What is the REAL effect of circumcising men?

Those who grow up in the U.S. are often surprised to find out that in many European countries almost no men are circumcised. In the U.S., where the majority of men have had the procedure performed on them, it is pretty common to hear people say that foreskin is unclean, ugly, or even unhealthy. On the other hand, Europeans tend to find the idea of circumcision bizarre. “Why would you cut off a healthy part of your body?”, they wonder. And “How would you feel about a culture that cut off their children’s ear lobes?”

Even medical experts in the U.S. and Europe can’t seem to agree about the benefits and costs. As one fairly recent paper put it:

The American Academy of Pediatrics recently released its new Technical Report and Policy Statement on male circumcision, concluding that current evidence indicates that the health benefits of newborn male circumcision outweigh the risks. The technical report is based on the scrutiny of a large number of complex scientific articles. Therefore, while striving for objectivity, the conclusions drawn by the 8 task force members reflect what these individual physicians perceived as trustworthy evidence. Seen from the outside, cultural bias reflecting the normality of nontherapeutic male circumcision in the United States seems obvious, and the report’s conclusions are different from those reached by physicians in other parts of the Western world, including Europe, Canada, and Australia. In this commentary, a different view is presented by non–US-based physicians and representatives of general medical associations and societies for pediatrics, pediatric surgery, and pediatric urology in Northern Europe. To these authors, only 1 of the arguments put forward by the American Academy of Pediatrics has some theoretical relevance in relation to infant male circumcision; namely, the possible protection against urinary tract infections in infant boys, which can easily be treated with antibiotics without tissue loss. The other claimed health benefits, including protection against HIV/AIDS, genital herpes, genital warts, and penile cancer, are questionable, weak, and likely to have little public health relevance in a Western context, and they do not represent compelling reasons for surgery before boys are old enough to decide for themselves.

When experts disagree we’re in a bind. We have little choice but to fall back on our own thinking and research to separate bias from the truth. There are, of course, many people who circumcise their children for religious reasons. For those who have no religious reason, is there any reason to do it?

It seems to me  that we can  formulate a pretty strong argument about circumcision, before we even start to dig into the evidence:  circumcision should only be performed routinely on all male infants if we can identify strong benefits to the child from doing so. That is, without a strong reason to perform the procedure, we should not do it. I conclude this for three reasons:

  1. Some of the costs of circumcision are obvious to everyone and very real (e.g. the monetary cost to parents and insurance companies, the pain inflicted on the baby, and the very occasional surgical error, maiming and death). Performing the procedure only makes sense if there are compelling positives that outweigh these well-known costs.
  2. The foreskin is a natural part of the human body, and therefore very likely promotes a useful survival or mating purpose. There have been different proposals for what this purpose might be (like keeping in moisture, protecting the penis, or increased sexual pleasure). But one can reasonably assume that foreskin is not merely a fluke, and therefore may well have some use we care about, even if we don’t know quite what that use is.  Because of this, it seems we should not remove the foreskin unless there is a pretty useful reason to do so.
  3. Since adults can elect to get circumcised, we should be careful about forcing children to get this procedure at ages where they are too young to make such a choice. If a strong general reason to circumcise children is not found, it would make sense to let each person choose whether they want that procedure when they are old enough to make such a choice.

This line of reasoning leads us to ask: is there compelling evidence that circumcision adds significant value in the form of increased health, improved sexual function, or reduced disease transmission?

Well, you can take a look at the claims and evidence yourself. Here is a table I compiled of the many, many alleged pros and alleged cons of circumcision that I’ve heard made by people on the different sides of the debate. For each claim, I try to link to some studies that support or deny that claim. I focus on meta-analyses of randomized controlled trials, and randomized controlled trials themselves, since they provide far stronger evidence than other study designs. This does not provide a comprehensive set of all studies on male circumcision of course, nor is it a formal systematic review of the literature. But some conclusions quickly emerge:

