Why Humans Zig When They Should Zag
For decades, psychologists have demonstrated
that if rats or pigeons knew what a stock market is, they might be
better investors than most humans are. That's because rodents and birds
seem to stick within the limits of their abilities to identify
patterns, giving them what amounts to a kind of natural humility in the
face of random events. People, however, are a different story.
In a typical experiment of this kind, researchers flash two lights, one
green and one red, onto a screen. Four out of five times, it's the
green light that flashes; the other 20 percent of the time, the red
light comes on. But the exact sequence is kept random. (One run of 20
flashes might look like this: RGRGGGGGRGGGGRGGGGGG. Another might be:
GGGGRGGGGGGGRRGGGGGR.)
In guessing which light will flash next, the best strategy is simply to
predict green every time, since you stand an 80 percent chance of being
right. And that's what rats or pigeons generally do when the
experiments reward them with a crumb of food for correctly guessing
what color the next flash of light will be.
Humans, however, tend to flunk this kind of experiment. Instead of just
picking green all the time and locking in an 80 percent chance of being
right, people will typically pick green four out of five times, quickly
getting caught up in the game of trying to call when the next red flash
will come up. On average, this misguided confidence leads people to
pick the next flash accurately on only 68 percent of their tries.
Stranger still, humans will persist in this behavior even when the
researchers tell them explicitly—as you cannot do with a rat or
pigeon—that the flashing of the lights is random. And, while rodents
and birds usually learn quite quickly how to maximize their score,
people often perform worse the longer they try to figure it out. The
more time they spend working at it, the more convinced many people
become that they have finally discovered the trick to predicting the
''pattern'' of these purely random flashes.
Unlike other animals, humans believe we're smart enough to forecast the
future even when we have been explicitly told that it is unpredictable.
In a profound evolutionary paradox, it's precisely our higher
intelligence that leads us to score lower on this kind of task than
rats and pigeons do. (Remember that the next time you're tempted to
call somebody a ''birdbrain.'')
http://www.indexuniverse.com/component/content/article/4226.html?issue=134&magazineID=2&Itemid=11
Just Imagine What the Margins are on Replacement Parts
A new military jet carries a gross margin of about 60%.
It's a lot more lucrative than bending plastic!
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