Abi Tyas Tunggal

Mental models and non-consensus ideas about technology businesses.

A Substack newsletter by Abi Tyas Tunggal

Mental models and non-consensus ideas about technology businesses.

What is confirmation bias?

Confirmation bias is the tendency to seek out information that supports preexisting views.

Confirmation bias, myside bias, or observational selection is our tendency to seek out, favour, and recall information that supports our existing beliefs. It stops us from assimilating new opposing information into our worldview as easily as new supporting information. And the effect is stronger for emotionally charged issues and deep-seeded beliefs.

When two people read the same thing and come away feeling like their opposing points of view have been validated, we have confirmation bias to thank.

And as someone who enjoys reading and uses it to get exposure to new ideas and updated mental models, confirmation bias is something I think about a lot.

Without trying to overcome confirmation bias, reading more does nothing but push us further into what we already believe – which is the exact opposite of what most keen readers want.

Failing to interpret new information means new information doesn’t help, it hurts. It leads us to deeper misunderstanding.

Most people don’t know about confirmation bias and without knowing about it, they can’t overcome it.

Now if you hear something you disagree with when you’re reading, in conversation, or watching TV remind yourself of confirmation bias. If you find yourself calling the person stupid, pause and remind yourself that you might be confirming your existing beliefs rather than looking for what is true.

If you see new data and immediately think it supports your worldview, think again.

As Warren Buffett says:

What the human being is best at doing is interpreting all new information so that their prior conclusions remain intact.

When I think about it, it makes sense we have confirmation bias.

For most of shared human history, decisions were made to optimise survival rather than truth seeking.

If someone told you drinking from a waterhole would kill you, there is asymmetric risk if you disregard their advice – you die. If there is another place to drink, then there’s no point taking the risk even if you see animals drinking from there.

Evaluating what is true when you don’t have a clear understanding of a topic is hard. Even if you do, it requires a lot of mental energy. And for most of human existence, it was better to conserve energy for survival than to question things.

If the tribe thought something was true, it paid for you to think so to.

But today, there is asymmetric return for being contrarian and right. If you can find the signal through the noise and find hidden secrets you will be well rewarded, whether that is in health, wealth, or elsewhere.

Accepting what you already know is easy. That’s the consensus.

Fighting for understanding, grasping for reason, that’s hard valuable work.

If you believe capitalism will build the future, read why it won’t.

If you can’t comprehend why Trump was elected, watch Steve Bannon interviews.

If you think religion is dumb, pick up a copy of the Bible or the Quran.

This won’t necessarily help you overcome confirmation bias but it’s still useful to look at the opposing point of view. Just make sure you don’t fall for what happen in my favourite confirmation bias experiment.

Stanford researchers rounded up students who had opposing views on the death penalty.

Half were in favour and half against.

The students read two studies:

  • One provided data supporting the death penalty; and

  • One provided data against the death penalty.

Both studies were made up and the data was designed to be equally compelling.

The students who supported the death penalty found the first study highly credible and the second unconvincing.

The opposite was true for students who didn’t support the death penalty.

The two groups did have something in common.

When asked about their views again, those who started pro-death penalty and those who didn’t were more supportive of their initial position.

As a final thought, let’s think about where confirmation bias fits into our latticework of mental models.

Confirmation bias is a cognitive bias or a systematic pattern of deviation from the norm or rationality in judgement and forms part of selection bias.

It’s a foundational mental model for reasoning and science in general because overcoming it means we can access new explanatory knowledge.

And the best way to access new explanatory knowledge is to prove the previous theory is false. If there is no way to explain that something is false, it is not explanatory knowledge and doesn’t help us move forward.

It’s turtles all the way down, which alludes to the mythological idea of a World Turtle that supports the earth on its back. It suggests this turtle rests on the back of an even larger turtle, which itself is part of a column of increasingly large turtles that continues indefinitely (i.e. "turtles all the way down").

Turtles all the way down is not explanatory. It’s an infinite regression.

Any mental model we pick up should be falsifiable and you should be able to overcome confirmation bias by engaging system two and finding real opposing evidence through experiment and observation.

But as we can see from the Stanford experiment seeing is not necessarily believing.

You can extend this idea to nearly any topic. If you just invested in a new company, then you’ll naturally gravitate towards articles that praise the company. Meanwhile, there is another article that lists reasons why you may have made the wrong decision.

Most people will dismiss it and assume the editors are wrong, were looking for something different, or worse – are just dumb.

Don’t fall into that trap.

While it’s not natural for us to formulate hypothesises and test ways to disprove ideas – it’s a good thing.

We should welcome being wrong. We should seek out information we disagree with and avoiding validating what we already know. Even if that means some temporary discomfort.

To borrow from Howard Marks:

Once in a while, however, the future turns out to be very different from the past. It’s at these times that accurate forecasts would be of great value. It’s also at these times that forecasts are least likely to be correct.

I hope this was worth your attention and gives you something to chew on for the week.

If you know anyone who may be interested, please share and encourage them to subscribe.

Here’s my objective key result update:

  • 25 engaged subscribers out of 43 total subscribers; and

  • One post published on Sunday. ✅

As a reminder my objective key result is:

  • 50 engaged subscribers; and

  • One published post each Sunday by the end of 2018.

See you next Sunday. In the mean time, check out my reading list.

Mental models and non-consensus ideas about technology businesses.