Top Ten Behavioral Biases, Illustrated #4: Intentions and Outcomes (Self-Serving Bias)

The movie comedy Mike and Dave Need Wedding Dates (language very NSFW) opens with a montage of the title characters at various events, laughing, hanging out, and having a good time. Everyone around them is enjoying their funny antics.

When their parents stage an intervention of sorts and tell them how “you two ruin” every family gathering, the boys are baffled as they relate how everyone loves having them around. In response, their parents show a video of the real (rather than misremembered) events wherein the brothers ended up causing injury and massive property damage while destroying the family get-togethers. Mike and Dave are genuinely astonished by this, asking “where are the epic tracking shots of smiling faces” that they remember.

Mike and Dave have been taken in by self-serving bias, our propensity to attribute positive outcomes to skill and negative outcomes to luck. In other words, our successes reward out efforts while our failures are someone else’s fault or simply bad luck. Thus, as with the fundamental attribution error, successes are outcome-based and failures are judged by our intentions.

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In the same way, coaches, players, and fans attribute wins to great coaching, great players, and excellent preparation. Losses are caused by bad officiating (language NSFW).

The Houston Astros cheated like crazy in 2017 and won the World Series. Insanely, the Astros’ owner insists that because his team won it all, the cheating didn’t impact the outcome. Somehow. He couldn’t have been any more self-serving.

Ray Dalio is a hedge fund billionaire, who sees himself as a genius and a hero. His firm is bizarre, secretive, and hugely successful, and its employees all rate one anothers’ believability pretty much constantly while algorithms control the firm’s trading. The essence of Dalio’s philosophy is that firms and groups need “idea meritocracy” and a “radical transparency” such that everybody is free to challenge everybody else without fear such that “the best ideas win.”

I have no doubt that the leadership within Dalio’s firm routinely tells subordinates exactly what they think about their ideas. However, I have always been suspicious of how often Dalio’s “free exchange of ideas” works from the bottom up. No matter what Dalio insists, I wouldn’t expect (consistent with self-serving bias) those without power within the organization to challenge the elites very often. Now it seems clear my suspicions have a basis in fact. As Dalio recently told a subordinate who disagreed with him, “If you’re so smart, why aren’t you rich?”

A famous political figure has the same sort of problem.

Why indeed.

Drivers on the freeways of Southern California, where I live, routinely deal with aggressive drivers. Even if I am paying careful attention, another driver will often enter my lane, seemingly out of nowhere, and cut me off. Sometimes these drivers will even share a not-so-friendly finger with me after they have cut me off. When something like that happens, I react poorly. I get angry. I rave. I lean on my horn.

The other drivers’ actions are all that matters. They are without excuse.

When I cut someone off, on the other hand, I have excellent justification and it controls. I didn’t see my turn or the other driver. Or I’m late. Or I got in the wrong lane by mistake (sort of).

When another driver cuts me off, the action itself establishes that he’s an idiot. When I cut somebody off, my intentions (or plausible intentions) control my moral evaluations justifications and exonerate me — at least in my head.

That’s self-serving bias.

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