Regression To The Mean [Draft][Request for Feedback]
"Rewarding good performance leads to faster improvement than punishing bad performance"
"In general, unusually bad performance improves after punishment, but good performance tends not to improve and sometimes even gets worse after praise is administered."
These statements seem contradictory, yet both describe real effects. The apparent contradiction is caused by a phenomenon known as "regression to the mean," which states that the measurement after an exceptional measurement will be closer to average. The improvement after a reprimand is caused not by any effect that reprimand had, nor was the worsening after praise due to the praise. Both observations were due to regression to the mean.
Regression to the mean is caused by two things.
1. Exceptionally good performance is far above average, and exceptionally bad performance is far below average.
2. Most performance is about average.
Let's put this in concrete terms. Let's say we are trying to teach our friend Bob to play darts. He's not very good yet, and while he almost always hits the board, he can't really get a higher level of accuracy than that.
On his 12th throw, Bob misses the dartboard entirely. This is extraordinarily bad, even for him. On his next throw, he gets an 8, which is fairly typical, and much better.
On his 57th throw, your friend manages to get a bullseye. You slap him on the back, congratulating him on his improvement. It seems your friend really is getting the hang of this after all. Proud of his accomplishment, Bob lines up his next attempt. He cocks his arm, throws, and...
Gets a 12.
This is regression to the mean. Since there is a large random factor in darts, especially for unskilled players, a good throw will probably not be followed up with another good throw (since good throws are rare, and one shot is independent of another). This effect shows up whenever there is a large random component in performance.
It's important to be aware of when an exceptional observation was likely due to random variation in measurement, not an exceptional characteristic of the thing being measured. For example, stock performance is mostly random. If one of your stocks does extremely well this year, you should expect it to perform much closer to average next year. If your kid scores 160 on his/her first IQ test, you should expect lower performance on later tests. If it took you 3 hours to get to work yesterday because of traffic instead of the usual 1, you shouldn't worry too much about it taking 3 hours again today.
This is a very rough draft of a post on regression to the mean. I wrote it because the sequences didn't cover this particular bias blind spot, and it's an important one. I appreciate any feedback, both in terms of providing examples and making it easy to understand and in terms of cleaning up any errors or awkward phrasings.
The Dark Arts: A Beginner's Guide
The Dark Arts
So you've been reading this site and learning many valuable tools for becoming more rational. You're beginning to become irritated at the irrational behavior of the average person. You've noticed that many people refuse to accept even highly compelling arguments, even as they drink up the doctrine of their favorite religion/political party. What are you doing wrong?
As it turns out, it's less about what you're doing wrong than about what these highly influential groups are doing right. This is a brief intro to the Dark Arts, ranging from relatively harmless or even helpful techniques to truly dangerous ones. In this set of guidelines, I have used the example of Solar Suzy, a contractor for a company that sells solar panels, and Business Owner Bob, who runs an organic food store. You will quickly notice that Solar Suzy is not very ethical. This is not an accident: these techniques can very easily be used unethically. They're called the Dark Arts for a reason, and this example will make sure that's kept in mind.
The fact that a technique can be used to do bad things, however, doesn't mean we shouldn't learn the technique. These methods can be used when you don't have time to wait for someone to slowly change their mind, fighting every step of the way. Even if you plan to never use them, it is probably a good idea to be aware of what they look like.
The Rules
Be simple.
- Use simple words. We're lazy. We don't like having to put in effort to understand something.
- Be brief. Try to say your idea in 30 words or less.
Compare:
Bob: "I've run the numbers. It would take over 30 years for the solar panels to pay for themselves."
Suzy: "Despite the inherent economic disadvantage in the utilization of photovoltaic cells in preference to petroleum and coal, it may under particular circumstances benefit corporate entities insofar as the collective ethical standard of society values such a demonstration of conservationism."
Bob [baffled and a little annoyed]: ... Uhhhhh... Sure... I think I'm fine with what I have. Bye.
-----
Bob: "I've run the numbers. It would take over 30 years for the solar panels to pay for themselves."
