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Mental Models

The SnackWell's Phenomenon

The SnackWell's Phenomenon describes how people often misinterpret outcomes, mistakenly attributing success or failure to skill when luck or hidden information plays a significant role. This makes learning from experience difficult, as outcomes are rarely purely due to skill or luck, leading to persistent errors in judgment and decision-making.

THE IDEA

Working backward is hard: the SnackWell’s Phenomenon

In the nineties, millions of people jumped on the SnackWell’s bandwagon. Nabisco developed these devil’s food cookies as a leading product to take advantage of the now-discredited belief that fat, not sugar, makes you fat. Foods made with less fat were, at the time, considered healthier. With the blessing of the U.S. government, companies swapped in sugar for fat as a flavoring ingredient. SnackWell’s came in a green package, the color associated with “low fat” and, therefore, “healthy”—like spinach!

For all those people trying to lose weight or make healthier snacking choices, SnackWell’s were a delicious godsend. SnackWell’s eaters bet their health on substituting these cookies for other types of snacks like, say, cashews, which are high in fat. You could ingest sugar-laden SnackWell’s by the box, because sugar wasn’t the enemy. Fat was the enemy, and the packaging screamed “LOW FAT!”

Of course, we know now that obesity rose significantly during the low-fat craze. (Michael Pollan used the phrase “SnackWell’s Phenomenon” in describing people increasing their consumption of something that has less of a bad ingredient.) As those SnackWell’s eaters gained weight, it wasn’t easy for them to figure out why. Should the weight gain be fielded into the skill bucket, used as feedback that their belief about the health value of SnackWell’s was inaccurate? Or was the weight gain due to bad luck, like a slow metabolism or something else that wasn’t their fault or at least didn’t have to do with their choice to eat SnackWell’s? If the weight gain got fielded into the luck bucket, it wouldn’t be a signal to alter the choice to eat SnackWell’s.

Looking back now, it seems obvious how the weight gain should have been fielded. But it is only obvious once you know that SnackWell’s are an unhealthy choice. We have the benefit of twenty years of new research, more and better-quality information about what causes weight gain. The folks on the low-fat bandwagon had only their weight gain to learn from. The cards remained concealed.

Working backward from the way things turn out isn’t easy. We can get to the same health outcome (weight gain) by different routes. One person might choose SnackWell’s; another might choose Oreos (also a Nabisco product, developed by the same person who invented SnackWell’s); a third might choose lentils and kale. If all three people gain weight, how can any of them figure it out for sure?

Outcomes don’t tell us what’s our fault and what isn’t, what we should take credit for and what we shouldn’t. Unlike in chess, we can’t simply work backward from the quality of the outcome to determine the quality of our beliefs or decisions. This makes learning from outcomes a pretty haphazard process. A negative outcome could be a signal to go in and examine our decision-making. That outcome could also be due to bad luck, unrelated to our decision, in which case treating that outcome as a signal to change future decisions would be a mistake. A good outcome could signal that we made a good decision. It could also mean that we got lucky, in which case we would be making a mistake to use that outcome as a signal to repeat that decision in the future.

When Nick the Greek won with a seven and a deuce, he fielded that outcome into the skill bucket, taking credit for his brilliant strategy. When he lost with that hand—a much more common occurrence—he wrote it off as bad luck. His fielding error meant he never questioned his beliefs, no matter how much he lost. We’re all like Nick the Greek sometimes. Uncertainty—luck and hidden information—gave him the leeway to make fielding errors about why he was losing. We all face uncertainty. And we all make fielding errors.

Rats get tripped up by uncertainty in a way that should appear very familiar to us. Classical stimulus-response experiments have shown that the introduction of uncertainty drastically slows learning. When rats are trained on a fixed reward schedule (for example, a pellet for every tenth press of a lever), they learn pretty fast to press that lever for food. If you withdraw the reward, the lever-pressing behavior is quickly extinguished. The rats figure out that no more food is on its way.