  • Some of the alleged pros and cons that people throw around have randomized controlled trials contradicting them, but continue to be used to support agendas anyway.
  • A number of studies are themselves contradicted by other studies (for instance, various results about the impact of circumcision on sexual pleasure seem to point in opposite directions).
  • Circumcision does seem to substantially reduce the rates of transmission of HIV from women to men in countries where HIV prevalence is very high.
  • Even so, it’s not obvious that this HIV reduction effect is worth it for those who practice safe sex in areas of the world where HIV prevalence is low.
  • There is some (small) amount of evidence that hints that male circumcision may make woman more at risk for HIV, but without more studies it’s hard to say.
  • Many of the studies used to support claims on both sides are of low quality (for instance, a lot of the evidence of reduced urinary tract infections for circumcised infants is based on observational studies, which are very bad for answering this sort of question…we need randomized controlled trials).
  • This topic is extremely complicated! There are tons of different claims being made and there are inconsistent research results for some of the claims. In many cases, few studies have ever been done in the first place, and even fewer high quality studies have been done (though keep in mind that this table is not anywhere close to a complete listing of all circumcision studies).

Click here for the complete table with studies that support and deny each claim.

ALLEGED Pros of Circumcision ALLEGED Cons of Circumcision
Reduction in HIV risk for men Increase in HIV risk for men (especially immediately after surgery)
Reduction in HPV risk for men Monetary cost to parents and health insurance companies
Reduction in HSV II risk for men Performed without child’s consent or ability of male to choose what he wants
Reduction in general STI risk for men Painful procedure
Reduction in penile cancer risk Gives infant permanent cultural or religious branding without consent
Reduction in Urinary Tract Infections for men Risk of surgical complications, infections and error
Reduction in penile pain and injury from sex Increase in HIV risk for women
Increased ease of orgasm for males Risk of getting STIs from circumcision procedure
due to poor sterilization (in some countries)
Increased sexual satisfaction for female partners Reduction of sexual satisfaction for female partners
Consistency with cultural norms in some areas Reduction of sensitivity or sexual satisfaction for males
Hygienic benefit when bathing is difficult (e.g. military) Loss of lubricating effect of foreskin
May make child look more like father Causes less condom use
May make child look more like peer group Increased general STD transmission to women
Psychological trauma or nervous system shock to infant
Loss of some other possible evolutionary function of the foreskin
Lessened ability to control pacing or timing of orgasm

 

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Where My Perfect Reasoning Utterly Failed

Does warm water sometimes freeze faster than cold water when placed in the same conditions? “Absolutely no way,” I said, a mere minute after I heard the claim. “People sometimes claim that NASA faked the moon landing too,” I thought to myself.

I pointed out why this claim is impossible. As warm water cools it must eventually reach the same temperature that the cool water started at. From that point on, the warm water will behave just like the cool water, but it will have taken the warm water a while to even get into that state. Freezing occurs at the same temperature for both warm and cold water, but warm water of course will take longer to get to that temperature.

photograph by Dingske

photograph by Dingske

This isn’t quite 1+1=2, it’s more like 23+14=37. I double checked my answer and was 98% confident. It’s amazing what some people will believe, and how powerful reasoning is at solving these sorts of problems.

But I was wrong. And not just a little bit. In fact there are tons of ways that warm water might be able to freeze faster. This is the so-called Mpemba effect, observed by the likes of Aristotle, Descartes, and Francis Bacon.

The fact that the water has previously been warmed contributes to its freezing quickly: for so it cools sooner. Hence many people, when they want to cool hot water quickly, begin by putting it in the sun.

-Aristotle

My wrongness here isn’t so much about being wrong about the effect, per se. The extent to which this effect is real, and under exactly what conditions, can reasonably be debated. My wrongness is in being convinced I was right when I couldn’t have known I was. I couldn’t possibly have ruled out all the possibilities in a single minute. For example, I didn’t even consider these ideas that came up after two minutes of googling:

  • Evaporation : the warm water evaporates, meaning there is less water to freeze.
  • Frost: the cool water may be more likely to freeze from the top (with the frost trapping in further heat) whereas the warm water may be more likely to freeze from the bottom and sides.
  • Convection: warm water and cold water produce different currents, which could alter the heat distribution.
  • Supercooling: if free of impurities and in the right conditions, water can actually drop below freezing temperature without freezing, and the propensity for supercooling might be affected by the starting temperature.
  • Conductivity: the hotter liquid might melt an existing layer of frost that is preventing the liquid from directly touching a much colder surface.
Mpemba supercooling

