychologists Daniel Kahneman and Amos Tversky shows how a specific scenario can feel more probable than a broader category containing it. In that experiment, they found that the majority of people, whether professional forecasters or members of the general public, judge a deadly flood caused by a California earthquake to be more likely than a fatal flood occurring somewhere in North America (which happens to include California).

This mental shortcut is known as the availability heuristic or availability bias. The ease with which instances come to mind—often because they are vivid, recent, or emotionally charged—becomes a proxy for probability. Because the image of a California earthquake is concrete and dramatic, it springs to mind more readily than the abstract category of “floods in North America,” leading to a skewed perception of risk. In another classic demonstration, Tversky and Kahneman asked people to judge whether words beginning with the letter t are more common than words that have t as the third letter. Most find it far easier to generate words that start with t (like tin, tap), so they confidently—and incorrectly—conclude that such words are more frequent. The ease of mental search, rather than actual frequency, drives the judgment.

Later research revealed that this inference is not entirely automatic; it can be reversed when people are prompted to question the diagnostic value of their recall experience. In an experiment by Wänke et al. (1995), participants in a control condition first listed words beginning with t and then words with t in the third position, after which they rated the relative frequency. Replicating the standard availability effect, they estimated t-initial words to be far more numerous. But when the experimenters introduced a subtle manipulation—encouraging participants to consider why their recall might not reflect actual frequencies (for example, by thinking about factors that bias retrieval)—the pattern flipped. Under those conditions, people discounted the ease of recall and instead relied on the content of what they had brought to mind. Because they had, with effort, retrieved a respectable number of third-letter t words, they now judged that pattern to be more common. The availability heuristic, it turns out, is sensitive to the perceived diagnosticity of the fluency signal; in the rush of daily life, however, we rarely stop to question it.

Taleb describes the problem from his experience as a derivatives trader: people were reluctant to insure against abstract risks, while vivid risks caught their attention.

The availability bias extends far beyond lab experiments. After a pair of plane crashes makes headlines, a traveler may switch to the train, even though the underlying statistical risk of flying hasn’t changed. At the same time, she underestimates the dangers of indoor pollution, a silent threat that rarely makes the evening news. Executives, lulled by a string of recent successes, become overconfident because failure simply does not come easily to mind. A person who has been watching too many spy movies starts seeing conspiracies everywhere. In every case, the mental probabilistic map is driven not by careful analysis but by the most emotionally salient or easily recalled stories.

Taleb extends his criticism to journalism in the following passage. His comparisons concern the period he describes; his concern is how news coverage shapes the risks that come to mind. It is a fact that our brain tends to go for superficial clues when it comes to risk and probability, these clues being largely determined by what emotions they elicit or the ease with which they come to mind. In addition to such problems with the perception of risk, it is also a scientific fact, and a shocking one, that both risk detection and risk avoidance are not mediated in the “thinking” part of the brain but largely in the emotional one (the “risk as feelings” theory). The consequences are not trivial: it means that rational thinking has little, very little, to do with risk avoidance. Much of what rational thinking seems to do is rationalize one’s actions by fitting some logic to them after the emotional brain has already decided.

In that sense the description coming from journalism is certainly not just an unrealistic representation of the world but rather the one that can fool you the most by grabbing your attention via your emotional apparatus—the cheapest to deliver sensation. Take the mad cow “threat” for example: over a decade of hype, it killed people (in the highest estimates) in the hundreds, while car accidents killed several hundred thousands—except that the journalistic description of the latter would not be commercially fruitful. Note that the risk of dying from food poisoning or in a car accident on the way to a restaurant is greater than dying from mad cow disease. This sensationalism can divert empathy toward wrong causes: cancer and malnutrition are among those that suffer the most from the lack of such vivid attention. Malnutrition in Africa and Southeast Asia no longer causes the emotional impact, so it literally drops out of the picture. In that sense the mental probabilistic map in one’s mind is so geared toward the sensational that one would realize informational gains by dispensing with the news. Another example concerns the volatility of markets. In people’s minds, lower prices are far more “volatile” than sharply higher moves. In addition, volatility seems to be determined not by the actual moves but by the tone of the media. The market movements in the eighteen months after September 11, 2001, were far smaller than the ones we faced in the eighteen months prior—but somehow in the mind of investors they were very volatile. The media’s discussions of “terrorist threats” magnified the effect of these market moves in people’s heads. This is one of the many reasons that journalism may be the greatest plague we face today—as the world becomes more and more complicated and our minds are trained for more and more simplification.

The same dynamics govern our collective response to natural disasters. Howard Kunreuther and other students of risk observed that availability effects explain the pattern of insurance purchase and protective action. After each significant earthquake, Californians are for a time diligent about buying insurance, strapping down water heaters, sealing basement doors against floods, and restocking emergency supplies. But memories dim, and both worry and diligence subside. Societies have long tracked the high-water mark of rivers and prepared only for what has already been experienced—from pharaonic Egypt to modern flood-plain management—apparently assuming that floods will not rise higher than the highest mark anyone remembers. A truly worse disaster, one that lies outside the readily available mental catalogue, is systematically neglected.

A vivid memory can influence later judgments, but its lasting emotional force does not tell us how representative it is. Before using it to estimate a risk, compare it with less memorable cases and relevant frequency data. The same check applies when a danger feels remote simply because no recent example comes to mind.