I recently blogged about whether we form our opinions more from information than experience. The starting point was a passage in David McCullough‘s book The Great Bridge, and he was comparing modern Americans with our 19th-century counterparts.
I was interested not just as a historical comparison but because the information/experience question is compelling in its own right. Consider a doctor, for instance: as Jerome Groopman writes very well in How Doctors Think, the act of diagnosing a patient is a tricky blend of science (relying primarily on information) and art (relying primarily on experience).
Or pretend for a minute that you’re Manny Ramirez facing Mariano Rivera with an 0-2 count with two outs in the bottom of the ninth inning in the seventh game of the A.L. Championship Series, and you know that Rivera throws a breaking pitch away in 80 percent of such instances — but you also know that he struck you out with a high fastball last night with the same count. (What with Manny being Manny, this may not be the best example.)
But rather than my speculation, let’s hear from someone who’s done some actual research on this question.
Greg Barron, an assistant professor in negotiation, organizations, and markets at the Harvard Business School, e-mailed in response to the earlier post to share with us “what we know so far” about “my favorite topic, decisions from experience.”
Here are Barron’s summaries of two papers he has co-authored. The first, published in Psychological Science, is called “Decisions From Experience and the Effect of Rare Events in Risky Choice.”
1. Decisions made from personal experience and those made from information (what we term “description”) are qualitatively different — in particular regarding rare, but important, events that are overweighted in information-based decisions (see Prospect Theory) but underweighted in decisions from experience. For example, consider G. Gigerenzer‘s observation that more people were killed in the increase in traffic accidents after 9/11 than were killed in the attacks themselves. Risk on the road is learned from experience, and is underweighted.
2. When people have both sources of information, description and personal experience, we find behavioral inertia for whatever information was encountered first. Thus, in the 80′s people who had been practicing unsafe sex for 30 years were not as impressed by the AIDS epidemic as today’s teenagers who are scared silly (despite the rate of HIV transmission with an actual AIDS partner being as low as 1/1000). More neat applications (ex. Vioxx) are in the paper.
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The trouble is experience may give false associations. If you did a rain dance once and it happened to rain shortly after that is there a cause and effect?
Then there are stubborn people who think if something is supposed to work a certain way they’ll keep trying to do it that way even if it doesn’t work.
Or they assume previous experience applies to the new problem, ie. we try to fight the new war like the previous one.
Then there are others who completely ignore the experience because of ideology.
Jessie:
You misread the statistic: its not a 1 in 1000 chance of contracting AIDS through sex…its a 1 in 1000 chance of contracting AIDS WHEN YOU ALREADY know that your partner is HIV+.
The reason that AIDS was so rampant in the early stages of the disease had to do with the much higher risk levels of those succeptible to AIDS. The people that contracted AIDS early on often had severely compromised immune systems due to prior exposure to syphilis or hepatitis, which were rampant in the gay and IV drug communities in the 1970′s; gay men knew the risk of contracting syphilis was high but that it was 100% curable from a pennicillin injection.
It is our conception of who we think we are and who we think we want to be that has the greatest influence. Subjectivity, in other words is the predominant influence. Moreover, subjectivity is easily manipulated by dominant discourses, so who we think we are and who we think we want to be is often to a great extent determined by others. The only means of protection against this “colonization of subjectivity” is to conceptualize oneself beyond the constraints of the subject-object dichotomy that is the fundament of the Western Episteme.
@ Jesse Davis
Obviously, there can be no AIDS epidemic, because there is no cure we aren’t all dead. For those who like numbers, try these:
HIV positive Americans: 1,112,000
Eligible for antiretroviral (ARV) therapy: 480,000
Actually on ARV: 268,000
Progression from HIV to AIDS: 10 years
Using this information, calculate the average number of AIDS deaths/year (assuming people die shortly after getting full-blown AIDS). Now go check the actual statistics. Then scratch your head.
Education is the process of reading the fine print. Experience is the result of not reading the fine print.
I opt for education.
The plural of anecdote is not data. However, there is still anecdotal evidence.
My guess is that some people are simply more trusting of one or the other form of information. It may be a function of experience or genetics or both.
Some people seem to really value their own experiences and/or the experiences of others (e.g. word of mouth). The possibility that their experiences are atypical is not on their radar. As is obvious, both forms of information are important and credible. The key is in finding that balance that enables us to make the ‘right’ decision most often. My guess is that most of us are far from that mark.
But where does the information come from? Isn’t is just other people’s experiences? So the question is really My Experience versus Other People’s Experiences.
Michael F. Martin: You point above “I’m skeptical about the empirical result that events are overweighted by information-based inferences. If that were true, then why do we keep having financial bubbles? Isn’t the whole point of the “Black Swan” literature that we are NOT overweighting the possibility of catastrophes?”
You are making an invalid comparison. As individuals we can adjust our actions quickly based on information and experience. As a mob (which economics deals with) we do not have either faculty. This is why nations as a whole are unable to learn from history, but individuals can. For this reason, we will continue to have bubble after bubble until the next learning horizon comes about.