Why Optimism Bias Is Not Good

As the investor closed the 1 million dollar deal, he felt confident, engaged, and unbreakable. In a rising economy, he made very positive predictions about the housing market, and profits were the only thing on his mind. Then the housing bubble burst. This article is about what happened with the investor, the positive and negative sides of the optimism bias; the belief in our own superior future life which affects our perceived susceptibility to risks.

Representativeness Heuristic

There are four distinct reasons why the optimism bias occurs. The first has to do with the desired end-states of comparative judgements. People are motivated to perceive/portray their risk as less than the risk of others because this is what they want to believe or want others to believe. This can be used for self-enhancement, self-presentation, and/or personal control. People are motivated to present themselves (and others) with a better, more in-control, world than there really is.

The second reason for the optimism bias lies in the cognitive mechanisms that guide judgement. Part of the construct is the representativeness heuristic, options that are more representative of the event/entity, from the viewpoint of the observer, are more often remembered. A singular focus on the target and estimating your personal risk lower than average are two other cognitive mechanisms that enhance the optimism bias.

Our information is not perfect and the third reason for the optimism bias is due to the difference in the amount and type of information available about the self versus the average person. The person-positive bias is the tendency to evaluate an object more favourably the more it represents a human being. Egocentric thinking causes people to consider desired outcomes and fail to consider adequately impediments that are likely to occur. At the same time, we underestimate the average person’s level of control.

The underlying affect (not to be confused with effect) is the final reason for the optimism bias. An affective state facilitates access to mood-congruent memories and cognitions. Because the ambient mood (for most people) is positive, positive memories and cognitions prompt judgements of low personal risk and focus the attention on the desired outcomes. Together all four processes turn us into ‘happy thinkers’, and that can certainly have some very positive effects.

Longer Life

Having introduced the optimism bias, it is time to look at the positive side. A very big positive aspect of the optimism bias is the effect on the life span it can have. Research has found that people in hospitalization will live longer if they are more optimistic about their lifespan (when other conditions are similar). The specifics about the why, and how are very debatable. What stands is that people who are more optimistic about the future, who for instance think more positive thoughts because of the underlying affect, tend to live longer.

Also in non-life threatening situations, the optimism bias has a positive effect on our perception of the world around us. People with more optimism (which in objective terms is not justifiable) have a better mood. They are less prone to depression and are more willing to face challenges. When looking at the investment banker this has resulted in a bad ending, but what about the entrepreneur who is launching an untested, new product, some optimism will help him push further. Even in the sight of backlashes and bad results, the optimism bias helps keep our emotions on the upside!

More Accidents

Your health and mindset can be improved by having an optimism bias. But through the same mechanics, severe damage can be inflicted. About 85% of people consider themselves to be better than average (50%) drivers, something that is quite impossible to be true. People, therefore, overestimate their skill in driving. Studies have found that people with optimism bias, especially considering their driving skills, are prone to more car accidents. The younger, and male, participants were considered to have the most optimism bias.

Because of egocentric thinking people also underestimate risks in other domains. One of these domains is smoking. People who smoke are aware of the risks and correctly estimate that they are at more risk of lung cancer than people who do not smoke. The optimism bias, especially egocentric thinking, allows people who smoke to neglect the risks for themselves and therefore underestimate the risk of lung cancer severely when compared to the risk they assign to other smokers.

Bubbles

Investing in stock has yielded positive results year after year. Investment bankers that were around for not too long may even have never seen a single big loss. Representative for investing was profit, not risk, nor loss. The desired end-state of investing was profits, and everyone was overestimating the profitability of the mortgage market (among others). Egocentric thinking finally eliminated any thoughts of losing money and people were creating a bubble, to large to survive. Exactly five years ago Lehman Brothers declared bankruptcy, the end of the optimism bias era, the start of the crisis. The banker from the beginning of the article now is back on the market, more cautious than before, fresh with memories of toppling banks and unsellable houses. He has temporarily been relieved of his optimism bias, but will this effect last? What will be the future of our economy and how will we prevent this from happening again? These are subjects for a later article.

Some final remarks. The optimism bias takes away some sense of reality. It is a two-sided coin. The one side allows us to be happier, and even impact our health to our benefit. On the other side is more risk-taking behaviour, worse judgement of health risks and bad investors. Enjoy the benefits, but be cautious about the downsides.

References & Further Reading:

1. Shepperd, J. A., Carroll, P., Grace, J., & Terry, M. (2002). Exploring the causes of comparative optimism. Psychologica Belgica, 42(1/2), 65-98.

