Cognitive Biases

Unless you’ve been living under a rock, you’ve heard of the now infamous Fyre Festival. A joint venture with Ja Rule and delusional serial entrepreneur Billy McFarland, the music festival was created as PR for the Fyre music app, but quickly went up in flames through a variety of frauds and deceptions. 

Promised luxury oceanfront villas and expertly crafted meals on a private island, concert-goers instead arrived to FEMA tents, wet mattresses, boxed sandwiches, and no music. The festival was promptly canceled and guests were sent home, but not before the damage was done. If you haven’t already, check out either of the documentaries streaming on Netflix and Hulu. They each provide a slightly different angle on the downfall of the festival.

As a mentalist, I couldn’t help but to consider the psychology behind the team trying to assemble this. Enter the Dunning-Kruger effect, one of the dozens of cognitive biases that seem to universally affect our decisions (learn more about cognitive biases). As described in a 2014 paper, the Dunning-Kruger effect “suggests that poor performers are not in a position to recognize the shortcomings in their performance.” In other words, those who are completely incompetent at a skill tend to know so little that they don’t have a realistic baseline for what their knowledge should be. This can be dangerous because it leads to reckless decisions based on overestimated abilities. 

In a 1999 paper entitled “Unskilled and Unaware of It: How Difficulties in Recognizing One’s Own Incompetence Lead to Inflated Self-Assessments,” Kruger and Dunning created a series of tests based on humor, language, and logic. As suspected, those who scored in the bottom 25% overrated their skills by much more than their peers, and those who scored the highest (experts) tended to slightly underrate their skills (part of why successful, qualified leaders don’t pretend that they have all the answers).

The Fyre team set out to create an incredible experience from the beginning, but nobody knew what they were doing. That wouldn’t have been as problematic except that they didn’t seem to realize how over their heads they were. In particular, Grant Margolin (Fyre’s CMO) seemed to ignore advice from those with far more experience. A few great Grant quotes from the documentary:

• “Let’s just do it and be legends!”
• “I’m not a perfectionist, but everything needs to be perfect.”
• “I’m a marketing prodigy!”
• “I asked for sushi chefs!!” (after the food budget was cut from $6 mil to $1 mil.)

We’ve all heard the saying “You don’t know what you don’t know.”  In this case, Margolin operated under an assumption that his talents far surpassed his actual abilities. 

I’ve seen the same with mentalists and illusionists who have come to me with requests for advice on their programs. Too often, they don’t have enough performance time under their belts and their show needs a heavy amount of lifting to make it viable. After giving helpful thoughts, the comments are nearly always a defense of why they don’t want to change. And yet they wonder why their careers aren’t going in the direction they would like. You may have found the same problems interacting with both staff and other executives at your workplace.

A takeaway for all of us is to assume that there are always those who know more than we do. There is a fine line between being a visionary and being a fool, and the Fyre Festival should serve as a reminder to show humility in our cognitive self-assessments. You will become a better leader by thinking like an expert, not by pretending that you are one.

As a mentalist, I’m typically onstage in front of a group that ranges in size from 15 individuals to 18,000. While the sizes of the groups have varied, their dynamics for the most part have not. In fact, most groups have immutable characteristics that we can capitalize on (and defend ourselves against). The same characteristics can be found in friends, coworkers, city councils, and juries.

I’m talking about The Wisdom of Crowds, as well as the aptly named Groupthink.

The Wisdom of Crowds

The Wisdom of Crowds was a term coined by James Surowiecki in 2004. His similarly titled book begins with James recounting a phenomenon where the crowd at a county fair accurately determined the weight of an ox by averaging the group’s individual guesses. Oddly, this result worked even though many of the original guesses were wildly off. So what does this mean? It means that groups, when working together and leveraging each other’s knowledge, can achieve results not as easily obtained individually. It also means that if your child has a jellybean counting contest at school, they should average the guesses of all their friends around them! See, the average isn’t always wrong. In fact, it’s often right! And that’s why we should teach our children to just be  . . . average. 🙂

For this idea to hold merit, James gives 4 pillars that each group of people must stand on:

1. Diversity of opinion amongst individuals.
2. Independence, that each person’s opinion is their own.
3. Decentralization, that people can draw on their own knowledge.
4. Aggregation, that the ideas can somehow be merged into a communal decision.

