The convenient narrative

“what kind of stories should we be suspicious of? Again I’m telling you, it’s the stories very often that you like the most, that you find the most rewarding, the most inspiring. The stories that don’t focus on opportunity cost, or the complex unintended consequences of human action. Because that very often does not make for a good story.”

From this Ted Talk by Tyler Cowen.

We use narratives to explain stuff. We need an explanation we can understand and if there isn’t one, we will make one up. And we much prefer to believe stuff that is comfortable for us to believe is true. It goes for all areas of life, not just the ones one like to think about. I’ve picked out a few examples but you’re free to add to the list.

Non-smokers and non-drinkers will generally underestimate how hard it is for people who are drinking or smoking to stop drinking or smoking. The convenient story for the non-smoker or non-drinker is about how people who smoke or drink are weaker people (and therefore less deserving). Or perhaps they are less smart, because they could have just never started in the first place. On the other hand some of the people who smoke or drink a lot like to tell themselves that they are not addicted (because addiction will often imply weakness in the mental model applied to the problem) or that they have just as much willpower as the non-smoker/-drinker has, which would become obvious if the latter also smoke/drank as much as them. Notice that there may be multiple, perhaps conflicting, ways to construct a convenient narrative that makes you look good, not just one; it’s both possible for you as a smoker to convince yourself that you’re not addicted and thus isn’t a weak person (‘only weak people become addicts’), and it’s possible for you to convince yourself that you are addicted, but that the addiction means precisely that you’re not weak ‘because if someone as strong and great as you can become addicted, eveybody can’.

People who are not overweight will generally emphasize the importance of their own actions when explaining why they are not overweight and downplay other factors, whereas people who are overweight will often be more comfortable thinking in terms of factors over which they have little to no influence (like genetics). So the person who is not overweight will end up telling himself a convincing and convenient story about how he’s not overweight because he’s doing all the right things while disregarding other factors that may be quite important too, and by telling the narrative that way he may think of himself as a better person than the people whom he think do not behave the way he does, and/or he may think of himself as a better person than the people who do in fact behave in a similar manner, but have gotten different results from the diet- and exercise regime than he has gotten and thus have ended up overweight. The overweight guy will often tell a completely different story, which is just as compelling and convenient to him as the other story is to the non-overweight guy; he’s overweight because of his genes, because of his metabolism, because of his big bones, or perhaps because of his job that makes it hard for him to find time to exercise. He may think he’s better than the other guy because he works harder (or he would have time to exercise), or he may think he’s better because he does not, he tells himself, judge people by their appearance. The more general story about the blameless victim vs the deserving winner can be applied to all areas of life; if people have done well, it’s always because of stuff they did, and if they haven’t done well, nothing they could have done would have made any difference. That is, this is the story most of them will tell you if you ask them. Because that’s the story they tell themselves, and sometimes have told themselves for many years. (Things get more interesting if people can’t decide if they’ve done well or not.)

Often when people engage in political arguments, they downplay the arguments against the position they are defending. And they like political positions which make them look more deserving, make it look obvious that they should have a larger share of the pie. If reality will not play ball that’s often not a problem in political debates; in politics reality is just what people can agree is true. So when arguing about whether the people I like (‘people (/who) like me’) deserve to be in the position they are in, you can claim ‘it’s because of X’ and as long as a lot of people agree with you then X is considered a valid explanation. Note that the most convenient story always has a bad guy, and that in politics the convenient bad guy is almost always the guy who disagrees with you. Note also that in all the narratives you tell yourself, you’re the good guy. And this is the case for everybody else too.