2. Sharot, T. (2011). The optimism bias. Current Biology, 21(23), 941-945.

3. DeJoy, D. M. (1989). The optimism bias and traffic accident risk perception.Accident Analysis & Prevention, 21(4), 333-340.

4. McKenna, F. P., Warburton, D. M., & Winwood, M. (1993). Exploring the limits of optimism: The case of smokers’ decision making. British Journal of Psychology, 84(3), 389-394.

5. Prabhakar, T., Lee, S. H. V., & Job, R. F. S. (1996). Risk-taking, optimism bias and risk utility in young drivers. In ROAD SAFETY RESEARCH AND ENFORCEMENT CONFERENCE, 1996, COOGEE BEACH, NEW SOUTH WALES, AUSTRALIA.

6. Cummins, R. A., & Nistico, H. (2002). Maintaining life satisfaction: The role of positive cognitive bias. Journal of Happiness Studies, 3(1), 37-69.

7. Schweizer, K., Beck-Seyffer, A., & Schneider, R. (1999). Cognitive bias of optimism and its influence on psychological well-being. Psychological Reports,84(2), 627-636.

8. Sharot, T., Riccardi, A. M., Raio, C. M., & Phelps, E. A. (2007). Neural mechanisms mediating optimism bias. Nature, 450(7166), 102-105.

9. http://en.wikipedia.org/wiki/Optimism_bias

10. http://www.amazon.com/The-Optimism-Bias-Irrationally-Positive/dp/B00D1GCC5Q

3 Factors for Effective Meetings

3 Factors for Effective Meetings

Business meetings can be a real annoyance and are one of the biggest wastes of time throughout a business. They are both long, and mostly unnecessary. People become distracted, time limits are not met, and result in little to no action. This article will target to counter all of these negative aspects of business meetings. They can be productive, fulfilling, short, effective, and fun! Great preparation, effective meetings, and a thorough follow-up are the three central topics discussed in this article.

Great Preparation

The beginning of an effective meeting should, in most cases, be the end of it. Think about the need for the meeting, what is its goal? Is it really necessary to speak this over in person? Or are other alternatives a better solution, for instance email. When the purpose of a meeting is solely to inform others, not to discuss or make decisions, sending out an email with the same information can be many times more effective. Another alternative is a quick phone call. If you need to share or discuss some information with only a few people, calling them shaves off decision time. When you yourself are invited to attend a meeting, consider your necessity at that meeting, and contemplate the alternative ways you can more easily contribute.

When you have decided to call a meeting, make sure that only the people who need to be there, are there. They will most likely be most invested in the topic you are discussing. A small engaged group also allows for more effective decision making during the meeting. The select group that you have invited should have had the proper preparation. This means that you have sent the agenda in advance, and have attached all the relevant documents. This easily shaves off 30 minutes of every meeting concerned with getting everyone up to speed. Do also share your powerpoint (if there is one), this will allow for people to get a general view of the presentation and will focus their attention on you, instead of the screen, when presenting.

Effective Meetings

Effective meetings start with the right facilities. Without a beamer, the presentation will not be possible. And without the presentation itself, you are dead in the water. Effective meetings take place in an appropriate setting where technological needs are met. As a presenter, you will have your presentation on USB and email. And other technical requirements, like cables and markers, are available. Good facilities allow for optimal support of effective meetings.

The goal of a meeting should be the guiding star during the meeting. Misunderstanding the goal of a meeting could result in a large clash between co-workers. When some think about discussing a point, others ready to make decisions, and still others only to inform, your meeting will not go smoothly. Making clear what the goal of a meeting is can prevent these troubles. And when the meeting requires multiple steps, (e.g. informing and making a decision) then clearly indicate at which step you are. A clear goal during a meeting will result in streamlined cooperation, in which each goal can be pursued effectively.

In support of the goal of your meeting is the agenda. Without an agenda, there will be no direction to the meeting, and it will end without direction or goal. An agenda serves multiple goals. The first is to define the parameters of what you will discuss, and what not! It will also give structure, preferably with important points at the beginning. And when your agenda is really complete, it will also indicate the amount of time the meeting will take. With an agenda, you will define the meeting, give it direction, structure and also help with preparations.

