The Art of Thinking Clearly: Better Thinking, Better Decisions

See also Volunteer’s Folly (ch. 65); Action Bias (ch. 43); Procrastination (ch. 85)

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45
DON’T BLAME ME
Self-Serving Bias
Do you ever read annual reports, paying particular attention to the CEO’s
comments? No? That’s a pity, because there you’ll find countless examples of
this next error, which we all fall for at one time or another. For example, if the
company has enjoyed an excellent year, the CEO catalogues his indispensable
contributions: his brilliant decisions, tireless efforts and cultivation of a dynamic
corporate culture. However, if the company has had a miserable year, we read
about all sorts of other dynamics: the unfortunate exchange rate, governmental
interference, the malicious trade practices of the Chinese, various hidden tariffs,
subdued consumer confidence and so on. In short: we attribute success to
ourselves and failures to external factors. This is the 
self-serving bias
.
Even if you have never heard the expression, you definitely know the 
self-
serving bias
from high school. If you got an A, you were solely responsible; the
top grade reflected your intelligence, hard work and skill. And if you flunked? The
test was clearly unfair.
But grades don’t matter to you any more: perhaps the stock market has taken
their place. There, if you make a profit, you applaud yourself. If your portfolio
performs miserably, the blame lies exclusively with ‘the market’ (whatever you
imply by this) – or maybe that useless investment adviser. I, too, have periods
where I’m a power user of the 
self-serving bias
: if my new novel rockets up the
bestseller list, I clap myself on the shoulder. Surely this is my best book yet! But, if
it disappears in the flood of new releases, it is because the readers simply don’t
recognise good literature when they see it. And if critics slay it, it is clearly a case
of jealousy.
To investigate this bias, researchers put together a personality test and
afterward, allocated the participants good or bad scores at random. Those who
got scored highly found the test thorough and fair; low scorers rated it completely
useless. So why do we attribute success to our own skill and ascribe failure to
other factors? There are many theories. The simplest explanation is probably this:
it feels good. Plus, it doesn’t cause any major harm. If it did, evolution would have

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eliminated it over the past hundred thousand years. But beware: in a modern
world with many hidden risks, the 
self-serving bias 
can quickly lead to
catastrophe. Richard Fuld, the self-titled ‘master of the universe’, might well
endorse this. He was the almighty CEO of the investment bank Lehman Brothers
until it went bankrupt in 2008. It would not surprise me if he still called himself
‘master of the universe’, blaming government inaction for the bank’s collapse.
In SAT tests, students can score between 200 and 800 points. When asked
their results a year later, they tend to boost their scores by around 50 points.
Interestingly, they are neither lying nor exaggerating; they are simply ‘enhancing’
the result a little – until they start to believe the new score themselves.
In the building where I live, five students share an apartment. I meet them now
and again in the elevator, and I decided to ask them separately how often they
take out the trash. One said he did it every second time. Another: every third time.
Roommate #3, cursing because his garbage bag had split, reckoned he did it
pretty much every time, say 90%. Although their answers should have added up
to 100%, these boys achieved an impressive 320%! The five systematically
overestimated their roles – and so, are no different to any of us. In married
couples, the same thing happens: it’s been shown that both men and women
overestimate their contribution to the health of the marriage. Each assumes their
input is more than 50%.
So, how can we dodge the 
self-serving bias
? Do you have friends who tell you
the truth – no holds barred? If so, consider yourself lucky. If not, do you have at
least one enemy? Good. Invite him or her over for coffee and ask for an honest
opinion about your strengths and weaknesses. You will be forever grateful you
did.