Mpemba supercooling hypothesis

What could have prevented me from making such a ridiculous error? How could I have noticed that I was being insanely overconfident? There are a few signs that should have tipped me off:

  • Lack of expertise: The physics of heat and fluids is outside of my domain of expertise. I should have recognized that this is not a subject I know a lot about and so been more skeptical of my own opinions.
  • A simple model: I was employing a very simple model for the situation (involving just the temperature of the water). While beautiful, and easy to work with, really simple models rarely capture all the details of a situation. For instance, I didn’t consider the possibility of evaporation or frost, because those variables weren’t included in my model. If you’re using a simple model, you should consider whether you’re missing important factors.
  • Insufficient time: If you haven’t thought about something for very long yet you are already very opinionated, you might want to think about it longer.
  • Didn’t consider alternatives:  I didn’t even try to think of ways that this effect could be real. Instead, I came up with an argument why it couldn’t be real, and that argument sounded convincing to me, so I stopped thinking. This problem is the big one. So here’s a 30 minute free mini-course I designed to train you to avoid exactly this problem.

Reasoning is only as good as the reasoner. And we humans don’t have the best track record. The trouble is, it’s easy to find arguments that seem totally convincing. The trick is that we shouldn’t just try to convince ourselves that we are right. We should try to convince ourselves that we are wrong. If we do that in earnest, we’ll be much more likely to end up with the right opinion.

 

Experimental results on the Mpemba effect, as reproduced in: http://qoptics.byu.edu/Physics416/FirstReading.pdf

Experimental results on the Mpemba effect, as reproduced in:                          http://qoptics.byu.edu/Physics416/FirstReading.pdf      The Mpemba effect: When can hot water freeze faster than cold? (Monwhea Jeng, 2006)

 

 

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Convincing Your Future Self

You have control over yourself for the next eight seconds. Maybe even the next three minutes. Right now you can choose to go to the gym right now. Right now you can choose to start something difficult (but valuable) that you’ve been putting off for a long time. But right now you can’t choose to go to the gym tomorrow. You definitely can’t choose to quit your job a year from now. Because tomorrow if you don’t feel like it, you’re not going to go to the gym, regardless of what the you of today decided. And a year from now, who the hell knows what you’ll want to do. By that point, you may have given up on ever finding a job that you don’t hate. A year from now you may have forgotten the lessons that the you of now knows.

Your future self

Sometimes it’s useful to model yourself in the future as a different person. This person is a great deal like you, to be sure, but it’s not you precisely. You can’t choose what this future person will do. This person’s goals and values may not quite be yours. And not just because the you of the future will (hopefully) be wiser, but also because the you of the future will be truly different. 

There’s an old cliché: If you want to make sure that something gets done right, do it yourself. Well, your future self isn’t quite you. Your future self may not be as motivated as you are now. The you of the future may have lost your ambition, your sense of being able to make things better, or your excitement. That you may not even agree with you about what right means. So if you want to make sure something gets done right, do it right now. Don’t trust that stranger of the future.

You can’t make your future self do what you want, but you can give your future self suggestions. We all give ourselves future suggestions for tomorrow (with notes) or for next week (on our calendars), but too rarely do we give ourselves suggestions for months or years from now. And here’s a great way to do it:

FutureMe.org

Futureme lets you send yourself an email in the future (anytime at least 30 days from now). You can even include a picture of what you look like now (pointing a finger, perhaps). It could be that you want to remind yourself next month about why it’s worth continuing your pet project, in case you start slacking. Or maybe you want to remind yourself in a year about your long-term goals, to help make sure you stay on track. Or maybe in 5 years you want to ping yourself with a recap of some of your core values, and why it’s so important to live by them.

Talk to your future stranger.

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How much should you actually tip doormen in New York City for the holidays?

If you live in a building with doormen or doorwomen in New York City (Manhattan, Brooklyn, etc.), you are probably confused right now about how much you are expected to tip them for the holiday season. Nobody I’ve spoken to seems to really be confident in their answer to this and articles give conflicting advice on what a reasonable bonus is. That’s why I made this little program to help solve the problem.

Just click below, and answer a few quick questions in order to get an estimate of how much you should tip your doormen. You’ll also get a fully automated explanation of how the calculation was performed, so you can make sure it makes sense to you.

