Archive for July, 2012

Group think and false-consensus compounded by the presence of confirmation bias can be a very frustrating in a decision making environment. In a business setting it is common for group think to occur as the fear of feather ruffling and desire to appease others  creates problematic conformity at the cost of independent critical thinking. Groups that then come to an immediate conforming opinion assume that this quick alignment can only be because the decision was simply the natural solution, they then project their ideals onto the wider audience under the assumption that their opinions are shared under the false-consensus phenomenon. Lastly the group seeks out evidence that reinforces their beliefs while selectively ignoring information that contradicts them.

Group think

Group think is the problem that occurs when the desire for harmonious decision making hinders the group’s ability to critically think and assess alternative views.

False-consensus

False-consensus is the problem that arises from people’s tendencies to assume that they are the epitome of normality and that the majority of people share the same beliefs and values as they do.

Confirmation bias

Confirmation bias is the problem that arises where people selectively acknowledges information that reinforces their beliefs and values or selectively ignores information that contradicts their beliefs and values.

Final remarks

For a business to stamp out these traits it needs to come from the top, opposition should not be punished simply as a matter of pride and it needs to be made clear that questioning and contradicting those around you is not only acceptable but expected as part of a 360 sanity check of business decisions. Staff should also be encouraged to widen their horizons and understand the strategic objectives of the organisation, applying critical thinking around how decisions line up with strategic direction.

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Value is an interesting topic but the concept of influence and deception is much more practical to understand. To look at the concept of value and how societal influence and deception affects us, it is important to start with a conceptual basis of how valuation is generated from an individual’s perception.

Perception of Value

The value of the product could be described as the relative alignment of products functionality and the desires of the individual, since each individual has different desires the value of any specific product will be different for each person, even when two individuals value a product exactly the same, it may not be for the same reasons.

Value = F(Maximum Value, Individual Desires, Product Functionality)

The actual form could be very different for product to product but an example could be;

Value = Maximum Value/ (1+ |Individual Desire – Product Functionality|)

The problem of course is that individuals have multiple desires and a product will have multiple functionalities that need to be taken into account at the same time. This can be represented by mapping the individuals desires as a position in N-dimensional space where each dimension represent a different attribute, similarly the product can be mapped onto this N-dimensional space based on its functionality in each attribute.

If the product matches and satisfies all the desires perfectly the value is maximised the problem however is that the individual cannot perfectly know the position of the product and as such most determination of value is a guestimate of the distance between them and the product. Human’s being the clever problem solvers that we are fill these gaps of knowledge by crowd sourcing information from others.

Crowd Sourcing

In crowd sourcing information the problem is that everyone else essentially has the same problem in that they do not have perfect understanding of all things either.  This leads up to the two strategies in estimating the position of the product;

  1. Find people that are exceptionally skilled at pinpointing the position of each attribute and piece together the product co-ordinates
  2. Triangulate the position of the product by using the estimates of the value and knowing the positions of those providing the estimates

Influence

Now that we understand how our perceptions of value is crowd sourced let’s talk about influence. Influence is a measure of trust and authority and influence can be generated in a few ways but in reality this translates to trusting friends on the basis that they may have similar interest and taste, and trusting subject matter experts because they have extraordinary skill in estimating value in certain attributes.

Deception

So now that we have a way to measure influence, deception becomes a problematic issue. If the source that you place your trust in, is simply deceiving you then this will lead you to estimate incorrectly the value of the product. This in itself can bring up a series of other games with regard to motivation and self-interest but let’s stick to the 3 broad and basic forms of deception;

  • Legal and unintentional, otherwise known as over-confidence
  • Legal and intentional, otherwise known as advertising
  • Illegal and intentional, otherwise known as fraud

We do not include illegal and unintentional because from the sources point of view they were not trying to do anything illegal as it was unintentional.

In terms of over-confidence, this is simply when the source believes they have a reasonable estimate of the relative positions but actually doesn’t, this may be because they themselves have been deceived or sometimes it’s just cause they wanted to sound like they knew what they were talking about.

Advertising is something we all get exposed to everyday and its simple to see that advertising’s purpose is to provide information but more importantly alter perception by bringing the product much closer to you by moving your desires and position closer to the product. If your position is moved permanently then advertising is a source of information and if it is only moved temporarily then its a source of deception.

Fraud is when someone has purposely tricked and altered your perception by feeding you false information for self-benefit. Remember these are broad and basic descriptions, and in no way am I suggesting that it’s a crime to tell someone that they do not look fat in those jeans.

Final Remarks

The next time you’re about the buy a product think about why you’re buying it, how the functionality lines up to your desires, how your perceptions have been influenced and whether or not you’re being deceived.

Not quiet how it originally goes but the tagline sums up my philosophy of life, I have always seen the world and everything in it as a series of games, and the one thing I can’t resist is a game. This blog is set up so that I can record my thoughts and observations about the world around me.