When people think about what motivations others have for doing the things they do, they will often be tempted to try to explain the behaviour of others in terms of reactions to their own behaviour. They will tend to go for explanations involving them first if they can make one such explanation make them look good. ‘If she’s behaving nicely towards me, it must mean that I’m a nice person’ or ‘she’s behaving that way because I deserve to be well treated’. If it’s hard to come up with such an implicit explanation that makes one look good one will be more likely to find and include ‘external factors’ in the model; if she was angry it was not because of anything I did, rather it was because her boss is a silly old man, or because she’s on her period. This model even works when she explains that her anger is caused by something you did: If she’s told you that her anger was because you didn’t clean the house yesterday, you’re quite likely to at least partially disregard that explanation and find another one that better fits the image of you as the perfect husband; either one that does not involve you at all, or perhaps one that does involve you but also ‘shows’ just how unreasonable she is (‘She is probably still mad about that $300 overcoat I bought without asking her first. I should be allowed to buy an overcoat for myself without asking that crazy lady first, dammit!’). And when people tell themselves such narratives one of the funny things is that they both know that she is right (he should have cleaned the house), but they still hold on to the self-serving explanations in order to justify their own actions though they know that they probably should not do this the partner disapproves of the behaviour. It makes sense though; we’re programmed to constantly look out for subtle ways to do a little less than our ‘fair share’, and you can’t cheat on others as well if you feel really bad about it afterwards and/or if you cannot catch up on the fact that your behaviour might be over the line. Incidentally, chimps have strong views on fairness stuff too.

Now, some of the stories humans made up in the past to explain the stuff we liked to explain back then doesn’t do very well today, when taking all the knowledge that is available to us at this point into account. Stories made up by people who died a long time ago still make up most of the religious texts around today, and you can tell if you read them. But it’s very often inconvenient for religious people to pick a different narrative, it’s in fact often very costly – and once again ‘reality’ is to a great extent just what people around you can agree with you is true. But people without religion do not do without competing convenient narratives; they will probably often tell themselves that they are smarter people for not believing stupid things. Or they will tell themselves that it’s all because of their own actions and ideas that they don’t believe in the stupid narratives, rather than it being to a great extent perhaps just a matter of being born by the right parents in the right century in the right country and being of the right gender (females are generally more likely to be religious than males).

It’s worth mentioning that not all self-serving stories are necessarily untrue or inaccurate. The degree to which such narratives are true or not will often depend upon your own point of view, but this is rather beside the point; the point is that people tell these narratives whether they are true or not, and the accuracy of the narrative often doesn’t much enter the equation in the first place. Sometimes self-serving thoughts like the ones described in the post are not thoughts people actively engage their minds with; often they are not. Rather, they are somehow perhaps best perceived of as part of the OS. The convenient narratives are part of us and there’s no way to get rid of them. But thinking about them every now and then can’t hurt.

Deceit

“For nearly the last twenty years, Young has wined and dined his way through the Bay Area by posing as a variety of musical celebrities and convincing the starstruck to pick up the tab for lavish meals, designer clothing, luxury cars, booze, limousine rides, and stays in elite hotels. According to police and court records stretching back eighteen years, before he engineered last winter’s pass through the Bay Area as Cornelius Grant, Young had also passed himself off as one-time Temptations lead singer Ali “Ollie” Woodson, jazz bassist Marcus Miller, and vocalist James Alexander of funk group the Bar-Kays. Even under his own name, Young has played the celebrity con game claiming — sometimes simultaneously — to be the son of jazz drummer Lester Young, a musical affiliate and close friend of R&B crooner Luther Vandross, an arranger for jazz singer Nancy Wilson, an associate of Miles Davis, and the head of a fictitious production company that always seemed to be on the verge of cutting a deal with someone willing to give Young the star treatment.” [...]

“He generally approaches his marks in a bar, or else drops in on them in the office and gets himself invited for drinks. He’s also often in the company of an attractive, although not flashy, young woman. This woman is usually someone he’d recently picked up by impressing her with his star status. She’d unknowingly act as Young’s foil, vouching for his identity and assuaging the victim’s suspicions. She would often become the victim herself, with Young hitting her up for cash and hotel rooms, promising to reimburse her.

Young would essentially play one victim off another, getting socially prominent businesspeople to trust him simply because others were doing likewise. He’d often target people who worked within the same industry — architects or accountants, for example — and as he moved from one mark to another, he’d amass insider terminology, a list of names to drop, even business cards, which he would allegedly take from one person’s office to pass out at the next. Since part of the classic Alan Young scam often included making hollow bids on million-dollar homes, luxury cars, and boats, he’d also gain credibility because he’d constantly be getting the five-star treatment from salespeople eager to make commission. His best trick, says Hare, was getting all of these people to vie for his attention by creating an “auction atmosphere.” They’d set aside their inhibitions in order to ensure that they got involved in Young’s deal before he left town. And Young’s private plane was always about to spirit him away.