Run the Doorman Holiday Tipping Calculator

Happy Christmas, Hanukkah, Solstice, New Years, Zamenhof Day, etc.!

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When should you seek criticism?

A while ago I wrote a post about the incredible value of seeking criticism. Today, someone asked me how we should decide when to seek criticism. Or, as he put it, when should we expect other people to have a better understanding of us than we ourselves do?

Here are some rules of thumb. It’s generally a good idea to seek criticism from others when:

  1. You care about having an accurate understanding of how others perceive you. It is easy to go for decades without realizing that your posture makes you seem like you lack confidence, or that people find the speed at which you talk hard to follow. Those that know you well and new acquaintances can provide different sorts of information in this area. Friends have a hard time remembering what it was like to see you for the first time (so can’t comment as usefully on surface level information), whereas acquaintances will be unaware of how you act when you’re not around new people.
  2. You have an important weakness that it pains you to think about. When ideas are painful to consider, we often don’t think about them as deeply as we should. That means we can easily end up with only a shallow understanding of the weaknesses we most dislike about ourselves. Others who are affected by our weaknesses can help us understand them better if we ask. But when receiving this sort of criticism we run a serious risk of feeling angry and defensive at what we hear, so we have to be sure we are ready to receive this criticism before we ask for it.
  3. When you are trying to enhance your relationship with a particular person. Even if someone likes you a great deal, there are probably at least a few things you do that he or she would rather you didn’t, or a few things you don’t do that he or she would rather you do. Asking for honest feedback on how you could be a better friend, or which behaviors the person would prefer you stop, and then making those adjustments can be a great way to make that person (even) happier with the relationship.
  4. When you want to accurately understand the extent of your skill, and you’re talking to someone much more skilled than yourself. Sometimes, it’s valuable to know exactly where we stand in terms of skill. Seeking criticism from someone more expert than yourself can help settle questions such as whether you really have what it takes to play professional soccer, or whether a physics PhD is really for you. That’s not to say that you can’t occasionally exceed the expectations even of experts. But knowing where an expert thinks you stand can give you a more realistic sense of your capacity.

There are of course other situations besides those lists above when seeking criticism is valuable, but the above list highlights some times when it can be especially useful to do so. So seek criticism in order to better understand how others perceive you, to know your weaknesses, to enhance your relationships, and to assess your true level of skill.

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Contradictory Insight

I was recently having a conversation with Geoff A. and Jana G. about how to systematically generate surprising ideas.  I then sat down and created this program with them based on our discussion. Take a minute to try it, and generate some insight that you’ve never considered before!

Click here to run Contradictory Insight!

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Which Risks of Dying Are Worth Taking?

First, click here to figure out your chance of dying tomorrow.

Is it worth taking a 1 in 100,000 chance of dying , in order to experience the novel thrill of sky diving? Is a 1 in 500,000 chance of death worth it to go bungee jumping?

It’s hard to know whether these risks are reasonable, because numbers like 100,000 or 500,000 feel so abstract to us. To think more clearly about these numbers, it helps to get our intuitions engaged.

We can start by figuring out the daily risk of dying that we automatically face every day. My “death calculator” tool above will compute yours, as estimated from your gender and age. For instance, in the United States, a 30 year old man has about a 1 in 260,000 chance of dying tomorrow whereas a 30 year old woman has about a 1 in 583,000 chance. A 55 year old man has a 1 in 46,000 chance of dying on any given day and a 55 year old woman a 1 in 79,000 chance. Note that while it’s extremely difficult to estimate a person’s life span (since future technological and societal changes may radically alter how long people live), estimating how likely a person is to die in the next day is much more accurate and straightforward.

Once you’ve used the tool to calculate your own chance of dying tomorrow, you can start thinking about the risk of dangerous activities relative to how much risk you already take each day (merely by going about normal activities). In particular, you can calculate how many total days worth of risk an activity involves. So for instance, if you are a 30 year old male, and ride 100 miles on a motorcycle tomorrow, then you’ll experienced 11.2 days worth of risk of dying tomorrow, rather than a single normal day of risk.