But when you reward the rats on a variable or intermittent reinforcement schedule (a pellet that comes on average every tenth lever press), that introduces uncertainty. The average number of lever presses for the reward is the same, but the rat could get a reward on the next press or not for thirty presses. In other words, the rats are rewarded the way humans usually are: having no way to know with certainty what will happen on the next try. When you withdraw the reward from those rats, the lever-pressing behavior extinguishes only after a very long time of fruitless lever pushing, sometimes thousands of tries.

We might imagine the rats thinking, “I bet the next lever press will get me a pellet. . . . I’ve just been getting unlucky . . . I’m due.” Actually, we don’t even have to imagine this. We can hear it if we listen to what people say while they play slot machines. Slot machines operate on a variable-payoff system. It’s no wonder that, despite those machines being among the worst bets in the casino, the banks of slots in a casino are packed. In the end, our rat brains dominate.

If this all doesn’t seem difficult enough, outcomes are rarely all skill or all luck. Even when we make the most egregious mistakes and get appropriately negative outcomes, luck plays a role. For every drunk driver who swerves into a ditch and flips his car, there are several who swerve harmlessly across multilane highways. It might feel like the drunk driver in the ditch deserved that outcome, but the luck of the road conditions and presence or absence of other drivers also played a role. When we do everything right, like drive through a green light perfectly sober and live to tell the tale, there is also an element of luck. No one else simultaneously ran a red light and hit us. There wasn’t a patch of ice on the road to make us lose control of our vehicle. We didn’t run over a piece of debris and blow a tire.

When we field our outcomes as the future unfolds, we always run into this problem: the way things turn out could be the result of our decisions, luck, or some combination of the two. Just as we are almost never 100% wrong or right, outcomes are almost never 100% due to luck or skill. Learning from experience doesn’t offer us the orderliness of chess or, for that matter, folding and sorting laundry. Getting insight into the way uncertainty trips us up, whether the errors we make are patterned (hint: they are) and what motivates those errors, should give us clues for figuring out achievable strategies to calibrate the bets we make on our outcomes.

When to use it

  • Dieting and nutrition choices: Evaluating whether a diet is effective based on weight changes, accounting for metabolic luck and hidden variables.

  • Investing: Analyzing investment outcomes to separate skill from market luck, avoiding the trap of attributing a bull market gain to personal genius.

  • Business strategy: Learning from product successes and failures by critically assessing the role of timing, competition, and external factors.

  • Gambling and addiction: Understanding why people continue to gamble despite losses, due to the confusion of luck and skill in variable reward systems.

FROM THEORY TO EVERYDAY LIFE

In practice

01

SnackWell's cookies and the low-fat craze

In the 1990s, people ate large quantities of SnackWell's cookies believing they were healthy because they were low in fat (but high in sugar). When they gained weight, many attributed it to bad luck (slow metabolism) rather than revising their belief about the healthiness of the cookies, thus failing to learn from the outcome.

02

Nick the Greek's poker fielding error

Nick the Greek, a famous poker player, would attribute his wins with a weak hand (seven and deuce) to skill, but attribute his losses with the same hand to bad luck. This fielding error prevented him from accurately learning the true value of his strategy.

03

Rat experiments with variable reinforcement

Rats on a variable reward schedule (pellet every 10 presses on average) took much longer to stop pressing the lever after rewards were withdrawn compared to rats on a fixed schedule. Uncertainty about rewards (luck) slowed learning and prolonged the behavior.

✳

A MOMENT TO REFLECT

Put it to work.

  1. Think of a time you experienced a negative outcome. Did you attribute it to bad luck or to a mistake in your decision-making? How might you know which is correct?

  2. Can you identify a belief you hold that is based on a past success, even though luck may have played a large role? How could you test that belief more rigorously?

  3. Consider a situation where you or someone you know repeated a behavior despite repeated failures (like playing a slot machine). What made it difficult to stop, and how does the SnackWell’s Phenomenon explain that persistence?

Connected ideas

Another lens can bring the same problem into focus.

References

  1. In Defense of Food — Michael Pollan (2008)

CONTINUE THE CONVERSATION

Source texts

  • Thinking in Bets Making Smarter Decisions When You Dont Have All the Facts (Annie Duke)
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