Category: decision-making

Coronavirus: Stories & Stats

One of the first things you learn as a rookie business development professional is that stories and emotions sell. Statistics on the other hand, even when understood—and they often aren’t—don’t. Think of it as one of the ten commandments of sales.

It is why, I am quite certain, very few sales or advertising professionals will be surprised at the current struggles public health officials are facing to achieve certain behaviour changes among the public in response to the coronavirus pandemic.

Look around, it doesn’t seem to matter what country it is, the reactions to the measures taken by governments around the world—ranging from hard “lockdowns” to minor social distancing—run somewhere between mild irritation and full-blown resistance. It is difficult to identify a country where most people, without compulsion, simply accepted the necessity of these measures and complied with little fuss. I believe this response has something to do with the lack of stories and a relatable emotional core to the unfolding narrative. There is nothing we can anchor our fear to.

I think you need a visceral sense that you or a loved one is in danger to change your behaviour, and, more importantly, to keep it changed.

I know it is saying something to suggest that asking people to comply or risk death is not a sufficient motivator, but, honestly, it just isn’t enough. We hear talk of rates—infection rates, mortality rates, recovery rates; and new additions to the language like bending the curve, social distancing, and contact tracing. But where is the tragedy in all that? Where is the danger to me?

Without taking anything away from the great work being done by thousands (maybe millions) of health professionals and public servants, it is very difficult to get the right response without that sense of danger. Most people believed you in February, and then in March, and possibly April. But it’s June now. Where is the nightmare we were warned about? Where are the bodies? Where are the dying? Where are the graphic, unforgettable, epoch-defining images? Where is the human tragedy?

(I realise that there is a circular construct in that last question: The success of the public health response in February, March and April, it can be argued, is the reason we didn’t get the human tragedy in May and June.)

Thinking back to the last truly global pandemic lodged in the popular imagination—the HIV/AIDS pandemic—most people remember the AIDS skeletons of the 80s and 90s (which let us not forget left a trail of horrific stigma on the victims). I doubt that they have any recollection or idea of the details of the challenge. And why should they, that’s not something we should expect Joe Everyman to know. And yet, he carries deep within him a vague sense of dread about the realness of that virus and so takes the necessary precautions. (A dread or awareness which needs to be constantly rekindled to avoid complacency.)

And that’s how it goes. Tell me that the murder rate in your city is 5% and it is meaningless to me. Show me a picture of a murder in all its detail, it becomes my personal problem, it establishes for me the realness of the murder problem in that locale. That’s what stories and emotions do that statistics cannot.

The coronavirus presents a unique challenge in this respect. It kills in a far too benign manner to lend itself to the sort of storytelling that shocks. And yet, it is infectious and lethal enough that the bodies keep piling even as complacency grows. We have to show the numbers and preach the precautions, but we lack the emotional hook to bring and keep people in line. You cannot fight a virus people don’t fear.

Non-Decisions

Yesterday, a friend of mine forwarded me an email which he had first sent in 2010. He was reminding me of an opportunity from back then, which he had suggested to me. In the original mail he noted that it was ‘the easiest time ever to do this, so please get on it.’ I didn’t. Also copied in that mail were four others who he also encouraged to ‘get on it.’ They didn’t. As I now read how the communication evolved, it is clear that, from the very beginning, there was questionable commitment to the enterprise. Ultimately the endeavour petered out in a sort of muted fashion, under the usual groaning about the administrative hassles (documents, money, time, you know, the usual fare) of simply starting. We moved on with our lives, all was forgotten.

Until yesterday.

Without going into details—mainly because I am still a little too upset by the whole business—I can say that the decision to do nothing was quite possibly one of the worst I have ever made. It may even be more accurate to speak of having made a non-decision. An opportunity was forwarded from someone I knew to be credible, who himself was putting something meaningful at risk to take advantage of this opportunity. (That was how strong his conviction was.) And yet, somehow, I ignored it and moved on, zombie-like, to some new ridiculous distraction which was more immediately gratifying and less difficult.

Now, of course, it is easier to see the future when it becomes the past. I have the benefit of knowing now what the past eight years looked like. Back in 2010, it was all uncertainty. And with uncertainty comes the real burden of trying to make important decisions using what is necessarily incomplete information. That uncertainty often leads to a sort of paralysis. We do nothing, and hope that that difficult situation resolves itself. Sometimes it does, we get lucky. But sometimes we don’t need too much luck. Sometimes we have what gamblers call an edge. At such times we really can say something intelligent about the future. We can influence the outcomes, or tilt the odds to ensure that whichever outcome emerges, we generally end up not too bad. Mohnish Pabrai, who wrote one of the smartest investment texts I’ve read, memorably described such situations as: “Heads I win; tails I don’t lose too much.”

Consider this wonderful post by Scott Alexander, where he discusses a heads-I-win-tails-I-don’t- lose-too-much situation involving Bitcoin. He observes that though his readers were some of the earliest people to hear about and understand the promise of cryptocurrencies—it had been first discussed on the site in early 2011, when coins were trading for $0.91—very few of the site’s regular readers made any meaningful money as crypto-investors. His description of one of the lessons he took out of this is instructive:

When I first saw the posts saying that cryptocurrency investments were a good idea, I agreed with them. I even googled “how to get Bitcoin” and got a bunch of technical stuff that seemed like a lot of work. So I didn’t do it.

Back in 2016, my father asked me what this whole “cryptocurrency” thing was, and I told him he should invest in Ethereum. He did, and centupled his money. I never got around to it, and didn’t.

On the broader scale, I saw what looked like widespread consensus on a lot of the relevant Less Wrong posts that investing in cryptocurrency was a good idea. The problem wasn’t that we failed at the epistemic task of identifying it as an opportunity. The problem was that not too many people converted that into action.

That last line is critical. Like the case with my friend, they recognised the opportunity, they understood it, and they were being instructed by credible people who themselves had something at risk. Beyond that, the potential upside of their investment was so vast that the downside (Min return = -100%) seemed irrelevant. Anyone who had invested $10 in Bitcoins when they first read about it on the site, even after the huge swings in price over the past few months, would be, you know, 50-cent, basically.

And yet, again like me, “not too many people converted that into action.” Fewer than 3% of the site’s readers (including the author) made decent money in cryptocurrencies (as at the end of January 2018).

And this is perhaps not surprising. Most of the time the future is a haze. We cannot do much but our best every day and hope that things don’t get too rough. But on those few occasions when you know something about the future that most people don’t, when you can pick the joker in the pack, when you can get an extremely valuable low-cost option, or when you can setup a heads-I-win-tails-I-don’t-lose-too-much situation, for God’s sake, don’t make a non-decision, jump in with both feet.

I note the irony of referencing this particular investing legend after a discussion on crypto speculation, but I think this quote from Charlie Munger closes things off quite nicely:

The wise ones bet heavily when the world offers them that opportunity. They bet big when they have the odds. And the rest of the time, they don’t.

True in investing. True in life.