Posts Tagged pessimism

Overcoming recklessness

Puzzled man

He was puzzled and grumpy

Quite a while ago I blogged about Learned Helplessness and I followed it up with an unsettling video in which at teacher induced learned helplessness in half a class by making them attempt impossible anagrams. So I was interested to find out about another bit of research which used impossible anagrams to get students into a bad mood.

In one of a pair of experiments by Webb et al. (2010) students were given impossible anagrams that they were told were easy in order to get them frustrated and annoyed.

Following this, they were presented with scenarios representing various opportunities for risky behaviour. The grumpy students were more likely to consider engaging in risky behaviour than the non-grumpy control group.

None of this is particularly surprising. It is reasonably well known that negative moods can lead to poor decision-making and unhelpful behaviours.

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Anticipation versus consummation

Sailing and a Key West Sunset by Asten

If you dream it will be plain sailing, you may never set off

In a recent post (What might have been), I discussed a way of looking back to the past called counterfactual thinking. In this post, I would like to start exploring the ways in which we look forward into the future and some of the pitfalls involved in that activity.

Being able to speculate about and imagine the future is an essential part of decision making and it should be an area of interest for anyone involved in supporting other people to make decisions.

However, the way we go about that speculation may have a profound impact on our ability to bring that future into existence.

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The benefits of pessimism

Normal Distribution

Normal distribution - thin tail

Last week I learnt a new piece of jargon. A ‘fat-tail event’ is something that you thought was virtually impossible, but it happened anyway. In theory, it could be very good or very bad, but it usually refers to something extremely unpleasant, such as a financial crisis.

The phrase comes from statistics. Many randomly occurring events (such as the height of the person you sit next to on the bus) are assumed to follow what is called a Normal Distribution (the classic ‘bell-shaped curve’). So you are more likely to sit next to someone around average height and less likely to sit next to someone really short or really tall. With the Normal Distribution the probability of something really unusual happening tails off really rapidly the further away you get from the average — it has a thin tail.

Fat Tail

See the fat tail!

However, some things in the real world don’t follow the Normal Distribution curve. Instead of a thin tail, they have a fat tail. This means that certain extreme possibilities are more likely than you might think.

I was quite pleased to be able to use my newly discovered jargon in a session on negotiation skills I was running last week. I was talking about the usefulness of assessing any negotiated deal by imagining how it would look if subsequent events turned out a lot better or a lot worse than you were expecting (e.g. your fixed-rate mortgage doesn’t look so good if the Bank of England cuts rates to zero).

A black swan

Does this black swan have a fat tail?

A related term for unexpected events is a Black Swan, coined by author Nassim Nicholas Taleb. This is the unexpected event which you could not have predicted based on your previous experience and derives from the fact that, until they were discovered in the 17th century, most Europeans thought that black swans could not exist.

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