Recreated by Greg Stevenson, based on study referred to in Dan Ariely’s Predictably Irrational
Here again you see examples of human action where the same behavioural quirks in a small and relatively inconsequential level of decision-making – choosing a holiday or a magazine subscription – are mirrored in bigger decisions. You might accept that a decoy or asymmetric dominance might affect your choice of magazine or holiday. But surely it wouldn’t apply to something as momentous as buying a house or hiring staff? Sorry, but it does – the peculiarities of human decision-making seem to apply at all levels. It’s one reason why I believe academics and policy-makers might benefit from paying more attention to consumer marketing. Tiny things that you discover when selling bars of chocolate can be relevant in how you encourage more consequential behaviour. Usually someone has often already found an answer to your problem – just in a different domain.
1.15: Same Facts, Different Context
If you want a simple life, unladen by weird decisions, do not marry anyone who has worked in the creative department of an advertising agency. For good and ill, the job instils a paranoid fear of the obvious and fosters the urge to question every orthodoxy and to rail against every consensus. This becomes tiring – especially when the same wilfully perverse thinking is applied to everyday household decisions.
A few years ago, our family toaster was not only prone to producing alarming sparks and occasional outbursts of flames or smoke, but its slot was far too narrow, meaning that every slice of bread thicker than industrial white sliced was liable to get stuck between the toasting elements.* ‘Why don’t you buy one of those new wide-slot toasters?’ my wife suggested. An hour or so later I returned home carrying a massive box and revealed to my wife that it contained, not a new toaster, but a bread-slicing machine. ‘I rewrote the brief,’ I declared proudly. ‘We don’t need a wider toaster. What we need is narrower bread!’
We tried this solution for a time, slicing bread thinly to fit in the narrow toaster. It wasn’t altogether hopeless, but the bread slicer occupied about half the available work surface in the kitchen and generated a spectacular amount of crumbs. Then we had children, and the lethal revolving blade had to be kept out of reach of their small hands. Today the machine sits in a cupboard, while above it on the shelf is a heavily used, wide-slot toaster, just as my wife had originally suggested.
But . . .
The cupboard in which the bread machine sits is in the kitchen of our four-bedroom flat, which is on the second floor of a building constructed in around 1784. The house was built for the personal doctor of King George III by the architect Robert Adam, one of the titans of eighteenth-century British architecture. It sits in seven acres of communal grounds shaped by Capability Brown, the English landscape architect responsible for designing the gardens of Blenheim Palace and Highclere Castle.* And I got all this for free. I didn’t get the apartment for free, obviously. It cost me £395,000 in 2001. Its market value now is perhaps £650,000 but, if you buy it, you get the architecture and the landscaping for free.* The building is Grade I listed, placing it in the top 2.5 per cent of the 375,000 listed buildings in England, almost half of which are churches, while many of the others are uninhabitable – Nelson’s Column, for example, or the Royal Opera House.
So there are probably around 2,500 Grade I listed buildings in England in which you can actually live,* and I pay nothing at all for the privilege. Whereas a painting by Picasso costs perhaps 100,000 times more than a picture bought from a Sunday exhibitor on the Bayswater Road, a house designed by Robert Adam costs no more than an identically sized house by an unknown architect in the same area. Recently a flat by the modernist architects Maxwell Fry and Walter Gropius went on sale in Notting Hill; because it was in Notting Hill it was insanely expensive, but it was no more expensive than the banal apartments in the next-door house.
Copyright © Country Houses of Kent by Arthur Oswald published by Country Life Ltd., 1933
If you want to buy really cheap art, buy architecture.
The reason I enjoy this spectacular architecture at no cost at all is because I deployed exactly the same perverse reasoning when buying a house as I did when buying the bread slicer: I rewrote the brief, and tried to make a decision while disposing of the usual assumptions. I wondered what most people do when they move house, aware that if I chose a house the way most people do, I would end up competing with a lot of people for the same houses. On the other hand, I knew that if I bought a house using wildly divergent criteria from everyone else, I should find a place that was relatively undervalued. In competitive markets, it pays to have (and to cultivate) eccentric tastes.
When most people buy a house, the order of search is as follows: 1) set a price band, 2) define location, 3) define number of bedrooms, 4) set other parameters – garden size, for example. Architectural quality comes low on the list – and is further devalued because it isn’t quantifiable. If you can convince yourself to value something which other people don’t, you can enjoy a fabulous house for much less.*
I had decided before we moved that I wanted to live somewhere interesting, placing more emphasis on the architecture than on the precise location or the number of bedrooms. This eccentric approach certainly minimises status envy. Occasionally we visit insanely expensive houses owned by friends. ‘What did you think?’ my wife will ask as we drive home. ‘Well it’s certainly big,’ I reply, ‘but I couldn’t help thinking the architecture was a bit rubbish.’
As I said, our apartment is on the second floor, and there is no lift.* But again, I decided to look at it differently. Not having a lift is good for you, because several times a day you get guaranteed exercise. In my mind, the flat no longer suffered from the absence of a lift – it was blessed with a free gym.