Scams of this type generally work for two reasons: embarrassed victims don’t always report their losses, and police officers don’t always identify such complaints as crimes, because they usually appear to be a simple business deals gone awry, according to Sgt. Peter Lau, an expert on identity fraud for the Oakland Police Department.” [...]

“While Young’s scams certainly have gained finesse over the years, police and court records show they almost always adhere to the same template. Young blows into town posing as the musical celebrity du jour, impresses his marks with name-dropping and insider knowledge, then wows them with promises of hefty investments or donations. Young invariably discovers that his briefcase, along with his wallet, credit cards, and identification, is missing. He usually claims they have been accidentally shipped down to Los Angeles with his band’s equipment. Young then throws himself on the good graces of his host, promising to reimburse him promptly. The host generally pulls out all the stops to offer his newfound friend Hollywood-style hospitality. Some of Young’s marks have paid off hookers, monstrous bar tabs, or bills for unauthorized limousine rides, according to police records. As soon as the victim catches on, Young simply slips away. Within a few days, Young has usually locked onto a new target, and the whole charade repeats itself.” [...]

“SFPD Inspector Wismer was the man who put the case together after realizing that Young’s most recent victims had all been pulled in by a “Temptations” hook. According to Wismer, Young’s latest pass through the Bay Area began last July when, under the guise of Temptation Ali “Ollie” Woodson, he convinced a San Francisco art dealer he planned to invest $160,000 in sculptures. By the time the dealer figured out something was amiss, a week had gone by and he was out $4,000 in hotel bills and clothing. Officers picked up Young on a parole violation the following week, and he went to San Quentin for that offense. But by November he was out again, and he managed to squeeze $1,300 in hotel bills out of an attorney by pretending he had $15 million to invest in real estate.

Wismer believes that Young’s December scam, during which he switched over to the pseudonym Cornelius Grant, actually started in Hayward, where he pledged a $2.5 million donation to the choir at the Glad Tidings Church and convinced a choir member to foot his hotel bill. Then he apparently moved on to Stein. According to an incident report filed with the San Francisco police, within a few days of the Stein swindle Young had convinced a San Francisco accountant to put him up at the Argent Hotel, where he ran up an extraordinary $13,000 bill. He later got an Oakland woman to foot a $1,200 bill at the Holiday Inn on Van Ness. She called the police when he refused to reimburse her as promised. A prostitute police found in Young’s room — along with Young himself — admitted that not only had she agreed to pretend to be Cornelius Grant’s daughter in exchange for a promised Cadillac SUV, but that Young had finagled $80 out of her.” [...]

“If the mechanics of how Young’s con works can be elucidated through his police records, it’s harder to explain why it works. People who have not been subject to Young’s charms often wonder why anyone falls for his extravagant claims. There are probably as many answers as there are victims, but perhaps part of the answer is that he has expertly played on the spend-money-to-make-money business culture, whose members consider buying big lunches and drinks part of the cost of doing business. Or perhaps he owes part of his success, particularly in more recent years, to the gullibility of upper-class whites embarrassed by the idea that they haven’t recognized a African-American musical legend. The East Bay is in fact a touring destination for many of the celebrities Young impersonated — the Temptations, Nancy Wilson, and Marcus Miller have all performed here within the last four months. [...]

Simply put, people want to go along with the crowd, especially one following a charismatic superstar with money to burn. “When people start to get suspicious, some of their suspicions are allayed by his obvious success with astute businessmen, luxury car dealerships, yacht dealerships, real-estate people,” says Tony Hare. “They see him being wined and dined by players at least as big or bigger than they are, with all of the trappings of wealth. That’s tough to argue with. They see that A) they’re not alone and B) they don’t want to embarrass themselves by being the cheap, penurious little fish who’s swimming with the sharks.”

And when logical questions arise, people who want to play enough will invent their own answers. “He gives you enough information to allow you to fill in the gaps,” says Oakland attorney Harvey Stein. “It doesn’t all add up, but enough of it adds up that you’re ready to say, ‘Okay, how did he get on the plane?’ Or you go to Yoshi’s and he gets comped and everybody falls all over him, you say ‘Okay, how do I know they don’t know who he is?’ And of course when he shows up at the restaurant with a beautiful woman who’s a foot taller than he is and gorgeous and fifteen years younger, you think, how does an ugly short guy like this have a beautiful woman like that? So you fill in that kind of stuff.”"