As the chairman of a meeting, you care responsibility over the time. Set a starting time (and start at that time), and set an end time. Make sure that everyone gets to say their word. Even encourage shy people to participate. But refrain from repetition, once something is said, it has no purpose of being repeated. Of course, there is room for conclusions. These conclusions will mostly consist of calls to actions (tasks). An effective leader takes good care of the time, speed, and action list.

All participants of a meeting share responsibility for the direction of their attention. Distracted participants ensure an ineffective meeting in which people will not give each other the attention they deserve. This can be a result of multitasking (e.g. answering your email), having your head in the clouds, or being distracted by something. Making it a rule not to bring cell phones, only inviting the people who need to be there, letting go of unrelated thoughts, and eliminating distractions will counter these processes. In effect, this will lead to attentive participants who have a continuous focus on an effective meeting.

Thorough Follow-Up

No matter how effective a business meeting was, the real work has to happen outside of the meeting (and because of that, the time spent in them should be minimal). An effective leader follows up on the tasks that result from the meeting. He is not afraid to confront employees about the progress of tasks. And at the same time employees are not afraid to ask for help, and are willing to help each other where needed. When the next meeting is due, you should have a good overview of the progress beforehand. And during the meeting, make sure that everyone will be accounted for. Following up on tasks allows for a well-prepared leader, that facilitates the progress of the company.

Effective meetings are dependent on many factors. The above-mentioned ones are only a grasp in the large jar of possible techniques that you can explore to make your meetings more effective. With these, and other, techniques you will have prepared meetings, with a set agenda, a time frame, goal, effective discussion, and great follow-up. Good luck!

References & Further Reading:

1. http://theskooloflife.com/wordpress/why-most-meetings-are-huge-waste-of-time/

2. http://humanresources.about.com/od/meetingmanagement/a/meetings_work_3.htm

3. http://holoom.com/2010/01/04/talking-is-not-the-goal-of-a-meeting/

4. http://blogs.wsj.com/speakeasy/2012/09/20/why-business-meetings-are-often-a-waste-of-time-and-productivity/

5. http://leadership.uoregon.edu/resources/exercises_tips/skills/leading_effective_discussions

6. http://www.forbes.com/sites/lisaquast/2013/03/11/career-boot-camp-7-steps-to-lead-effective-meetings/

7. http://www.forbes.com/sites/victorlipman/2013/03/01/5-simple-steps-to-more-efficient-effective-meetings/

8. http://ctb.ku.edu/en/tablecontents/sub_section_main_1153.aspx

9. http://www.wikihow.com/Run-an-Effective-Meeting

10. http://www.meetingwizard.org/meetings/effective-meetings.cfm

11. http://thestrategyguysite.com/strategic-business-planning/5-tips-for-running-effective-meetings/

12. http://www.linkedin.com/today/post/article/20130701022638-22330283-a-simple-rule-to-eliminate-useless-meetings

13. http://www.linkedin.com/today/post/article/20130819190438-36052017-cut-your-meeting-time-by-90

On Becoming a Flexitarian

Originally posted on 13 September 2014 (so when I was almost 24). I’ve since become vegetarian and try and only non-animal products in many cases (aka vegan).

“A man can live and be healthy without killing animals for food; therefore, if he eats meat, he participates in taking animal life merely for the sake of his appetite. And to act so is immoral.” – Leo Tolstoy

The Flexitarian or semi-vegetarian diet means eating a mostly vegetarian diet but occasionally eating meat. People choose a flexitarian diet for multiple reasons. Some (including me) are against the animal suffering, others are concerned about the environment, and others do it to lose weight (and be healthier). In this blog, I will argue the benefits of the flexitarian diet and how it has worked out for me in the past few months.

Animal Suffering

I believe that animals in themselves have an intrinsic ethical value. I argue this from a consciousness perspective, the more conscious (or aware) an animal is of its environment, the more its life should be valued. It is for this reason that we people value the lives of other people, we have full consciousness and can make reasoned decisions. A more limited level of awareness is present in animals, an elephant for instance ‘mourns’ for the loss of a life partner. A pigeon that pecks a lever to get him food also shows awareness, but this is a lesser form than that of the previous example. I believe that the more conscious or aware an animal is, the more we should value its life (read more in a previous essay).

Because animals have an intrinsic ethical value, I believe that it is wrong to harm them. The problem is that we are doing it on a large scale. We put chickens in farms with millions stuffed together. We cut off their beaks without anaesthetics so that they will not peck each other to death for being stuffed so close together. In other cases we separate mothers from their children right after birth, all the while knowing that these animals are conscious beings. And we feed animals until they can almost not stand up straight anymore, just so our meat can be just a bit cheaper. And as I will argue further on, this suffering is not needed in order for us to have a balanced diet.

