One of the benefits of working during the August lull is that one gets to stretch the brain with ideas that are typically outside the realm of the day-to-day. One example I came across this week is a fascinating article on the psychology of security written by Bruce Schneier. The article was discussed on an IT security mailing list, however Schneier writes essentially about the psychology of risk. A large part of the job of a Product Manager deals with evaluating risk, from analyzing competitors' behavior, to SWOT analysis of market trends, estimating the impact of product defects as well as the potential for project slippage.
While we all think we are so reasonable, all the experimental evidence points to the contrary. Human decision making is extremely complex and may be influenced by many irrational factors. Ed: Not mine, however, obviously!
Dealing with risks is always about making the right trade-off. Schneier states that the following five aspects are vulnerable to poor decision making:
- The severity of the risk.
- The probability of the risk.
- The magnitude of the costs.
- How effective the countermeasure is at mitigating the risk.
- The trade-off itself.
The essay is full of fascinating information, but I pulled out a couple of nuggets for reference.
Considering a particular outcome in one's imagination makes it appear more likely later.
The moral here is that people will be persuaded more by a vivid, personal story than they will by bland statistics and facts, possibly solely due to the fact that they remember vivid arguments better.
An outcome that is difficult to imagine may actually appear to be less likely.
The most extreme example of a class of things tends to come to mind when thinking about the class.
I have seen the availability heuristic at work in myself, and dare I say, my colleagues? After a customer visit, or a discussion with a pre-sales engineer, I tend to prioritize their wishes/bug reports higher than I might otherwise, even if this is the only customer to register this particular product wish. This behavior is also typical when dealing with internal and external users of the product - they tend to prioritize their current issues much higher, even if they saw more severe issues in a project 3 months ago. To counter this tendency Product Managers collect "evidence" for wishes (from customer visits and the votes within the wish database) and try to use this information for rational decision making.
Long-range planning is also particularly sensitive to the availability heuristic. When making a three year strategic plan it is very easy to be unduly biased by the competitive event that happened last week.
- Question 1: Should divorce in this country be easier to obtain, more difficult to obtain, or stay as it is now?
- Question 2: Should divorce in this country be easier to obtain, stay as it is now, or be more difficult to obtain?
In response to the first question, 23% of the subjects chose easier divorce laws, 36% chose more difficult divorce laws, and 41% said that the status quo was fine. In response to the second question, 26% chose easier divorce laws, 46% chose more difficult divorce laws, and 29% chose the status quo. Yes, the order in which the alternatives are listed affects the results.
People are more likely to notice evidence that supports a previously held position than evidence that discredits it. Even worse, people who support position A sometimes mistakenly believe that anti-A evidence actually supports that position.
So perhaps by coming to a deeper understanding of how our brain reacts to risks we can make better decisions? We may also be better equipped to detect when unscrupulous people are attempting to manipulate our perception of risk to influence our decision making. Buddhists call this approach to life Mindfulness.