Here’s the link. Here are 4 more stories about imposters – I’ve read The Chameleon and An IM Infatuation Turned to Romance. Then the Truth Came Out. Both are insane stories, but the latter… I believe one commenter expressed it like this: ‘my brain just vomited’ – my reaction was similar.

Some stuff on lotteries

Let’s say you have a population of n (ex ante) identical individuals each making an income of w. Say you now decide to set up a simple voluntary tax-transfer type scheme, where all individuals who choose to participate are required to pay an amount (/tax), t. The contribution/tax t is used to finance a transfer T, which is equal to n*t (the sum of all contributions, i.e. there’s no administration or anything like that to start with). Each individual has a 1/n probability of receiving the transfer T, so that the expected payoff of this scheme is equal to the probability of receiving the transfer times the size of the transfer minus the contribution, or 1/n*(n*t)-t. Which is equal to 0 and independent of both t and n. The expected income of an agent participating in the scheme is w + EP = w.

A risk averse individual will always choose not to participate. A risk neutral is indifferent between participating and not participating given that the reservation utility is 0. Note that even if the expected payoff of the scheme is ‘mathematically’ zero, the way most people think about a scheme like this (..out of context at least, when talking pure math) is that you’re most likely to lose if you participate, especially if n is sufficiently high. If a million people participate and there’s one transfer each month, then the likelihood that you’ll have gotten your money from the contributions back after a year is not very big.

It’s probably even lower than you realize, if you’re not familiar with statistics. To illustrate why this is, let’s get a little more technical. There’s one transfer T each timeperiod. There are n people who participate in the scheme. Now assume that your likelihood of getting a transfer next period does not depend on who got it last period. You can think of it as an assumption stating that an individual can receive several transfers if he or she is very lucky. This assumption is important, but I also think it’s justified in the empirical framework I’m attempting to apply this to – it would be completely justified if the scheme was mandatory, but regarding lotteries we know that a) at least some lottery winners play on after they’ve won anyway and, far more important, b) that the number of participants in real world lotteries is pretty much independent of the behaviour of the winners ex post (1 marginal lottery winner does not translate to one less lottery participant in general) [where 'behaviour' here relates only to the decision as to whether to participate in future lotteries or not]. If you don’t like to think of it as an assumption about past winners playing along after they’ve won, you can think of it as new people entering the scheme after past winners decide to exit, keeping the probability of winning constant over time.

Now perhaps a not uncommon way to misunderstand how this works is for people who don’t know statistics to think/assume that if you have 52 participants and 52 weeks of contributions/transfers, then the probability that you receive a transfer is equal to 1 after one year. It’s not, it’s lower than that, because some lucky guy might win 2 times and get the transfer instead of you. The only case where you can be certain to have won after a year is in the case where nobody can win more than once. In that case, the conditional probability of winning is increasing over time – the chance of winning the first lottery is 1/52, if you don’t win the first lottery you have a 1 in 51 chance of winning the next lottery, ect. I’d like to instead look only at the case where the conditional probability of winning is constant over time.

The probability that an individual i will receive a transfer before period k, where k is equal to 1,2,3…, follows in that case what is called a geometric distribution, which is itself a negative binomial distribution (I know I’ve linked to that one not long ago here on the blog) with r = 1. The cumulative distribution function, which in this specific case can be thought of as a function telling us how likely we are to have gotten a transfer by the time we reach period k, is equal to 1 – (1 – p)^k. To make this a bit easier, think of throws with a die. After one attempt, the likelihood of rolling a 6 is 1 – (1 – 1/6)^1 = 1 – 5/6 = 1/6 (we knew that!). The likelihood of rolling a 6 after exactly two attempts is equal to: 1 – (1 – 1/6)^2 = 1 – (5/6)^2 = 1 – 25/36 = 11/36. Note that this is smaller than 1/3 (or 12/36) for reasons already mentioned; when outcomes are independent, you can’t just add the probabilities to get your estimate. Also note that the probability of getting that damn 6 is of course increasing in the number of attempts. Now what’s the probability that you will not have rolled a 6 after 10 throws? Probably higher than most people think: 1 – [1 - (1 - 1/6)^10] = 0,1615, which is a tiny bit lower than the probability of rolling a 6 in the first attempt. Note that here I take advantage of the fact that there are only two outcomes [roll 6 or don't roll 6] and that the probability of not rolling 6 in a sequence is equal to 1 minus the probability of doing it (mutually exclusive & collective exhaustive and all that..).