There are two lessons to be learned here. Firstly, it doesn’t always pay to be logical if everyone else is also being logical. Logic may be a good way to defend and explain a decision, but it is not always a good way to reach one. This is because conventional logic is a straightforward mental process that is equally available to all and will therefore get you to the same place as everyone else. This isn’t always bad – when you are buying mass-produced goods, such as toasters, it generally pays to cultivate mainstream tastes. But when choosing things in scarce supply* it pays to be eccentric. The second interesting thing is that we have no real unitary measure of what is important and what is not – the same quality (such as not having a lift) can be seen as a curse or a blessing, depending on how you think of it. What you pay attention to, and how you frame it, inevitably affects your decision-making.
In making decisions, we should at times be wary of paying too much attention to numerical metrics. When buying a house, numbers (such as number of rooms, floor space or journey time to work) are easy to compare, and tend to monopolise our attention. Architectural quality does not have a numerical score, and tends to sink lower in our priorities as a result, but there is no reason to assume that something is more important just because it is numerically expressible.
1.16: Success Is Rarely Scientific – Even in Science
We often misuse our powers of reason, setting too low a bar in how we evaluate solutions, but too high a bar in our conditions for how we reach solutions. Reason is a wonderful evaluative tool, but we are treating it as though it were the only problem-solving tool – it isn’t. If you look at the history of great inventions and discoveries, sequential deductive reasoning has contributed to relatively few of them. Graphene, one of the most important discoveries of the last 30 years, was discovered by the physicist Andre Geim in Manchester,* but he created the substance by messing around with pencils and Sellotape, equipment that any of us could have bought at a branch of Staples.
Geim says of his approach to science: ‘I jump from one research subject to another every few years. I do not want to study the same stuff “from cradle to coffin”, as some academics do. To be able to do this, we often carry out what I call “hit-and-run exp
eriments”, crazy ideas that should never work and, of course, they don’t in most cases. However, sometimes we find a pearl . . . This research style may sound appealing but it is very hard psychologically, mentally, physically, and in terms of research grants, too. But it is fun.’
For all we obsess about scientific methodology, Geim knows it is far more common for a mixture of luck, experimentation and instinctive guesswork to provide the decisive breakthrough; reason only comes into play afterwards. The bureaucrats to whom he must justify his activities, however, demand reasons right from the beginning to justify funding, but the idea that there is a robust scientific process that will reliably lead to progress seems unfounded.
Here is the brilliant American physicist Richard Feynman, in a Lecture in 1964, describing his method: ‘In general, we look for a new law by the following process. First, we guess it . . . Then we compute the consequences of the guess, to see what, if this law we guess is right, to see what it would imply and then we compare the computation results to . . . experience, compare it directly with observations to see if it works . . . In that simple statement is the key to science. It doesn’t make any difference how beautiful your guess is, it doesn’t matter how smart you are, who made the guess or what his name is . . . If it disagrees with the experiment, it’s wrong. That’s all there is to it.’
A good guess which stands up to observation is still science. So is a lucky accident.
Business people and politicians do not quite understand this and tend to evaluate decisions by the rigour of the process that produces them, rather than by the rigour with which you evaluate their consequences. To them, the use of reason ‘looks scientific’, even if it is being used in the wrong place. After all, should we refuse to use antibiotics, X-rays, microwave ovens or pacemakers because the scientific discoveries which led to their creation were the product of lucky accidents?* You would have to be a deranged purist to adopt this view – and you would also end up hungry, bored and quite possibly dead. As with scientific progress, so too with business. The iPhone, perhaps the most successful product since the Ford Model T, was developed not in response to consumer demand or after iterative consultation with focus groups; it was the monomaniacal conception of one slightly deranged man.*
And yet, in the search for public policy and business solutions, we are in the grip of an obsession with rational quantification. A nervous and bureaucratic culture is closed-mindedly attaching more importance to the purity of the methodology than to the possible value of the solution, which leads us to ignore possible solutions not because they have been proven to be wrong, but because they have not been reached through an approved process of reasoning.
A result of this is that business and politics have become far more boring and sensible than they need to be. Steve Jobs’s valedictory injunction to students to ‘stay hungry, stay foolish’ probably contained more valuable advice than may be apparent at first glance. It is, after all, a distinguishing feature of entrepreneurs that, since they don’t have to defend their reasoning every time they make a decision, they are free to experiment with solutions that are off-limits to others within a corporate or institutional setting.*
We approve reasonable things too quickly, while counterintuitive ideas are frequently treated with suspicion. Suggest cutting the price of a failing product, and your boringly rational suggestion will be approved without question, but suggest renaming it and you’ll be put through gruelling PowerPoint presentations, research groups, multivariate analysis and God knows what else* – and all because your idea isn’t conventionally logical. However, most valuable discoveries don’t make sense at first; if they did, somebody would have discovered them already. And ideas which people hate may be more powerful than those that people like, the popular and obvious ideas having all been tried already.