To do the calculation of how many days of risk you’re taking in a day where you do the dangerous activity, simply calculate the following: Start with the probability that you die in a normal day, add to it the probability that you die from doing the risky activity, and then divide the result by the probability that you die in a normal day.

So for instance, if you were to go BASE jumping tomorrow (an activity that appears to have about a 1 in 2,300 chance of death), and if you normally have a 1 in 100,000 chance of dying in a given day (for instance, you’re a 46 year old man) then you’d be taking on ((1/2300)+(1/100000))/(1/100,000) = 44.5 days worth of ordinary daily risk tomorrow, instead of just 1 day of risk.

BASE_Jumping_from_Sapphire_Tower_in_Istanbul

Would that be worth it? For some people, it might be possible it is worth BASE jumping once in their in life. But suppose you were to go BASE jumping 20 times over the next year, on 20 different days. Then rather than consuming 365 days of typical risk that year (as a 46 year old man), you’d be taking on about 1235 days worth of risk, an additional roughly 2.4 years of risk! It’s hard to imagine that being worth it, even if BASE jumping is incredibly enjoyable. Of course, there is also a high risk of injury, aside from the risk of death.

Below is a table with estimates of the chance of dying from doing various activities.

Taking a 340 mile road trip on occasion with friends seems very reasonable. For instance, a 30 year old male will only be doubling his risk of dying that day, and a 30 year old female will be taking on about 3.3 days of her usual daily risk. But taking a job as a taxi driver in a suburban area or a long distance courier, driving 340 miles most days, would be much more risky. A 30 year old male who took such a job would be doubling his risk of dying every day. Another way to think about it is that despite being a 30 year old male, he would living with the daily risk of a 43 year old male. Similarly, a 30 year old male who decided to go BASE jumping one day, would be living that day with the daily risk of death of an 88 year old man.

So what risks are worth taking? It’s ultimately a subjective question. But thinking in terms of how much you’re increasing your ordinary daily risk, and converting risks into the daily risk of people of different ages, can make these abstract numbers more intuitive. And stronger intuition can help us reason more sanely about our choices.

Disclaimer: these numbers come from the internet, so if you want to be confident about any of them, you should double check them using a reliable source. Note also that actual death rates will depend on a variety of factors, including the amount of experience you have doing that activity and the location where you are doing it. Furthermore, note that for many of these activities there are risks of injury, in addition to risk of death, but I’ve only considered risk of death in this analysis. Be very cautious before deciding to engage in any dangerous activity!
Activity
1 in __ chance of dying
per
Days of risk (30 yr male)
Days of risk (30 yr female)
 
BASE Jumping
2,300
jump
113.6
252.6
source
Driving 100 miles on a motorcycle
26,000
100 miles driven
11.2
23.7
source
Participating in a triathlon
67,000
run
4.9
9.7
source
Skydiving
101,000
jump
3.6
6.8
source
Hang-gliding
116,000
flight
3.2
6.0
source
Running a marathon (cardiac arrest)
127,000
run
3.1
5.6
source
Scuba Diving
200,000
dive
2.3
3.9
source
Rock Climbing
320,000
climb
1.8
2.8
source
Bungee Jumping
500,000
jump
1.5
2.2
source
Canoeing
750,000
outing
1.3
1.8
source
Driving 100 miles in a car
877,000
100 miles driven
1.3
1.7
source
Skiing
1,557,000
visit
1.2
1.4
source
Snow Boarding
2,198,000
visit
1.1
1.3
source
Flying 1,000 miles in a commercial airplane in the U.S.
3,333,000
1,000 miles flown
1.1
1.2
source
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Do Your Methods Reliably Lead You to the Truth?

Would you be satisfied believing merely what it’s trendy to believe? If so, you can adopt the beliefs of the people of your country, city, and friend group.

But if you want to reliably have truer beliefs, you’re going to have to use different methods than most people use to figure out what’s true. Selecting which “epistemic methods” to rely on may be one of the most important decisions you make. Your epistemic methods may determine the career you choose, the political party you vote for, the God or Gods you worship, whose health advice you trust, and whether the money you give away helps people or accomplishes nothing.