Now if we have a lottery with 1 million people participating (p = 1/1.000.000) and one transfer handed out each week, what’s the probability that you’ve not gotten a transfer after 10 years of participation (k=520, 52 weeks in one year…)? Putting in the numbers we get 1 – {1 – (1 – 1/1.000.000)^520} = 0,99948 = 99,948%. The funny thing here is also that the transfer is uncertain but the contributions are not, so if you assume weekly contributions of value $5 over the 10 year period, the certain costs are $5 * 520 weeks = $2.600. So if you play along in this lottery, you pay $2,600 and get nothing with 99,9% certainty. The expected payout from the lottery is of course the same as the amount you pay, as the transfer is $5.000.000 and and the probability of getting the transfer each period is one in a million, so that expected payout is 520/1.000.000*5.000.000= 520*5 = 2600 and the expected total payoff is 0.

Now here’s a twist some of the people who participate in schemes such as these probably don’t fully understand: Assume you try to buy two lottery tickets instead of one to increase your chances of winning. How does that affect the expected payoff? We already know. By assumption it doesn’t, because EP = 0 in our model (see the beginning and above). It also doesn’t matter how many times (weeks) you play, you can’t increase your chances in expected terms by playing for a longer period. Another thing is that in the real world the expected payoff of participating in a lottery is of course always negative – because it takes work and effort to make lotteries work, the contributions need to cover the costs of selling the lottery tickets, tv ads, tax compliance and administration, ect. In the real world, when you buy another lottery ticket, your expected payoff goes down. So to return to our model, if you think it would be mad to participate in a lottery where you pay $2,600 ove a decade and end up with nothing with 99,9% certainty, you should be aware of the fact that these odds are better than the ones offered by real-world lotteries. In the real world, the deal offered is even worse.

People who claim to be in favour of income distribution from rich to poor who also participate in lotteries are kind of funny. They say they want one thing from the political system, then they voluntarily decide to participate in a redistribution mechanism which will always have the exact opposite result. When you have a lottery where the winner takes all or most of the money, you redistribute from everybody to one (/soon to be) very rich guy. I know that lotteries hand out both large transfers and small, but on net most of the small transfers probably cancel out because that’s part of what keep people playing.

[was this post 'too much'? Do people get a post like this or do I 'assume too much'? This is not difficult math, not at all, but if you've never opened a stat-book there are probably a few unfamiliar terms here. I have no idea how much you know, how easy stuff like this is for you guys. I know only people who actually read it to the buttom will consider providing feedback, but.. Would adding more links to the article help or just have you running for the hills/be irrelevant and unnecessary?]

Wikipedia articles of interest

1. Aposematism. You know that thing where poisonous animals have very brightly coloured skin to stop predators from eating them and die in the process?

I’ll have forgotten what it’s called next week, unless I reread this post multiple times. My tendency to forget all kinds of stuff I’ve supposedly learned is part of what separates me from high IQ-folks; my knowledge retention rate is much lower. Though I don’t care enough about it to do something about it, like trying to improve my memory.

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2. Himalayas.

Interesting related fact: The highest of the ‘fatality to summit’-ratios of the eight-thousanders is that of Annapurna. Also: “Annapurna I holds the highest fatality rate among all 14 eight-thousanders. As of 2005, there have been only 103 successful summit attempts, and 56 lives have been lost on the mountain”. Half of all who climb that thing die yet people keep doing it. The best reason the first solo climber of that mountain could come up with when asked the question why? “I did it for my soul.”

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3. Republic of Venice. The ‘history of…’ article has more.

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4. Execution by elephant.. Exactly what it says on the tin. A few quotes:

“Hindu and Muslim rulers executed tax evaders, rebels and enemy soldiers alike “under the feet of elephants”.” Yes, tax evaders.

“Some monarchs also adopted this form of execution for their own entertainment.” (remember how it was before the tv? You have to do something to keep the boredom at bay…) [...] “in the Mughal sultanate of Delhi, elephants were trained to slice prisoners to pieces “with pointed blades fitted to their tusks”.[1]“

“The use of elephants as executioners continued well into the latter half of the 19th century.”

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5. Bergmann’s rule.