Upside Down: Thinking Through The Numbers

You suck at maths as I pointed out here

Calm down I am not saying you can’t add. I am saying there are maths tricks that people use that you don’t see happening.

For instance, to win a prize, you will be blindfolded and you have to pick the blue marble out of a bowl.

The first bowl has 10 marbles, but only one 1 is a blue marble.

The second bowl has 100 marbles in it, and it has 8 blue marbles.

Which bowl do you choose from, bowl 1 or bowl 2?

Decisions, Decisions

Daniel Kahneman, the Nobel prize-winning economist, in his book Thinking, Fast and Slow: talks about this situation –

About 30-40% of students (the survey participants) choose the urn with the larger number of winning marbles, rather than the urn that provides a better chance of winning…Vivid imagery contributes to denominator neglect…When I think of the small urn, I see a single red marble…When I think of the larger urn, I see eight winning marbles.

The effect is called Denominator Neglect. It is about our inability to understand data when it is presented in certain ways.

We love a good story and we don’t like doing math.

In the above scenario, if you picked the first bowl had a 10% chance of getting a blue marble but if you picked bowl 2 you had an 8% chance. People look at the top number the 1 and the 8 and see that the 8 is bigger and so it feels like it would be easier to pick a blue marble from that bowl.

Being the Prettiest Girl at the Ball

Presentation matters.

Abstract figures are harder to understand than hard numbers. Where are you going to?

Of people who travel to Country X, 5% of them get seriously injured.

or

50 tourists out of 1000 are seriously injured when travelling to Country Y.

Which country sounds like the better choice?

Usually, reading 50 people being injured conjures up images of those injuries and it makes Country Y less appealing when in reality they both had the same chance of injury.

Maths Is Hard

When dealing with your team and making decisions, make sure you check the math on projects. This could be if you get survey information, sample error rates, financial projections, and risk estimates.

Make sure you frame them in multiple ways to make sure you aren’t getting tricked by the Denominator Neglect effect.

Or if you are very sneaky, you can use this to your advantage when you are pitching ideas.

Use hard figures when you want something to be more impactful and when you want to downplay something turn them abstract.

Now, only use this power for good.