I have spent a lifetime in the Sciences, but I must confess I have never seen such inflated egos as Newt Gingrich is flaunting. Now, being an admittedly amateur historian, even I could spot the gross misapprehensions, ridiculous misinterpretations, and outright false historiography of this self-proclaimed “transformational” historian, emerging out of some obscure college in Georgia. I am pretty certain that he would have never been hired as a teaching assistant at the various universities I have been associated with. So how did he rise to being a congressman and majority leader, and in his later transformation, a potential presidential candidate? The easy answer is that in our system, hot air is a prerequisite to soaring, which physicists assure me obeys the laws of physics. But this is too facile. After all, he is not the only gasbag that has ever been created, so there must be some evolutionary advantage, some survival value to having positive illusions about oneself.
The Lake Wobegon phenomenon
Lake Wobegon is a Garrison Keillor-created mythical place in Minnesota, where “all the women are strong, all the men are beautiful, and all the children are above average”.
Actually, not quite so mythical. A study published in 1981 (Acta Psychologica, vol. 47, 143-148, 1981) reports that most people who own a driver’s license rate their driving skills as above average. Another study, published in 1994 (Journal of Personality), found that most men assessed themselves as more attractive than average. And from a survey of 1 million high school students, 70% rated themselves as above-average leaders, and 94% of college professors rated their teaching abilities as above average. So this is the breeding ground that gave us the Newt.
Can they all be right? Of course not, unless we transformationally and historically redefine the meaning of average. Are they all sociopaths? Probably only the extreme outliers among them, whom we call narcissists.
What does Science have to say about that?
Turns out quite a bit. Suppose an alpha male chimp assessed himself as average, would he get into a fight with a potential usurper who coveted his harem? Would he fight even a superior male because of over-confidence or would he be perfectly rational and withdraw from the fight.
How could our captains of finance gamble with financial instruments not understand? Over-confidence is the answer. This is quite instructive; the same trait allowed them to rise to the top, and also doomed them to make fatal mistakes. You would expect that natural selection would eventually weed out people with such destructive behavior. But since we have a lot of them, what is a selective advantage?
Models, models, models
Of course, controlled experiments are close to impossible to conduct in humans. But one can design models to account for observed behavior. One model is that there is a benefit in others overestimating your true abilities. So the assumed advantage of over-confidence is that in the aggregate, it allows for better results due to better decision-making, at the cost of occasional failures. Back to our chimp: If he puffs his chest and holler, he might intimidate the usurper, which ends up to be the right strategy. But if he misjudges the opponent, he is road-kill. Is this the psychology behind “talking dirty” by boxers, and even chess players, before a match? The criticism of such a model is that it assumes “perfect knowledge”. The chimp assesses his chances of intimidating and acts on it. But we know that there is no such thing as perfect knowledge. We make decisions based on some knowledge and a lot of intuition. In fact, it was demonstrated that people who amass a big amount of information about an investment actually make worse decisions because of an inflated sense of confidence.
Another model, proposed recently by Johnson and Fowler suggest an alternative model: A biased self-belief can actually lead people to make the right decision, whereas an unbiased self-image would lead to a suboptimal decision. Witness the “science” of a well-crafted resumé; it will lend you a job. Would you hire somebody who describes himself as well-meaning, honest, but quite average in the performance of the required tasks?
“Johnson and Fowler suggest a remarkable alternative explanation. According to their model, a biased self-belief can actually lead people to make the right decision, whereas an unbiased self-image would lead to a suboptimal decision. That sounds counterintuitive, but the key lies in the authors’ departure from what could be called the ‘naive economist’s’ idea of how humans arrive at decisions (‘naive’ because many economists are not that naive at all).
The authors’ model envisages a valuable resource that two individuals can decide to claim or not. If both claim it, then they will fight over it, which is costly for both. The stronger individual will win the fight and gain access to the resource. If only one of them claims the resource, it goes to that person. If neither claims it, no one gets it.
Now, if both contenders could simply assess the fighting strength of the other with perfect accuracy, the optimal strategy would be a no-brainer: Fight if you are stronger, concede if you are weaker. But it gets interesting if the contestants have imperfect information about each other’s strength. In this situation, contestants might back off because they think their opponent is stronger than he or she really is. A weaker contestant could then win a reward if she claims it while the opponent backs off.
This situation can be dealt with within the realm of what economists call perfect rationality, which assumes that both parties understand all aspects of their situation and that they correctly anticipate the odds that the other player will claim the resource. But Johnson and Fowler suggest that there is a shortcut to the right decision. The shortcut combines a simple heuristic—fight if you think you’re stronger—with a bias. If the resource is valuable relative to the cost of fighting, then the risk of an extra battle here and there is outweighed by the gains made when otherwise unclaimed resources are won, which makes overestimating one’s own fighting abilities worthwhile. If the cost of fighting is large relative to the value of the resource, then it is better to underestimate one’s own strength. The behaviors described by the authors’ model are actually more complex than described above because the model also predicts that populations can, for instance, evolve to a stable mixture of both over- and under-confident people.”
For us, non-specialists, it matters little which model explains best the behavior of self-importance in terms of natural selection. The bottom line is that it works. But what either model fails to explain to us, perplexed citizens trying to make a momentous political decision is, is Gingrich a Newt, or a newt?