Overcoming Bias

More Referee Bias

Analyzing the neutrality of referees during 12 German premier league (1. Bundesliga) soccer seasons, this paper documents evidence that social forces influence agents' decisions. Referees, who are appointed to be impartial, tend to favor the home team by systematically awarding more stoppage time in close matches in which the home team is behind. They also favor the home team in decisions to award goals and penalty kicks. Crowd composition affects the size and the direction of the bias, and the crowd's proximity to the field is related to the quality of refereeing.

That is from Economic Inquiry. 

Don't Do Something

The October Journal of Economic Psychology says goalies do too much:

In soccer penalty kicks, goalkeepers choose their action before they can clearly observe the kick direction. An analysis of 286 penalty kicks in top leagues and championships worldwide shows that given the probability distribution of kick direction, the optimal strategy for goalkeepers is to stay in the goal's center. Goalkeepers, however, almost always jump right or left. ... The claim that jumping is the norm is supported by a second study, a survey conducted with 32 top professional goalkeepers. The seemingly biased decision making is particularly striking since the goalkeepers have huge incentives to make correct decisions, and it is a decision they encounter frequently. Finally, we discuss several implications of the action/omission bias for economics and management. ...

The action/omission bias might affect the decision of investors whether to change their portfolio (action) or not (inaction). It can affect the choice of managers whether to leave their company's strategy or investments unchanged (inaction), or to change them (action). The bias may also have implications for the decision of workers whether to stay in their job (inaction) or look for a better job (action), and one's decision whether to re-locate to another city or not. In the macro-economic level, the action/omission bias may also affect decisions made by governments and central banks whether to change various policy variables (interest rates, tax rates, various types of expenditures, etc.), or leave them unchanged.

Of course if you do nothing you risk being seen as cowardly or ignorant, so it might not pay you to correct this bias.   

Why I'm Betting on the Red Sox

One of the most pervasive beliefs among sports fans is a belief in "streaks".  I cannot tell you the number of times I have heard sports commentators this week tell us that the Rockies have won 21 of their last 22 games.  And this alone is the reason that I'm betting against the Rockies.

The "hot hand bias" was first documented in a fascinating paper by Tom Gilovich, Robert Vallone and Amos Tversky.  That original paper (available here) is a wonderful read, showing that the widespread belief among basketball fans of a strong "hot hand" is simply false.  That is, today's streak doesn't predict tomorrow's behavior.  I love teaching this paper to my MBA students, simply because they don't believe it.  The hot hand fallacy is a wake-up to how pervasive bias can be.  A nice example of how sports can yield very convincing teaching metaphors.

A subsequent literature has developed showing that many (most?) of the sports statistics that ESPN loves to share with us, are simply useless as inputs for forecasting the future.  It seems that our brains are a bit too willing to try to find order, even in a world where chaos reigns.  This leads me to believe that most baseball fans are a bit too optimistic that the Rockies' streak will persist.

Some will protest that subsequent research has found evidence of streakiness in specific sports.  I agree.  But this is beside the point: it is essentially an observation about sports.  What is more relevant here (and no-one has convincingly refuted) is that sports fans tend to believe that streakiness is even stronger. 

Believe it or not, there is now an entire blog devoted to the hot hand and streakiness in sports - read more here.  Or if you are interested in the performance of streaky baseball teams in the post-season, read this analysis at hardballtimes.com.

(OK, there is one more reason I'm betting on the Red Sox: I went to graduate school in Beantown, and learned to love baseball at Fenway.)

Belief as Attire

I have so far distinguished between belief as anticipation-controller, belief in belief, professing and cheering.  Of these, we might call anticipation-controlling beliefs "proper beliefs" and the other forms "improper belief".  A proper belief can be wrong or irrational, e.g., someone who genuinely anticipates that prayer will cure her sick baby, but the other forms are arguably "not belief at all".

Yet another form of improper belief is belief as group-identification - as a way of belonging.  Robin Hanson uses the excellent metaphor of wearing unusual clothing, a group uniform like a priest's vestments or a Jewish skullcap, and so I will call this "belief as attire".

In terms of humanly realistic psychology, the Muslims who flew planes into the World Trade Center undoubtedly saw themselves as heroes defending truth, justice, and the Islamic Way from hideous alien monsters a la the movie Independence Day.  Only a very inexperienced nerd, the sort of nerd who has no idea how non-nerds see the world, would say this out loud in an Alabama bar.  It is not an American thing to say.  The American thing to say is that the terrorists "hate our freedom" and that flying a plane into a building is a "cowardly act".  You cannot say the phrases "heroic self-sacrifice" and "suicide bomber" in the same sentence, even for the sake of accurately describing how the Enemy sees the world.   The very concept of the courage and altruism of a suicide bomber is Enemy attire - you can tell, because the Enemy talks about it.  The cowardice and sociopathy of a suicide bomber is American attire.  There are no quote marks you can use to talk about how the Enemy sees the world; it would be like dressing up as a Nazi for Halloween.

Calibration in chess

Daniel Kahneman posted the following on the Judgment and Decision Making site:

Have there been studies of the calibration of expert players in judgments of chess situations -- e.g., probability that white will win?

In terms of the amount and quality experience and feedback, chess players are at least as privileged as weather forecasters and racetrack bettors -- but they don't have the experience of expressing their judgments in probabilities. I [Kahneman] am guessing that the distinction between a game that is "certainly lost" and "probably lost" is one that very good players can make reliably, but I know of no evidence.

