How we can avoid falling for what's merely a good narrative
The Role of Narrative
In a somewhat well-known study—as far as behavioral economics studies go—the psychologists Danny Kahneman and Amos Tversky asked participants to thoughtfully consider the two fictitious scenarios below:
A massive flood somewhere in America in which more than a thousand people die.
An earthquake in California, causing massive flooding, in which more than a thousand people die.
Kahneman and Tversky then asked them which scenario they believed to be more likely to happen.
Which one was it?
The respondents, overall, estimated the second event to be more likely than the first, even though this is logically impossible. The first would always be more likely because it includes the probability of a flood happening anywhere, not just in California alone.
The second option, though, carried more weight in the respondents’ heads primarily because it told a more salient narrative, one that seemed more plausible and therefore seemed more likely.
It wouldn’t be reckless to say that we’re all suckers for a good story, something that sounds nice; just ask anyone who invested in Theranos. A good story is hard to turn away from. Perhaps that’s why we often fool ourselves by concocting simple stories to explain things that are much more nuanced and complex. One week we should fire Nick Sirianni because we run the ball too much, the next because too little. I digress.
The purpose of today’s note is to explore the outsized role narrative plays in how we interpret and share information, and how this can affect the accuracy of our decisions and judgments.
Narrative is a Human Thing
Let me begin by stating that narrative, of course, isn’t a bad thing. We educate children with fables. Some studies suggest our short-term memory capacity improves by 6-7x when we tie what we must remember to a story. When we pitch an idea, there is almost always a hero’s journey / here’s the problem and this is our rise-to-the-occasion way of solving it-type story involved. When we have free time, all we do is immerse ourselves in stories, by either telling stories of our own at the bar or by watching stories unfold on Netflix or piecing together the classic stories of Dickens or Joyce. As E.O. Wilson put it in his book The Meaning of Human Existence,
“We love the life stories of other people, and cannot be sated with too much such detail. Gossip is the means by which we learn and shape our social network. We devour novels and drama. But we have little or no interest in the life stories of animals—unless they are linked in some way to human stories.” (1)
Narrative is the default lens through which we see and experience the world; in goes trillions of bits of information we absorb, out appears a linear series of events to be easily understood, recalled or shared. This is pretty useful. Can you imagine how chaotic and senseless the world would appear if we could not wield narratives to string everything together? And how little progress we would make in a world in which we could not tell stories to others?
And yet narratives do have their critical downsides. As we saw via the study at the beginning of this note, narrative can skew our perception of reality, of what’s true and what merely sounds nice.
Stories explaining something complex can often be target signs drawn on bullet holes
Narrative Fallacy
It’s no secret that most of the companies Jim Collins lauded as perennial out-performers in Good to Great regressed back to mediocrity (or worse: TTFN Circuit City) after the book was published. But at the time, the narratives Collins told portrayed these companies’ strengths as infallible and readily explained by a few key variables. As Danny Kahneman wrote in Thinking, Fast and Slow:
"Stories of how businesses rise and fall strike a chord with readers by offering what the human mind needs: a simple message of triumph and failure that identifies clear causes and ignores the determinative power of luck and the inevitability of regression. These stories induce and maintain an illusion of understanding, imparting lessons of enduring value to readers who are all too eager to believe them." (2)
In other words, narratives excel at trading-off accuracy and nuance for simplicity and linearity. This makes them easy to fall for!
But we don’t just fall for other people’s narratives; we’re suckers for our own, too.
Take, as another example, the following experiment that Nassim Taleb discusses in The Black Swan:
“[The] psychologists asked women to select from among twelve pairs of nylon stockings the ones they preferred. The researchers then asked the women their reasons for their choices. Texture, “feel,” and color featured among the selected reasons. All the pairs of stockings were, in fact, identical.” (3)
The participants had woven clean, linear narratives, explanations out of thin air, to explain their choices. When we take a few data points and spin our own story of interpretation from them, regardless of the underlying truth, Taleb calls this the narrative fallacy.
And men, of course, are not exempt from the narrative fallacy. Take a recent article I saw from Business Insider:
The narrative here is a tip of the hat to the ole Protestant Work Ethic, a suggestion that if we just get off our faux leather Netflix consumption couch and work even more, we’ll toughen ourselves up, fortify our immune systems, and live longer. But what’s the more likely explanation here? There are a variety of factors that affect longevity, one of the most significant being the strength of our relationships with others, as determined by a running 70+ year Harvard study. Kissinger, at 98, still has dinner with his wife every night. And he’s also a wealthy man, with good access to healthcare, living in a wealthy, Western country. These are a few (of the likely countless) factors that matter, not just whether he decides to clock an extra 3 or 4 hours a day to re-read The Power Broker. It’s hardly good science to point to a single data point and build an entire supporting narrative around it. As Jordan Peterson has written,
"Beware, in more technical terms, of blanket univariate (single variable) causes for diverse, complex problems." (4)
And I’ll add: especially when those univariate causes are tied to a compelling story that make them easier to believe.
Final Thoughts
How do we avoid falling for the narrative fallacy in our own lives?
It would be wrong of me to suggest we eliminate consuming and telling stories all together. Try being skeptical of all narratives you hear or say for just a few hours. You’ll begin to doubt your explanations for why you’re feeling hungry a little earlier in the day than usual. Not feasible!
For the decisions that really do matter, though, I do think it’s beneficial to bring a more skeptical eye to the situation and try to poke a few holes in the story you’re being told (or telling yourself).
From my experience, asking probing questions such as the following can helpful:
I'm being told a story implying the presence of X causes Y. But how often was X present, and a different outcome happened? (e.g. hard work alone caused Michael Jordan to succeed!. But how many 5'8" shooting guards also worked hard and didn't make it? (Answer: All of them.)
What evidence or assumptions are being made to make a story sound nice, but actually compromise its accuracy?
Catching it in others: What incentive does this person have to spin the story a certain way?
Catching it in yourself: What incentive do I have to spin the story a certain way?
We can also listen to some of Nassim Taleb's suggestions:
“The way to avoid the ills of the narrative fallacy is to favor experimentation over storytelling, experience over history, and clinical knowledge over theories.” (3)
Here’s an (very simplified) example of experimentation: instead of rolling out a new nationwide customer services program because it sounds nice, perform a limited launch within a few states first (and see how the control group compares). And the goal of experience and clinical knowledge is to ground ourselves in practicality and avoid what merely sounds nice in a textbook or from the mouth of an overconfident talking head (slash pseudo-spiritual leader). It sounds nice to implement scared straight programs to support juvenile delinquents (as I wrote about here), or pay citizens to turn in dead cobras to eliminate an infestation (also an earlier note), or tariff countries to support domestic industries. But experience disagrees (or at least provides some much-needed nuance). There is usually more to the story.
References (1) The Meaning of Human Existence, E.O. Wilson (2) Thinking Fast and Slow, Danny Kahneman (3) The Black Swan, Nassim Taleb (4) Beyond Order: 12 More Rules for Life, Jordan Peterson