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May The Fourth B.E. With You

cass_sunstein
By Cass Sunstein
Harvard Program on Behavioral Economics and Public Policy

May 04, 2019

Editor’s note: We’re all about The Avengers and Game of Thrones right now, and rightfully so, but let’s not forget one of the greatest leaps forward in storytelling and cinematic imagination ever –  Star Wars. Cass Sunstein took the time to write an entire book about that life-changing saga and dedicated a chunk of it to fitting behavioral science into that long ago, far far away world. His insights hold valuable lessons for organizations and young padawan alike.

Enjoy this excerpt from “The World According to Star Wars,” you will.

 

CHAPTER 6: BEHAVIORAL STAR WARS

For decades, behavioral economists and cognitive psychologists have explored how human beings depart from perfect rationality. It’s not exactly news to announce that we aren’t computers; in deciding what to do, people don’t quantify the expected outcomes and run probability calculations. Nor are we irrational, at least most of the time. What behavioral scientists have shown is that human beings suffer from predictable biases. The Jedi Masters who have uncovered such biases have won at least five Nobel Prizes in economics. Daniel Kahneman, author of the magnificent Thinking, Fast and Slow, is the most famous of them; to many people, he’s a real-world Yoda. (A good life lesson from Kahneman: “Nothing in life is as important as you think it is when you are thinking about it.” Think about that. It’s important.)

Some examples of human foibles: People are overconfident. (“The Resistance has no chance against the First Order; this is its final hour!”) We tend to focus on today and tomorrow, not next month or next year (“present bias”). We display unrealistic optimism. (About 90 percent of drivers have been found to believe that they are better than the average driver. Or: “Everything is happening as I have foreseen.”) We suffer from inertia and so we procrastinate. Instead of examining statistics, we use simple heuristics, or rules of thumb, in assessing risks. (Did a crime occur in my neighborhood in the recent past? Did the Empire attack a planet just like mine?) Our judgments are systematically self-serving. (“What’s fair is what’s best for me!”) We dislike losses far more than we like equivalent gains (“loss aversion”). So it shouldn’t be surprising that golfers do better putting for par than for birdie (a bogey is a loss, and people hate losses), or that if you want people to conserve energy, you’d do best to emphasize that they would lose money if they fail to use energy conservation techniques, rather than that they would gain money if they use such techniques.

In fact the modern era of behavioral science started in the late 1970s — just around the time that A New Hope was released. Can that possibly be a coincidence?

It can’t be! Star Wars is a series of case studies in behavioral biases. Darth Vader and Emperor Palpatine suffer from both unrealistic optimism and self-serving bias; they think that everything is going to work out in their favor. Their overconfidence leads them to make big mistakes at critical moments. (Snoke has the same problem.) But Star Wars knows that behavioral biases are not limited to those who favor the Dark Side. One of our heroes, Han Solo, is also subject to optimistic bias:

 

C-3PO: Sir, the possibility of successfully navigating an asteroid field is approximately 3,720 to 1!

Han: Never tell me the odds!

Of course things work out well for Han, certainly in navigating that asteroid field, as they do not for Vader and Palpatine. Optimistic bias can help you in the roughest times. (But in The Force Awakens, Han’s characteristic tendency to unrealistic optimism created a very big problem. He should have had a bad feeling about that.)

Both Luke and Rey suffer from inertia and its close cousin, “status quo bias,” which refers to people’s tendency to prefer things to stay as they are, even if it’s really a good idea to make a change. Inertia and status quo bias are why Luke chooses to decline Obi-Wan’s suggestion that he accompany him to Alderaan. They also account for Rey’s refusal of Luke’s lightsaber. The good news is that the Force runs strong in their family, and so they’re able to overcome their behavioral biases. (Isn’t that what the Force is for, after all? Isn’t that what Star Wars is telling us?)

It would be easy to teach a whole course on behavioral economics with close reference to Star Wars. Maybe that’s how the series is best understood. (But you’d have to be biased to think so.)

 

 

cass_sunstein
By Cass Sunstein
Harvard Program on Behavioral Economics and Public Policy

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