Environment

My second argument is concerned with the environment. The process from the birth of an animal to the meat you can buy in the grocery store is one that puts heavy demands on our environment. Here are some numbers: 40% or our land is occupied by animals meant for human consumption, 13.5% of CO2 expulsion is caused by animals meant for human consumption, 1/3rd of global fresh water is used in the production of meat. This means that the burden on the environment is of epic proportions. And not only do animals for human consumption take up space, produce CO2, and consume a lot of water, they also need to be fed grains and wheat that could otherwise have been used by us humans. With the current state of technology, it is in no way responsible to eat a lot of meat.

Losing Weight & Becoming Healthier

A third argument for cutting back on meat is the health benefit associated with it. People who eat a flexitarian diet – on average – weigh less than (full time) meat-eaters. Eating a more plant-based diet also helps keep cholesterol and blood pressure in check, and heart disease (number one killer) at bay. Two reasons for this are 1) less consumption of cholesterol & fat, and 2) more fibres. As can be noted these benefits are the ones that are associated with a vegetarian diet and the benefits will thus increase if you cut out meat all together. One thing to keep in mind is the chance of anaemia, keep eating things with iron to prevent it. Another concern could be your protein intake, but many alternatives are available, ranging from beans to tofu.

My Journey – Why Flexitarian and not Vegetarian

So why not vegetarian? Convenience. At social events, company dinners or family gatherings it prevents me from going through a big hassle. I know that animals have suffered in making the food, but at the same time the food is already there and I am not the person to force my own eating habits onto others. But when it comes to my own house and food I have, that is all vegetarian. My sandwiches do not contain any meat, and when I make dinner it is all vegetarian (which has been cool, because I can experiment with all kinds of ingredients I have never eaten before).

Conclusion

Some people might argue that there is no such thing as semi-vegetarian, you are either a meat eater or not. I believe that making small steps is already an improvement over eating meat every day. Being a flexitarian is really easy and maybe something that many more people would subscribe to instead of going full-vegetarian. It is beneficial for your health, the environment and the animals. So the better proposal may be: Why not?

“If slaughterhouses had glass walls, everyone would be a vegetarian.” – Paul McCartney

More on Flexitarianism:

http://health.usnews.com/best-diet/flexitarian-diet – About the Flexitarian diet

http://www.webmd.com/diet/flexitarian-diet – More about the Flexitarian diet

http://vegetarian.about.com/od/glossary/f/flexitarian.htm – What is Flexitarian

Intrinsic Ethical Value

Currently, I am taking a Coursera (online university courses) on Practical Ethics. Next to lectures and readings the course also consists of writing assignments, this is the fourth (and last) one. In this short essay, I am arguing for the intrinsic ethical value of sentient animals. Written May 2014.

Do animal or plant species have intrinsic ethical value?

No. Only animals that possess consciousness (sentience), partly or wholly, have an ethical value. This argument is made in consideration of two schools of thought. Holmes Rolston’s “respect for life” and Peter Singer’s reaction. It is also assumed that the environmental ethics discussed take into account not only the human interest (anthropocentric) but also considers the interest of animals (biocentric) and plants (ecocentric). I will argue why there is no intrinsic ethical value in all plants and animals.

Rolston argues that value, or valuing, can be done outside of consciousness. He argues that without consciousness an animal or plant is still able to determine right from wrong. A plant that sits in a dark room with only one source of light will grow towards this light source. A chicken will always choose to stand on grass over dirt. From very conscious beings (e.g. humans) to basic organisms (e.g. non-arthropod invertebrate animals), every animal and plant values, and has value.

Singer argues that not everything has intrinsic value. He argues that consciousness includes a certain amount of awareness. Only when an animal (or plant) shows signs that it is aware of the act of valuing, then it has intrinsic ethical value itself. An elephant that mourns for its lost partner exhibits that it is valuing. A pigeon that pecks at the lever that will get him food, maybe so. But not a plant that is driven solely by mechanical drives to grow towards the light.

One might then argue that we are also driven by mechanical processes, that our genes are the driving force behind all of our decisions. Upon abstraction, this argument certainly holds and is strongly defended by Richard Dawkins (in The Selfish Gene) and alike. The argument, however, does not hold when you try and add up all mechanical processes that lie beneath all our judgments. This is where Singer argues that our consciousness makes the difference. We are aware of the processes that go on, we can judge them ‘from a distance’ and use our consciousness to ignore the mechanical needs.