Consider how bad it can be to get your epistemic methods wrong:

Joey always wanted to be an actor, though he only occasionally got cast in the best parts in his high school plays. He had heard about how hard it was to make it in that career, but believed deep down that he could be great if he worked at it. He trusted his parents when they told him he had lots of potential. And, anyway, he’d always been told you should pursue your passion. So he decided to study acting in college. Unfortunately, his deep-seated belief about his acting turned out to be inaccurate. His parents were merely trying to be good parents by being encouraging. Ten years after college he was still struggling to find acting work, and mainly supported himself with boring temp jobs.

Life had not gone the way he had planned, because his methods for deciding what to believe were not reliable. Unfortunately, stories like his happen all the time.

But this scenario could have gone differently if his epistemic methods were different:

Joey really wanted to be an actor, but wasn’t reliably cast in the best parts in his high school plays. He felt like he could be a great actor if he worked at it, but had heard about how hard a career it can be. So he decided to think carefully about whether it was smart to pursue. He knew that many would-be actors were better than those at his high school, and so took it as a bad sign that he frequently wasn’t cast in the best parts at his school. His parents were encouraging about his skills, but they were encouraging in general, so he knew he this wasn’t strong evidence of his potential. He’d always heard you should pursue your passion, but he figured that advice didn’t make a lot of sense if you couldn’t find a job doing your passion. So he decided to ask his acting teacher what she thought his realistic expectations should be if he pursued a life of acting. She told him that finding work would most likely be a struggle and that most people at his level of skill who attempt to become actors end up quitting. So Joey decided to focus on economics in college instead. It was a subject he liked, though not as much as acting. But he believed it would be much more likely to lead to a career he would enjoy. And he was right. He decided to continue acting, but only as a hobby.

The study of epistemic methods should not be something obscure, relegated to professors in narrow subspecialties. We all make a choice about what methods we rely on to lead us to the truth. Though many of us do it without realizing we’ve made a choice. And we pay the price in the currency of false beliefs if the methods we choose are unreliable. A bad choice early on may mean a poor understanding of the world for the rest of our life.

To reliably come to true conclusions, we need methods that reliably produce truth. To find such methods, we can look to what has been empirically found to produce accurate beliefs, as well as to those methods that are supported by sound theory.

Here are some examples of good and bad epistemic methods:

  • Choosing to run our beliefs by the smartest people we know (who we think might disagree with us) is much more reliable than only sharing our opinions with those who already agree.
  • Questioning what people say when they have a vested interest in saying it is better than trusting what people say even though they have a vested interest in saying it.
  • Reading sources of information that come from a variety of view points is better than reading only information produced by people of one ideology.
  • Downgrading your beliefs at least a bit when you encounter evidence against what you believe is better than trying to come up with a reason to dismiss that evidence.
  • Doing research to understand the strongest arguments contradicting what you believe is better than dismissing the other side without learning a lot about it.
  • Trusting experts about a particular point when there is a strong consensus among them is better than trusting experts when they disagree with each other.
  • Reading studies written by scientists is better than reading the articles written by journalists about those studies.
  • Believing the results of studies that have been replicated by independent researchers is better than believing studies that have just been done for the first time.
  • Reading meta-analyses of studies is better than reading individual studies.
  • Reading randomized controlled trials is better than reading other types of studies for answering questions about whether something causes something else.
  • Treating it as mere evidence of truth when you feel like something is true is better than assuming that your beliefs are true simply because you feel they are.

If you don’t get your epistemic methods right, your actions may not align with your goals, even though you believe they do. You may end up choosing a career you’re not skilled at, donating to an ineffective charitable cause, voting for a politician that harms society, or simply having lots of false beliefs about yourself and the world.

It’s worth the effort to get your epistemic methods right. Otherwise, the methods you happen to use may not reliably lead you to the truth.

 

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Why We Overvalue What We No Longer Have: The Psychology of Loss

We over value the things we have, overact when we can’t have something anymore, and resist change. In other words, we hate loss. But because loss is frequent and inevitable, our hatred of loss guarantees that we suffer.

Let’s take a look at the psychological mechanisms that make us act this way.

The Endowment Effect

Suppose that Nathan and Mae are two students at the same school. It is randomly determined that Mae will be given a school mug, which she gets to keep. Mae then writes down the least she would have to be paid to be willing to sell the mug. Nathan, likewise, writes down the most he’d be willing to pay to buy the mug. What do you predict will happen?

