Lizard brains, heuristics and koalas again

Bruce Schneier, in his absorbing article on the psychology of security, talks about the process of ‘mental accounting’, whereby we use different ‘accounts’ when performing different trade-off calculations. One experiment he describes thus:

• Trade-off 1: Imagine that you have decided to see a play where the admission is $10 per ticket. As you enter the theatre you discover that you have lost a $10 bill. Would you still pay $10 for a ticket to the play?
• Trade-off 2: Imagine that you have decided to see a play where the admission is $10 per ticket. As you enter the theatre you discover that you have lost the ticket. The seat is not marked and the ticket cannot be recovered. Would you pay $10 for another ticket?

The results of the trade-off are exactly the same. In either case, you can either see the play and have $20 less in your pocket, or not see the play and have $10 less in your pocket. But people don't see these trade-offs as the same. Faced with Trade-off 1, 88% of subjects said they would buy the ticket anyway. But faced with Trade-off 2, only 46% said they would buy a second ticket. The researchers concluded that there is some sort of mental accounting going on, and the two different $10 expenses are coming out of different mental accounts.

This probably sounds familiar. We all make this kind of odd calculation all the time: things assume a different value when we’re on holiday, late, sad, in love, angry, etc. So I’ll spend half an hour on the Internet trying to save £5 on the airport car park, and then happily buy a doughnut and coffee for £8.50 or whatever it now costs on Ryanair.

Talking to the Project Red Stripe team recently, they likewise compared the press coverage given to one death in a train crash to that given to any of the 3,500 children killed or seriously injured on Britain’s roads each year. (This relates to another of Schneier’s points about risk perception – that people exaggerate those that are rare and downplay those that are commonplace).

Our views of ‘good causes’ – AIDS orphans, famine victims, maltreated pets, etc. – are also notoriously subject to inexplicable perceptual bias.

Returning to Schneier’s article, he quotes the following words of Daniel Gilbert:

“The brain is a beautifully engineered get-out-of-the-way machine that constantly scans the environment for things out of whose way it should right now get. That's what brains did for several hundred million years--and then, just a few million years ago, the mammalian brain learned a new trick: to predict the timing and location of dangers before they actually happened.

Our ability to duck that which is not yet coming is one of the brain's most stunning innovations, and we wouldn't have dental floss or 401(k) plans without it. But this innovation is in the early stages of development. The application that allows us to respond to visible baseballs is ancient and reliable, but the add-on utility that allows us to respond to threats that loom in an unseen future is still in beta testing.”

Schneier then goes on to say:

“A lot of what I write in the following sections are examples of these newer parts of the brain getting things wrong.

And it's not just risks. People are not computers. We don't evaluate security trade-offs mathematically, by examining the relative probabilities of different events. Instead, we have shortcuts, rules of thumb, stereotypes, and biases--generally known as "heuristics."

…Our social and technological evolution has vastly outpaced our evolution as a species, and our brains are stuck with heuristics that are better suited to living in primitive and small family groups.”

All of this is by way of preamble to the Project Red Stripe team’s current deliberations over a target-group or market for their Internet-based business plan. Where relatively simple ‘interest’ equations were involved in deciding what kind of Internet project would be worth pursuing, far more complex equations are now involved in debating the relative worth of plans to offer better education to third-world children, to first-world children (the most influential decision-makers of the future), to women (mothers of the poorly-educated children), etc.

While Project Red Stripe has actively solicited ideas about what they should do, they haven’t solicited the same ideas about the group(s) for whom they should implement those ideas. Should they have invited an archbishop, an aid worker, a genetic researcher and an Australian scientist researching gender issues amongst the koala population to make the case for a particular target market?

I doubt it. But maybe they could still focus on a web-based project to help us bring the heuristics and decision-making capacities of our reptilian brains into line with the demands of the 21^st century.

(As well as Schneier’s article, do also read Daniel Gilbert’s If only gay sex caused global warming.)