To further strengthen this argument one can look at the mechanical processes from the other side. If mechanical processes are the only thing that is needed for intrinsic ethical value, then does this include heat-seeking missiles? A heat-seeking missile will fly towards the heat generated from engines from air or land targets. It is however difficult to detect value, or good for that matter, in this action. Without consciousness, there can be no value.

But what if we take a more holistic approach and look at the intrinsic ethical value of animals and plants as ecosystems. Within an ecosystem, everything from the biggest animals to the smallest bacteria play vital roles in preserving the balance (or deal with the continuous change). Preserving an ecosystem has ethical value, but not all specific species and animals are granted the same recognition. When a species is not conscious of its contribution, but only reacts to mechanical processes it will not be ‘bad’ to not preserve it. There is no harm done when a non-conscious animal or plant is removed, no pain will be felt. It is only the pain for conscious animals (e.g. humans) that has intrinsic value.

This does mean that other animals should have the same equality of consideration that we extend to human beings. A monkey that loses his home due to deforestation will experience pain. Differing in the level of consciousness, or sentience, the intrinsic ethical value of animals can be considered. This implies that humans are not the only species that have intrinsic value, but does not include plants or animals without sentience.

A final note must be made about the level of consciousness or sentience. In this argument, it can be defined as the ability to feel. This is the ability of any entity to have subjective perceptual experiences (qualia). It is a minimalistic way of defining consciousness. Through observation (or interaction) sentience can be detected in many animals.

Intrinsic ethical value lies within all animals that are sentient. Plants and animals that lack this criteria do not have an intrinsic ethical value. Animals should therefore be treated with the same moral importance as humans. And even our (non-living) environment deserves care, because of the value we humans ourselves give to it.

References & Further Reading:

1. Peter Singer, Practical Ethics, week 11; Topic 11: Environmental Values (1): Is Anything Other Than Sentient Life of Intrinsic Value?

2. Dale Jamieson, ed., Singer and His Critics (Oxford, UK: Blackwell Publishers, 1999). Pages 247-268. http://lamar.colostate.edu/~hrolston/Singer.pdf

3. Carlo Enrico Lombardo, Values and Information in Rolston’s Environmental Ethics. http://www.academia.edu/3046059/Values_and_Information_in_Rolstons_Environmental_Ethics

4. Aleksander, I. (2002) Understanding information, bit by bit: Shannon’s equations. In Farmelo, G. (Ed.) It Must be Beautiful: Great Equations of Modern Science. Pp. 213–230. Granta Books, London.

5. Derr, Patrick George; Edward M. McNamara (2003). Case studies in environmental ethics. Rowman & Littlefield. p. 21. ISBN 978-0-7425-3137-6

6. Judi Bari (1995). “Revolutionary Ecology: Biocentrism & Deep Ecology”. Alarm: A Journal of Revolutionary Ecology.

Gameful Mindset

Life is a game.

That’s the premise of the gameful mindset – seeing life as a series of challenges. Adopting a gameful mindset can change a brick wall into something you have to do a double jump to get over.

The concept comes from Jane McGonigal, senior researcher at the Institute for the Future and scientist who looks how games can improve our lives. Between her TED Talk and several books, she explains how games specifically and a gameful mindset, in general, can help your life.

Games

“If I’ve learned anything from video games, it is that when you meet enemies, it means that you’re going in the right direction.” From first-person shooters to Super Mario, when things get more difficult you know you are on the right path.

In games, you press save and continue walking towards the danger. But how does it apply to real life?

In Real Life

When we are confronted with challenges we fall outside our comfort zone. Our instinct is to go back to our comfort zone and feel safe again. But in this way, we will never progress and discover new things.

What games have taught me is that you just need to press save. Just think about the great things you have. You have a roof over your head, you have friends and family to support you. What I’m saying is that your comfort zone is really big and that you are only changing a very little aspect when confronted with a challenge. Take a moment to look at your life (press save) and take on the challenge.

Level Up

Jane McGonigal and others have actually implemented a gameful mindset into real life. Two applications, SuperBetter (available in the App Store) and Habitica (awesome website), make it possible for people to gain support, tackle challenges and improve their lives in a fun and engaging way.

What I want to leave you with it the idea that life can be like a game. You won’t always defeat the boss at the end of a level or win the race, but playing in itself is already worth it.