Suzy: "Solar panels don't look cost-effective compared to fossil fuels, but sometimes the extra business a company gets for being 'green' makes them worthwhile."
Bob [interested, but skeptical]: Hmm. I hadn't thought of that. Is it really significant, though?
Use positive language.
- When possible, use agreeable words. Imagine that you have to pay for each instance of 'no' type words.
- If you can get your partner to agree to a chain of statements, they will be more likely to agree to the next one.
Now the conversation looks more like this:
Suzy: You are interested in solar panels, right?
Bob [wary]: That's correct.
Suzy [seriously]: Of course, we'll want to make sure it's actually worth it for your business.
Bob [more firmly]: Absolutely.
Suzy [after a slight, thoughtful pause*]: Would you say that your average customer is concerned about the environment?
Bob: Yes, I think so.
Suzy [as if coming to a realization]: You could probably increase your business by advertising that you're going green.
Bob [thoughtful]: I see your point. That might well work.
Suzy [enthusiastic]: Great! Let's get you signed up.
Bob [wary again]: ...
Make sure your partner thinks you are like them.
- Emphasize common opinions. Mock opinions you both disagree with, being careful to stay away from any ideas they might be sympathetic to. This establishes two things. First, it demonstrates that you have high enough status that you can afford to alienate others (but not them, of course). Second, it establishes a common ground.
- Use the same sensory language as they use. If they talk about seeing patterns, incorporate the words 'look' and 'examine' in your conversation.
Create an external cognitive load on your partner.
- Here we begin to wander into the darker arts. People can only do so much with their mind at one time. Anything you can do to add a cognitive burden will take away from their ability to reject ideas. Taking a walk will impose approximately the right amount of strain. This cognitive burden is the reason you want to keep your ideas simple. Simple ideas can still be absorbed with an external load.
Have your partner come up with the ideas whenever possible
- A thought you come up with on your own (or feel like you came up with on your own) goes through far less filtering than an outside idea. Creating a cognitive burden can reduce this filter, but will not eliminate it entirely.
Incorporating what we know so far, Suzy's sales pitch begins to look more effective.
Suzy: Let's take a look around the area. I'd like to get a feel for the neighborhood.
Bob: Okay.
Suzy [spoken in a lower voice, as if sharing a personal secret]: Besides, formal meetings are always so uncomfortable.
Bob [laughing]: I know. There's a reason I got out of the corporate world.
[small talk]
Suzy [more seriously]: Well, I suppose we should probably get down to business. You were looking into solar panels for your business.
Bob [momentarily off-balance]: ...Yes.
Suzy: Of course, we'll need to make sure it's a good decision for you to install them.
Bob: Of course.
Suzy: Now, looking at your customers, I see a lot of signs of environmentalism.
Bob: Yes. Our customers tend to be the sort who care about our planet.
Suzy [noticing the organic food]: Wow, you really cater to their tastes.
Bob: I do my best. Many of my customers come here because we only buy from organic growers.
Suzy: So the solar panels wouldn't look out of place here.
Bob: Out of place? They would probably attract customers.
Suzy [surprised]: I suppose they would. That alone might well make them worth it.
[contract, hopefully]
"You're the sort of person who..."
This is one of the most potent and dangerous tools in your arsenal. If you say that you admire someone's open-mindedness, they will make an effort not to let you down. Your mind evaluates the truth of a statement by judging how easy it is to come up with examples of truth. If you phrase it vaguely enough and make it a compliment, you can convince anyone that they have just about any trait.
This is dangerous because the idea of what kind of person they are will stick with the target for long after your conversation is over. This is the darkest of the dark arts that I am familiar with. Use it sparingly, or if possible not at all. I have used it once that I remember, and that was in a rather extreme situation.
What would you do with a financial safety net?
In the open thread, moridinamael hypothesized that LWers would be willing to take more risks in order to become rich if they had a financial safety net. This seems like an idea worth exploring further.
What would you do if you had a financial safety net (maybe a year's worth of living expenses) to fall back on if your venture failed?
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