Hasty Generalisation is one of the most common Fallacies practiced by Human Beings. This is ( often ) because 2 of the important “ theorems “ of Statistics are NOT appreciated.
Two of these theorems of Statistics being –
S1 – Larger the sample size better the observation. As the sample size approaches the “ Total Population “ the reality is manifested better.
S2 – The sample types should vary widely. Wider is the variation the random noise is eliminated the most.
It is fallacious to generalize with a very few observations.
Also it is known from study of Psychology that ( often ) people tend to justify their perception and actions ‘ more than required ‘ to avoid being seen as foolish.
People give asymmetrical importance to their opinions and emphasize it too much.
Daniel Kahneman got Nobel Prize in Economics for his work on “ Behavioral Finance “. He had shown that people are NOT “ equi-proportionate “ in their choices, actions and decisions.
There have been interesting developments in “ Game theory “ also giving insights on “ sub-optimal “ choices that people make in their decisions.
An unbiased statistical experiment with sample size larger than the minimum required, and varying widely can throw light on the REALITY.
There are many types of Fallacies, namely –
1 ) Post Hoc
2 ) Poisoning the Well
3 ) Bandwagon
18 types of Logical Fallacies are described at http://kspope.com/fallacies/fallacies.php
42 types of Fallacies are described at http://www.nizkor.org/features/fallacies/
One of the ways of classifying the fallacies is –
1 ) Formal Fallacies
2 ) Informal Fallacies
3 ) Aristotelian Fallacies
3.1 – Material Fallacies
3.2 – Verbal Fallacies
3.3 – Logical Fallacies
A nice list of Fallacies is given at http://en.wikipedia.org/wiki/List_of_fallacies
The following Cognitive Traps we succumb to –
1 ) Availability Bias – This causes us to base our decisions on information that are more readily available than doing an exhaustive search. If someone asks you the question … In English do we have more words starting with R or more words where R is in the 3rd place ? …. The correct way to answer this is …. I do not know, we have to search / analyze and see. But as we tend to remember words by their first alphabet we tend to recall words starting with R but hardly can remember words such as FoRt, MaRt, FeRtilizer etc. ( It seems after an exhaustive search it is found that we have more WoRds where R is in the 3rd place than in 1st place ! )
2 ) Hindsight Bias – ( ex post ) – This causes us to attach higher probability to events after they have happened than we did before they happened. This bias also lasts for only a small amount of time such as few days or weeks. In 1970s at Howrah station ( Calcutta / Kolkata ) a passenger train could not brake in time and dashed at the end of the line ( Platform ) to stop. [ Similar to Chennai / Madras the rail ends one way at Howrah station. The trains do not cross through the station but comes and returns the same way. ] This crash caused the first bogie to get mutilated very badly and a few people died. Now this first bogie generally is very crowded, as people want to rush out and run a smaller distance to reach the office / Business. For next few days the first bogie was almost empty in local trains, and slowly was forgotten. In history of Howrah station this type of accident may have happened only 3 – 4 times. Except the one mentioned above the other crashes were minor in nature. So the “ Hindsight Bias “ explains why people were too cautious for a few days to keep the first bogie empty and then slowly forget.
3 ) The problem of Induction – This causes us to formulate general rules on the basis of insufficient information. ( Hasty Generalization ). CPI / CPM parties have been ruling West Bengal for decades so often many outsiders term all Bengalis as communists. I have even seen the following type of conversation sequence … In a training program the trainer gave me a Red pen and jokingly said you will like this colour ! As I asked why do you think so ? He said : You are a Bengali, so you are a communist. Red is the colour of communists ! So you should like it !
4 ) The fallacy of Conjunction – ( or Disjunction ) – This causes us to overestimate the probability of 10 events each with 90% probability, will ALL occur, while underestimating the probability that at least 1 of the 10 events with just 10% probability is quite likely to occur. In fact human beings in general are not good as estimating probability or estimating the occurrence frequency of an event.
5 ) Confirmation Bias – This inclines us to look for confirming evidence of an initial hypothesis, rather than falsifying evidence that would disprove it. Often when the Media / Press wants to malign someone ( Character Assassination ) then keeps giving biased Negative evidences to paint the character. The readers / TV viewers refer to only this propaganda rather than search opposite evidences of their own.
6 ) Contamination Effects – This causes us to allow irrelevant but proximate information to influence a decision.
7 ) The Affect Heuristic – This causes us preconceived value-judgments interfere with our assessment of costs and benefits.
8 ) Scope Neglect – This prevents us from proportionately adjusting what we should be willing to sacrifice to avoid harms of different orders of magnitude. As the stock market rises, a prudent investor should switch part of equity systematically to Debt funds ( say MIPs ) and at the peak day should exit all equity to put all her investments into Liquid / Debt funds. But in practice how many people does this ? The peak of Equity market is peak because majority are buying more equity than are selling !
9 ) Overconfidence in Calibration – This leads us to underestimate the confidence intervals within which our estimates will be robust. ( to mixup best case scenario with most probable scenario ).
10 ) Bystander Apathy – This inclines us to abdicate individual responsibility when in a crowd. John Darley & Bibb Latane – Bad Samaritan explanation
. Victims chance of being helped within 45 secs was 50% in case of 1 bystander while 0% in case of 5 or more bystander. In the industry, “
Group email “ is great for Information propagation but not for seeking help. Only handful people are active in Discussion groups. Individual emails evoke better response.
Some of the psychological traps that affect way people make business decisions……
– The anchoring trap – Leads to give disproportionate weight to first information or a few first information. Can be avoided by circulating the agenda beforehand.
– The status quo trap – Momentum , culture , heritage problem.
– Sunk-Cost trap – This inclines us to perpetuate the mistakes of the past.
– The confirming evidence trap – This leeds us to seek out information supporting an existing predilection and to discount opposing information
– The framing Trap – This occurs when we misstate a problem, undermining the entire decision – making process.
– The prudence tap – This leads us to be overcautious when we make estimates about uncertain events.
– The recallability trap – This leads us to give undue weight to recent, dramatic events. ______________________________________________________________________________
Peter Senge – The learning organisation and systems thinking.
Jan Katzenback – On Teams
Goreth Morgan – Metaphores
Geert Hofstede – Culture Ricardo
Semler – of Semco Andy Laws Observations
Why do we do things and have they any worthwhile purpose ?
What would you do differently if we started off again from scratch ?
Daniel Goleman popularised Emotional Intelligence.
Moving from Independence to Interdependence is a sign of maturity.
Idea – The Laffer Curve may be used to determine the amount of feedback / Control on employees Vs. consequent level of willingness to work. The number of suggestions an employee is giving per time is one of the direct measurement of motivation.
– Tacit knowledge Capturing Initiative ????
– Fresh air ventilation on the floor ?
– The work force stability Institute http://www.employee.org
– Standardising the exit interview process.
– Research findling by Hay on employee motivation and Retention
– The ideas on competencies at job by Richard Boyatzis
Subhashish Chattopadhyay the Z0oKeePer
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