We should test counterintuitive things – because no one else will.
1.17: The View Back Down the Mountain: The Reasons We Supply for Our Experimental Successes
Imagine you are climbing a large mountain that has never been climbed before. From the bottom, it is impossible to tell which slopes are passable, because much of the terrain is hidden behind the lower foothills. Your climb involves a great deal of trial and error: routes are tried and abandoned; there is frequent backtracking and traversing. Many of the decisions you take may be based on little other than instinct or good fortune. But eventually you do make it to the summit, and once you are there, the ideal route is apparent. You can look down and see what would have been the best path to have taken, and that now becomes ‘the standard route’. When you describe the route you took to your mountaineering friends, you pretend it was the route you took all along: with the benefit of hindsight, you declare that you simply chose that route through good judgement.
Is this a lie? Well, yes and no.* It may be that, in the course of your climb, you did end up at various times covering most or all of the optimal route.* What you say is also true in so far as it confirms that there is a navigable pathway to the top, which you did not know for sure when you first attempted the climb. And the route you describe does exist, so in that sense your description of the climb is perfectly accurate. However, in one respect it is a monstrous lie, because it completely misrepresents the process by which you progressed to the top. It pays an undue tribute to rational decision-making, optimisation and sequential logic – a tribute that really should be laid at the altar of trial and error, good instincts, and luck.*
As I write this, a TV detective drama is playing on the television, in which exactly the same sort of ‘selective editing’ is used to describe the apprehension of the murderer. The convention of detective drama is that you only refer to the information that has a bearing on the apprehension of the criminal, while in detective fiction, one or two red-herrings are allowed: however, in neither are the long hours of wasted legwork and time spent in pursuit of unrewarding lines of enquiry ever shown. As Alfred Hitchcock once said, ‘drama is just real life with the boring bits edited out’.
We constantly rewrite the past to form a narrative which cuts out the non-critical points – and which replaces luck and random experimentation with conscious intent. For instance, a friend of mine once mentioned that he had been attracted to buy his current home partly because it was close to an excellent restaurant, forgetting that the establishment opened after he had moved in. In reality, almost everything is more evolutionary than we care to admit. For a long time working in the advertising industry, I was conscious that in every proposal we made we presented post-rationalisations as though they had been rational all along.
I am not suggesting that we try to solve problems completely at random, with no plan as to where we want to go, and nor do I mean that data and rational judgement play no part in our deliberations. But in coming up with anything genuinely new, unconscious instinct, luck and simple random experimentation play a far greater part in the problem-solving process than we ever admit. I used to feel bad about presenting ideas as though they were the product of pure inductive logic, until I realised that, in reality, everything in life works this way. Business. Evolution by natural selection. Even science.
Even mathematicians, it seems, accept that the process of discovery is not the same as the process of justification. Cédric Villani is the holder of a Fields Medal, often described as the highest honour a mathematician can receive. He won his medal ‘For his proofs of nonlinear Landau damping and convergence to equilibrium for the Boltzmann equation’ and says, ‘There are two key steps that a mathematician uses. He uses intuition to guess the right problem and the right solution and then logic to prove it.’
We have conflated the second part of this process with the first. We assume that the progress must appear as neat in the moment as it can be made to seem in retrospect, and we want ideas to be as straightforward in their formulation as in their analysis – instinct and luck can play no part in finding a solution. However, the experience of discovery simply does not bear out this approa
ch. If it is true in physics and mathematics, it is probably even truer in questions of human behaviour.
In the foreword to a WPP annual report, Jeremy Bullmore uses as an example of discovery the legend of Archimedes in the bath – though he acknowledges that it may or may not be true, it illustrates an important truth nonetheless. So the story goes, King Hiero II, tyrant of Syracuse, provided his resident goldsmith with gold to make a votive crown for a temple, but when it arrived he suspected the goldsmith of having adulterated the gold with silver and of keeping the rest of it for his own purposes. He charged Archimedes with the task of establishing the truth – he knew the specific weight of gold, of course, but in order to determine whether the crown was made of pure gold, he needed to ascertain its volume.
A purely logical approach might have been to melt the crown down and form it into a brick – in which configuration its volume could readily be determined, but with the unfortunate consequence of destroying it. As Archimedes searched for a solution to the problem, Hiero’s impatience began to grow. The question never entirely left Archimedes’ mind, and it followed him into the bath, where he noticed that as he lowered his body into the bath, the water level rose, and as he began to leave the bath, the water fell. As Bullmore puts it, ‘absolutely everything he observed or encountered was potentially relevant to that insistent problem’, as if he knew that he had found a means of measuring the volume of complicated solids without knowing exactly how.
Bullmore notes that we tend to frown on those who admit their debt to intuition as opposed to carefully planned experiment. He imagines how Archimedes might have retrospectively described his discovery, if he were writing it up for a scientific journal:
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