Despite knowing much less about decision making and (likely) less about chess than Kahneman, I have three conjectures:

Winning at Rock-Paper-Scissors

Rock, Paper, Scissors is a simple game whose winner should be determined completely by luck. Yet here is a guide to winning at the game. (HT Andrew Sullivan.)

Against a rational player you should randomize and play Rock, Paper and Scissors each with 1/3 probability. If your opponent does this you can never come up with a strategy that will give you an advantage over him. But, as the guide says, “Humans, try as they might, are terrible at trying to be random, in fact often humans in trying to approximate randomness become quite predictable.” For example, according to the guide, an inexperienced player will never play the same thing three times in a row. Taking advantage of this, you can gain an edge over your opponent.

Race Bias of NBA Refs

On Wednesday the New York TImes covered OB contributor Justin Wolfers's paper showing:

White referees called fouls at a greater rate against black players than against white players.  ... [There is] a corresponding bias in which black officials called fouls more frequently against white players, though that tendency was not as strong.

The NBA says its own study refutes this, though they won't release their data to allow independent confirmation. 

Yes, Justin hasn't actually posted here yet, but we continue to hope.  :)

Explain Your Wins

From yet another good article by Shankar Vedantam:

Winners discount information about lucky breaks and chalk up their right calls to superior judgment, whereas losers tend to emphasize the role of bad luck -- rather than bad judgment -- when their predictions go wrong.

Thomas Gilovich ... said this is why a lot of water-cooler conversations among NCAA office-pool participants feature people explaining to others why their predictions went wrong. People don't talk very much about predictions that went right, Gilovich said, because they automatically chalk up those results to brilliant insight. Wrong calls, however, are invariably seen to be caused by fluke events -- which is why they need explaining. ...

When psychologists once asked sports fans to visualize how a particular team might win a game, the volunteers became far more likely to later believe that the team would win -- and to bet money on it. Essentially, psychologist Bryan Gibson of Central Michigan University said, focusing on some part of a conundrum makes it much more difficult for people to keep in mind how much they do not know about all the other variables involved. ...

Gibson has also found that gambling is one domain in which it may be wiser to have a pessimistic personality rather than an optimistic personality. Gamblers tend to be optimists in that they inherently believe good things are likely to happen to them. When a pessimist wins a bet, he is likely to walk away with his winnings because he can't believe that his lucky streak will continue. ... optimists were far more likely to throw good money after bad because they believed that, sooner or later, things would break their way

To do better:  focus more on explaining why you won, than on why you lost. 

Truth is stranger than fiction

Robin asks the following question here:

How does the distribution of truth compare to the distribution of opinion?  That is, consider some spectrum of possible answers, like the point difference in a game, or the sea level rise in the next century. On each such spectrum we could get a distribution of (point-estimate) opinions, and in the end a truth.  So in each such case we could ask for truth's opinion-rank: what fraction of opinions were less than the truth?  For example, if 30% of estimates were below the truth (and 70% above), the opinion-rank of truth was 30%.

If we look at lots of cases in some topic area, we should be able to collect a distribution for truth's opinion-rank, and so answer the interesting question: in this topic area, does the truth tend to be in the middle or the tails of the opinion distribution?  That is, if truth usually has an opinion rank between 40% and 60%, then in a sense the middle conformist people are usually right.  But if the opinion-rank of truth is usually below 10% or above 90%, then in a sense the extremists are usually right.

My response:

1.  As Robin notes, this is ultimately an empirical question which could be answered by collecting a lot of data on forecasts/estimates and true values.

2.  However, there is a simple theoretical argument that suggests that truth will be, generally, more extreme than point estimates, that the opinion-rank (as defined above) will have a distribution that is more concentrated at the extremes as compared to a uniform distribution.

The argument goes as follows:

Against Admirable Activities

Christians often say, "Love the sinner but hate the sin."  I say, "Love the signaler but hate the signal."  We all want to be respected, by ourselves and others, or at least not despised or ignored.  So we fill our lives with activities that could get us more admired, such as pursuing our career, practicing our art or sport, tending our beauty, developing our style, being loyal to our friends and family, caring for the downtrodden, becoming more informed about current events, and so on.

These admirable activities help us to develop and show our admirable qualities.  But since admiration is in part relative, my looking more admirable comes in part at the expense of others looking less admirable.  So there is in part an arms race quality to admirable activities, which suggests we do too much of them from a global point of view.

Unfortunately, our minds were not built from a global point of view.  We are instead built to admire admirable activities, in addition to admiring the people who do them.  We admire drawing, singing, sporting, writing, joking, helping, and so on, and we support policies that encourage these activities.  We like our families, churches, clubs, companies, cities, and nations to subsidize such activities.  Parents push their kids toward more admirable activities, such as music over video games.  And nations subsidize science, sport, and arts that will impress other nations. 

This support urge can make evolutionary sense.   A group that coordinates to help its most noticed members look more admirable may be more admired as a group, to the benefit of all group members.  But at a global level we all suffer from admiring admirable activities, much like trees suffer by working to grow tall enough to see the sun past other trees. 

Yes, the optimal level of admirable activities may usually be above zero, and yes other considerations may suggest we do too little of some activities.  But we are too eager to believe such considerations exist.  For example, many will tell you that we should subsidize art because it promotes peace or innovation.  Overall, we try too hard at admirable activities, relative to just enjoying the less-admirable pleasures of life, and we are biased to neglect this problem.  For humanity's sake, please, take five, and chill.