You’d think, if the human brain were rational, that the mere act of having just received a mug would not immediately make us value the mug much more highly. Yet, when this experiment is conducted, the student given the mug (Mae) needs to be paid a great deal more to part with it, on average, than the student not given the mug (Nathan) would be willing to spend to buy one.

This Endowment Effect, as its called, means that we tend to value things more highly just by virtue of owning them.

You know that tiny dog statue you acquired somewhere (perhaps you don’t even remember where)? You may not be willing to part with it, even though you would never buy it now if given the opportunity. We hate to lose what we have (after all, its YOURS).

The Familiarity Effect

We tend to like things more as we grow more familiar with them. This applies to foods (many of which we enjoy more the more we eat them), rooms (we start to become more comfortable with spaces that we are used to) and people (overtime we stop classifying people as “strangers” even if our interactions have always been superficial). It even applies to objects (my office chair is comfortably familiar to me). Perhaps this psychological tendency is rooted in the evolutionary need to be safe: things we are familiar with are less likely to contain hidden danger. If you’ve been around that guy many times, and he’s never tried to kill you, he’s probably not going to try today.

This Familiarity Effect, where we prefer that which is familiar to us, makes loss more difficult. We may have a hard time giving up people in our lives, even when we don’t like them much or they don’t treat us well. So we continue spending time with friends we don’t like rather than seeking out unknown strangers (who would of course eventually become friends). And if we lose what we’re already familiar with, we have to go through the unpleasant process of getting acquainted with unfamiliar things (how uncomfortable!).

Association

When two things are paired repeatedly, the emotional reaction we have to one starts to bleed into the emotional reaction for the other. This occurs through a process known as Classical Conditioning.

It means, however, that we begin to value the irrelevant traits of things that are valuable, even when those traits have nothing to do with the value itself. For instance, we have very positive feelings towards our romantic partner who has certain personality quirks (or physical traits), so we develop very positive feelings towards those quirks, coming to believe we would have a hard time being with someone who doesn’t have them. Or it could mean that we start to prefer products made by a particular brand, because we have a positive association with the brand itself. In fact, many brands bombard us with ads attempting to get us to link positive things (e.g. attractiveness, wealth, a desirable lifestyle, calming scenes of nature) with their logo. They apply Classical Conditioning to us like Pavlov applied it to his dogs. Just look at beer ads.

This means that we’ll overvalue what we have, in part, because we associate value with irrelevant features that don’t produce value themselves. We are loath to throw away our shirt with the trendy brand, because that logo evokes value. Who cares that the shirt looks bad on us. And don’t forget how sad it is that you’ll never again find a romantic partner with quirky traits X, Y and Z, that you now find so adorable and endearing after your last partner had them.

Expectations

If you were to win $100 at a casino, and then five minutes later make a terrible bet and lose that money, chances are you wouldn’t feel nearly as bad as if one day you were to have $100 stolen out of your pocket. Why? Because, in the first case you didn’t have the time to adjust to the world where you had an extra $100. So your brain is likely to experience the first scenario as roughly breaking even (though likely with some, though not too much, regret). You got a lucky break, and then got unlucky which took you back to where you started. So on net you neither gained or lost. On the other hand, in the second scenario, it feels like a pure loss (you’re $100 in the hole compared to what you’re used to).

To put it another way: Taking $100 out of your bank account and putting it in your pocket doesn’t make your brain feel like you’ve gained $100, since you’ve already gotten used to a world where that money is yours. Whereas winning $100 randomly at a casino feels like a bonus, that’s on top of what we already have, so losing that money (before you’ve gotten used to having it) pretty much brings you back to where you started (psychologically speaking).

This is about expectations. If you expect to lose $100 you might feel good about only losing $50, whereas if you expect to gain $100 you might feel bad about only gaining $50. Our emotional reactions to change are filtered through our expectations. This idea of a set point, against which gains and losses are measured, is elegantly encoded in Prospect Theory, which is a powerful description of how humans think about risk and uncertainty.