Unfortunately, it doesn’t always work out that way.

Groupthink

When the above ideals aren’t met, The Wisdom of Crowds theory self destructs and we are left with a “black hole” so to speak, a vacuum of irrationality that yields inferior results. This is called Groupthink, named by William H. Whyte in 1952 and derived from George Orwell’s dystopian novel 1984. When members of a group don’t stand for their own ideals because they would rather have the group’s support (when they seek agreement rather than meaningful solutions), we wind up with the bulk of the group giving way to a few key leaders, or “thought leaders.”

In the past, it was often thought that that The Wisdom of Crowds only held true if people didn’t talk to each other, but the University of Pennsylvania’s Damon Centola recently proved that this isn’t true. In fact, groups who communicate with each other can achieve incredible results, as long all members hold equal weight. When “thought leaders” take over the decisions, it is “more likely to lead the group astray than improve it” (Centola).

As a Mentalist

Knowing the similarities and subtle differences between these modes of thinking creates incredible opportunities onstage. In any given room, I know that I can predict with reasonable accuracy the average behavior of the audience at large. By meeting the personalities in the lobby before the show, or during the cocktail reception, I can often gauge the overall makeup of the group. And by flipping that thought on its head to create groupthink, I know that establishing rapport with a few key individuals in each audience (the thought leaders) will relax the rest of my guests, making the job much easier since people have let their guard down.

In The Office

Follow the lead of companies like Square, who hold weekly “Town Square” meetings where employees are encouraged to speak up about anything that may be on their minds. Give all individuals the chances to have their voices heard, rather than relying on the opinions of a select few. Of course, that doesn’t mean that you shouldn’t know the strengths and weaknesses of every employee (famed hedge fund manager Ray Dalio even had statistical performance and personality “trading cards” made of each employee) — it just means that you should at least recognize and listen to each individual voice.

In Your Personal Life

We’ve all been in situations where things don’t work out exactly the way we wished. Our friends decide to go to a different movie than us, or a different bar, or even just have a different opinion. While our first reaction is almost always defense, it might make sense to realize that the group may be creating a better decision that we would individually. And conversely, if one or two leaders in your friends always makes the decision, it might be time to voice your opinion in a kind way.

As a college student, my writing 39C professor taught us to always question the source of our information. In a world where Facebook and Google know more about us than we know about ourselves (each company has a small book’s worth of information on our habits, desires, interests, and friends), it’s easy to make incorrect assumptions about the information that we receive.

In psychology, there are a series of mental “illusions” called cognitive biases. One of the most well known is the confirmation bias, defined as “the tendency to search for, interpret, favor, and recall information in a way that confirms one’s preexisting beliefs or hypotheses.” In a sense, we treat information that feeds our personal agendas as more important than that which does not.

Social media networks only help feed this, with algorithms that place “liked” posts higher in our news feeds. This creates a distorted reality field, causing us to believe in an inflated majority of the world sharing our beliefs.

Around the world, there are fraudulent psychics (think Sylvia Brown, the Long Island Medium, etc.) who greatly rely on this fact to create their sensationalized performances. At their programs, guests arrive already believing that they are seeing the “real thing.” This leads attendees to place more importance on what the psychic gets right than what they miss. They downplay information that doesn’t fit their mental model, and as such give the psychic more credit than would be otherwise deserved.

As a mentalist, I’m able to use this fact when I build my shows. At the beginning of the show, the audience has their guards up and will scrutinize every action. As the show progresses, I can take more risks and rely on bolder, more creative methods since the audience has relaxed more. They assume that I will be able to correctly guess the information, allowing their guards to drop and in a sense becoming easier to manipulate.

Want to test this with your friends?

Grab a copy of the horoscope with some astrologically-minded friends, and ask them to read the horoscopes and choose that which describes them the best. They will likely find ways to explain why their horoscope is the best fit of the 12. Now wait until there is a new set of horoscopes on a different day. Clip them each out and discard the heading that says which horoscope text belongs to which sign. Without having the information readily available, you’ll find that it is virtually impossible to select the correct horoscope. This is because horoscopes are written in generalities (called Barnum statements) designed to apply universally. It is only our confirmation bias that causes us to read our personal horoscope as more applicable.

So next time you are thinking that the rest of the world thinks exactly like you, sit back and ask yourself what information you might be dismissing.