“An idea or fact is not worth more merely because it is easily available to you.” – Charlie Munger
Whether it’s a worldwide pandemic, or a crash on Wall Street, historical events are often not only foreseeable, but downright predictable. However, when we limit our understanding of events and history to our recent memories, we put ourselves at a disadvantage. A twenty-year view of medicine says we’ve made amazing progress and understand viruses and vaccines in a much clearer way than before. A centuries-long view of medicine, however, told epidemiologists we – the human population on planet earth – were due for just such a widespread and uncontrollable event. This valuing of recent information as more important is an example of the recency bias.
When we hear about an event, and overestimate its importance or its frequency, we’re displaying a recency bias. This bias is an example of an availability heuristic, wherein one tries to anticipate the likelihood of an event based on available information rather than on pertinent information.
Psychologist Daniel Kahnman, in his seminal book on cognition, Thinking Fast and Slow, explains the problem the availability heuristic poses, “The availability heuristic, like other heuristics of judgment, substitutes one question for another: you wish to estimate the size of a category or the frequency of an event, but you report an impression of the ease with which instances come to mind.” We expect certain events to be more common based on how quickly we can think of a precedent. For example, we fret and overestimate the frequency of plane crashes while giving much less thought the mundane, yet much higher, number of deaths resulting from heart disease or diabetes. Easily calling to mind more examples of planes crashing doesn’t make the crash more likely than heart disease or other common maladies. The plane crash examples are more dramatic and stay with us, making them feel more likely, but they aren’t actually very common. The odds of such an event haven’t changed, only our perceptions of them. Instead of relying on objective numbers depicting the frequency of events, we rely on our impressions of their frequency. This can cause us to make further errors in judgment.
The recency bias is especially common in compiling lists of superlatives and sports betting. This is because we tend to remember the most recent events or accomplishments more easily than the overall trend or impact of those events. One might rate a contemporary soccer star as the greatest soccer player of all time, because they can easily recall the star’s accomplishments. While that player’s recent work may be impressive, our voter should consider the overall body of work, which might well mean that an athlete who played decades earlier is more accomplished and deserving. In only considering contemporary and recent accomplishments, the list won’t truly reflect the impact of the sport and players. This results in a list skewed toward the most recent accomplishments and not necessarily the most impressive or significant.
Recency bias also shows up frequently in workplace evaluations. For example, if Tom is coming up for an annual review at work, he might take advantage of this recency bias by completing an important project in the lead up to his evaluation. He might work overtime in those few months to make himself appear more impressive. Then, when management sits down to evaluate him, they have in mind his excellence performance of late and value those recent efforts as more important and more indicative than Tom’s overall time at that company.
Perhaps the most pronounced and potentially dangerous outcome of recency bias is a tendency to prepare for the last disaster. Our overvaluing of recent events can result in mistakenly considering a potential situation more likely in light of those recent events. Most assuredly, the next emergency will not look just like the last one. Consider, for example, the airline security measures implemented in the wake of the 9/11 attacks. Air travel before and after look completely different. After the attacks, screening to get through security became much more involved, with ID checks and body scans of every passenger and their luggage. The modest allotment of liquids in carry-on cases was only implemented after investigations revealed the explosives used in the attacks were smuggled on board in liquid containers allowed at the time. While all of these increased security measures make us feel safer and more prepared, the next disaster isn’t going to be a replay of the previous attack we’re now prepared to thwart. Likewise, the ongoing pandemic is quickly changing how restaurants and hospitality industries do business. Whatever measures we take to reduce viral transmissions should be taken with a long view of potential hazards, not simply aimed specifically at keeping a single kind of attack or pandemic suppressed.
To be clear, I’m not suggesting that taking security precautions or practicing healthy habits are unwise. Rather, my caution is that these measures are examples of actions which can make us believe we’re safer in light of recent events, but don’t actually move the needle on improving overall physical security or biological safety. We should remain focused on reducing as many potential threats as possible, on the larger picture, not focus too closely on eliminating only the threats we’ve become familiar with. An event being recent doesn’t mean it is any more or less likely to happen in the future. The next disaster will come despite, or even perhaps because of, those precautions. Recency bias keeps us rushing from one fire to the next, instead of calmly looking at all the possibilities and creating a general plan to address problems.
The recency bias is also closely connected to the Gambler’s Fallacy, which says that because an outcome occurred more often in the past, it is less likely to happen in the future, despite well established statistical probabilities. The most common example of this fallacy is a coin toss. Because the coin has landed on heads three time in a row, you are “due” for a tails or feel it’s less likely that it will land on heads again. In reality, there is always a 50/50 chance of heads or tails, on every single coin toss. Those past outcomes don’t influence the future results.
The best way to combat recency bias is taking a long view of history. Understand contemporary events often mirror those of the past helps us to put them in perspective, and that while history doesn’t repeat, it usually rhymes. Investigate and learn what caused those past events to better understand current events and put them in their proper context. Just because something happened recently doesn’t mean it is important or out of the ordinary. By understanding recency bias and arming ourselves with knowledge against it, we can make stronger decisions, and interpret events around us in rational and reasonable ways.