The thing is, we have all sorts of expectations that we’ve already accepted about the future, most of which assume things will be as good, or better than the current state. We may assume, for instance, that next year we’ll have the option to stay in the job we have now. That means that if we get fired, we may perceive it as a huge loss, even if we really don’t like our job and have a good chance of finding one we like better. Losing the job still violates our expectations about what we have available. If, on the other hand, we had assumed that we very likely would be fired (for instance, due to an announcement that there would be major cutbacks), the blow of losing the job would be easier to come to terms with.

The expectations we have about our future help cement our emotional reaction to loss. If opportunities disappear that we assumed we would have (like staying in the apartment we’re currently in, staying with the partner we currently have, or staying in the city where we currently live) we perceive it as a big loss because it violates what we already took for granted, even if it turns out that some of these things don’t give us much value.

Conclusion

We overvalue what we already own. We become comfortable with what we’re used to having, and have discomfort around unfamiliar things. We start to value the merely incidental features of the things we like. Our expectations about the future tend to make the assumption that our current opportunities will continue, or perhaps even improve.

These psychological mechanisms set us up to feel that loss is much worse than it really is. We are scared to lose what we have, overact to losses when they do occur, and dwell on losses that have occurred in the past. Yet, in most cases, we recover from loss faster than we would predict. Months later, our day-to-day existence is usually less altered by the loss than we would assume. In the short-term, we overact more to loss than we acknowledge. In the long-term, we’re less harmed by loss than we predict.

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How Can We Explain Tiny Startups Crushing Huge Tech Companies?

Suppose that mega-corp, a large corporation, has hundreds of employees, hundreds of thousands of customers, tens of millions of dollars of cash, a recognized brand, and an experienced CEO. Tiny-upstart, on the other hand, is just two twenty-five year olds with an idea, no funding, no users and no business experience. If mega-corp and tiny-upstart are in the same line of business, then by any reasonable stretch of the imagination tiny-upstart will lose the fight.

So how is it that tiny startups seem to keep crushing huge companies? Consider the top 5 most trafficked websites in the U.S. today. Google began its life as “backrub”, a research project created by two PhD students. Facebook was launched in a dorm room. YouTube supposedly started when some paypal employees had trouble finding a famous video clip of the incident where Janet Jackson’s breast was exposed during the Super Bowl. Then there was Yahoo!, which began as a site where two guys categorized their favorite links, “Jerry and Dave’s Guide to the World Wide Web”. Finally, there’s Amazon, which was created by a 30-year-old hedge fund employee. He drew up a list of 20 possible things to sell on the internet, and decided that books was the best option.

Not only did these companies go from nothing to enormous, but they did so under intense competition. Whatever needs a company fulfills (even if they fulfill them in a new way), there is almost always some way that people were already trying to fulfill those needs. Google blew its way past hugely popular search engines, Facebook beat the life out of Friendster and MySpace, the first video sharing website pre-dated YouTube by EIGHT YEARS, hundreds if not thousands of link directories preceded Yahoo!, and Amazon dominated the long successful Barnes & Noble, which had been trying to sell books online since the late 80′s.

If this blog post were a popular non-fiction book the next paragraph might be about how, with few resources, you can compete with the largest companies in the world (it just requires vision, hard work, and believing in yourself, the book might say). After all, that’s what the founders of all these now famous companies did. But the humble origins of the largest internet companies prove nothing about the ease with which one can go from something small to something great, or that startups are nimbler than large companies, or better at innovating, or have less screwed up incentives. And here’s why.

Companies pretty much come from two places:

  1. A few people, who at the face of it don’t have a chance in hell of competing with the huge players, get together and decide to go for it.
  2. They get spun out of other companies (which themselves were started by small groups of unlikely individuals).

But large companies usually just keep their new products in-house (like Apple with the iPod and iPhone). So they rarely bring new companies into existence. And while you occasionally get an Elon Musk type counter example (3rd time entrepreneur billionaire starts a new startup, seeding it from day one with enormous resources), or a company that exists solely for the purpose of churning out startups, people and groups like that represent only a tiny fraction of all would be entrepreneurs. So that means that nearly all startups come from a few people with dismal looking prospects.

Therefore, of course when we look around at the largest companies, they were once founded by just a few people in a garage. And of course they beat out the competition, because otherwise we never would have heard of them.

Tiny startups are to huge internet companies what tadpoles are to frogs. Most tadpoles die before they grow, but every frog started as a tadpole.

 

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