Sunday, November 4, 2018

Perception and Entrepreneurship

Daniel Simons and Christopher Chabris’s selective attention test has become a classic in behavioral psychology. Before reading further, you should take the test at this link to their YouTube video.

Did you “pass” the test? (The rest of this post is after the jump.)

Only between 20-30% of people report seeing the gorilla that walks across the screen during the video. Does this mean that some 70-80% failed? Simons and Chabris draw that lesson, for the most part, and many others agree. Daniel Kahneman, for example, uses the experiment as part of his case in Thinking, Fast and Slow that people are “blind to the obvious” and consistently subject to all manner of error and irrationality.

Of course, if you re-watch the video you’re surprised to have missed the gorilla. It’s just so obvious! But I bet you also missed what large letter had been spray-painted on the background wall (“S”) and how many elevator doors were behind the people passing the balls to each other (three). Does your inattentional blindness to these things so obvious in retrospect make you feel dumb? Should your inattention to these (or any number of other) obvious details from the video also count as a failure?

From the experimenter’s point of view of full information, or from our own after they spring the “gotcha” and we’re made to feel foolish, it might seem like a failure to miss things so obvious. But this assumes an awful lot about what people should notice when they watch the video. I mean, we were told to look for the number of basketball passes. I got that right, dammit! I actually find it a little odd that the fact that I missed a dozen different “obvious” things that I wasn’t looking for (because they deliberately preoccupied me with something else) should count as a source of embarrassment about my cognitive abilities — even if one of those things is a person in a gorilla suit.

Another way to state my worry is that what counts as obvious isn’t some a priori fact. It isn’t simply given by the world. Rather, what will be salient in a situation will depend on the individual subject’s preconceptions or manner of approaching it — or even, perhaps, their general manner of approaching the world. We all have filters or theories or questions that we bring to bear on the world and use to interpret what’s going on around us. We just tune out other things. Really, we have to, and the things we tune out (and the things that will be salient for us) depend on all sorts of idiosyncratic details about our personalities and histories and interests, etc. — not just, or even primarily, our cognitive abilities.

This kind of reminds me of a well-worn economist joke, which goes something like this:
A young, new assistant professor of economics is walking with her older, more established colleague and says, “Hey, look! There’s a $20 bill on the sidewalk!” Without even looking, the colleague replies condescendingly, “Nonsense. If there had been a $20 bill lying on the sidewalk, someone would have already picked it up by now.”
The older colleague approaches the world more or less just assuming that the world is obvious such that people never fail to notice and exploit opportunities. Everything of potential value in the world has already been assessed and has clear labels (like “$20” written right on it). But, perhaps ironically, this assumption makes him miss some relatively important things about his world.

Other people approach the world very differently. They’re looking for things that haven’t yet been noticed. Or, at least they’re primed to notice when something that looks vaguely like a $20 bill comes along. Because, for real-world actors, most opportunities don’t come obviously labeled as $20 bills. The $20 bills available for picking up are disguised and real-world actors, people who tend to be entrepreneurial in this way or people who innovate, notice them when others didn’t, and probably couldn’t, given the way they approach the world.

And, the kind of thing people come to notice or discover are as varied as the people, or their filters they use, interacting with the world. Some things will be salient for them and others won’t. They may kneel down to pick up what seems like a $20 bill and it will turn out to be a rock. Or, whether there are many others who care about it will determine whether the thing they noticed counts as a $20, a rock, or even $100 bill.

This is what real-world entrepreneurship is like. Real entrepreneurs don’t operate from the experimenter’s position of full information. To be successful, entrepreneurs can’t just assume what does and doesn’t count as obvious and whether or not others would be blind to it. They aren’t simply figuring out how to best allocate given resources to known ends. They play a much more significant social role: they are (and have to be) alert to possibly newly available resources (things that weren’t previously recognized as resources) to new, possibly valuable, ends.

Our Annual Fall Ethics Symposium is Monday and Tuesday this week (November 5-6) on the Ethics of Innovation and Entrepreneurship (program link). Six visiting speakers will address ways innovation and entrepreneurship can contribute to the social good. How have innovation and entrepreneurship served as vehicles for drastic improvements in living standards and human well-being? What stands in the way of these benefits extending to more and more people? On behalf of the Center for Practical and Professional Ethics and the Department of Philosophy, I hope you can join us!

Kyle Swan
Philosophy Department
Sacramento State


  1. Really nice piece Kyle. Two quick points that you may simply agree with:

    (1) It's been a while since I read The Invisible Gorilla, but I think Simons and Chabris would just agree with everything you have said here. Their point (as I recall) is that the brain performs the magic trick of making us experience the world as given so convincingly, that we are all over-confident in the veridicality of our memories of the past. Everybody thinks that if there had been a gorilla or 20 dollar bill in plain sight, they would have seen it. The failure isn't in failing to see what was there, but in failing to appreciate the selectivity of perception and memory.

    (2) You write about the successful entrepreneur a little bit as if she is someone who is particularly good at spotting opportunities or value that other people do not. But perhaps most entrepreneurs are no better at this than anyone else. Entrepreneurial success may depend more on believing this about yourself and also having a very high tolerance for failure. The successful entrepreneur is typically someone who is highly optimistic, so much so that when her ideas keep failing, she just keeps dusting herself off and believing that the next one will work.

    1. Thanks, Randy. 1) Maybe. It’s been a long time since a read the book, too. Maybe there’s a difference between the lesson S&C draw and the way it’s been picked up — especially by behavioral economists interested in all sorts of nudging policy. In that case, I do think the gorilla experiment set-up assumes way too much about what should be obvious, such that it should count as a mistake or a failure or even surprising if we miss it.

      2) If I understand what you’re asking, I think some (much?) entrepreneurship is like that. Someone might have a really good sense of what people want and sees an unnoticed better way that she could get it to them. Others are just really persistent.

      But it could also work where an entrepreneur noticed something that there was hitherto no express demand for, but turns out to be something people in fact go for. Imagine the gorilla experiment where people who notice the gorilla get a prize (like $20). Cool. Those gorilla-noticers get it. Now imagine, alternatively, that people who notice the “S” on the wall get the $20. I doubt these would be the same people. In a similar way, it could be a matter of luck, in some sense, that what an entrepreneur notices or is primed to be alert to is something there’s a market for.

    2. Good, I think I agree. I think what I'd like to say is that whether or not we are inclined to explain the success of an entrepeneurial adventure as due to a noticing event of this kind, is almost entirely due hindsight. Amos Tversky showed that the hot hand in basketball is a myth by observing when knowledgeable people (announcers) agree that a player is hot, and then measuring the player's shooting percentage from that point forward. I bet if something similar could be done in business, they'd find the same thing. At the time of noticing, the claim that someone has noticed an opportunity has no predictive value whatsoever. I wonder if anyone has done that with Shark Tank episodes.

  2. Sure, I guess so. I mean the thing that interests me about entrepreneurship isn't really whether we can identify in people a special noticing or alertness faculty that allows them to be better than a coin flip at exploiting opportunities for pure profit in the market. I'm more interested in the background institutions and cultural attitudes that would lead lots and lots of people to try.

    By the way, I thought there was a backlash to the hot hand myth. I'll see if I can find it.

    1. Here's what I remember seeing:

  3. Right, thanks. I don't have a sense of where most statisticians are on this. I know there have been some follow up analyses that have been kind of mixed, but seemingly coming down in favor of there being a relatively small effect. What I don't understand is whether they have significant implications for strategy. Humans, of course, are going to be overconfident in their ability to detect hot-handedness and presumably would be better off ignoring it. But maybe real-time data analytics will change this.