Brain as Belief Engine: Patternicity and Synchronicity

I recently got a chance to hear Cass Sunstein’s presentation on “Believing False Rumors” at a conference on privacy, free speech, and the Internet. Sunstein discussed the many dynamics leading to errant “informational cascades,” including self-defeating attempts at correction (which paradoxically tend to entrench the original mis-impression). This article by Michael Shermer discusses some biological bases for the problem:

In a September paper in the Proceedings of the Royal Society B, “The Evolution of Superstitious and Superstition-like Behaviour,” Harvard University biologist Kevin R. Foster and University of Helsinki biologist Hanna Kokko test my theory through evolutionary modeling and demonstrate that whenever the cost of believing a false pattern is real is less than the cost of not believing a real pattern, natural selection will favor patternicity. They begin with the formula pb > c, where a belief may be held when the cost (c) of doing so is less than the probability (p) of the benefit (b). For example, believing that the rustle in the grass is a dangerous predator when it is only the wind does not cost much, but believing that a dangerous predator is the wind may cost an animal its life.

Shermer calls our propensity to find “meaningful patterns in meaningless noise” patternicity. The same phenomenon could be observed on Wall Street. As Michael Lewis reports, when “asked what would happen to default rates if real estate prices fell[, t]he man at S.& P. couldn’t say; its model for home prices had no ability to accept a negative number. ‘They were just assuming home prices would keep going up.'” “Fixated on Friedman,” they were willfullly blind–though perhaps my moral judgment on results here is influencing my view as to their intent.

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