Exponential growth bias? Hmm!


instantaneous rate of change

A simple mathematical mistake. 

May explain why many people underestimate the dangers of coronavirus. And choose to shun social distancing. The waring of masks rules and handwashing.

Imagine you see an ad. A building society offers to double your money every three days.  You invest just £1 today, roughly how long will it take for you to become a millionaire?

Would it be three or six months or a year?

Beginning with your initial investment of £1 you would be a millionaire in 60 days. Your balance would be exactly £1,048,576.

Within a further month, you would be a billionaire.

By the end of the year. You would have more than £1,000,000,000,000,000,000,000,000,000,000,000,000 an “undecillion” pounds that’s 1066.

Do not worry if your estimates were way out, you are not alone. 

Many people consistently underestimate how fast the value increases. This error is known as the “exponential growth bias.” For many such, a concept seems abstract. This may explain why people take the decisions they do with regards to COVID19.

Several studies have shown. That people who are susceptible to COVID19 (exponential growth bias). Are less concerned about Covid-19’s spread. They are less likely to endorse measures. Like social distancing, hand washing or mask wearing.

In other words, this simple mathematical error could be costing lives. Correcting peoples understanding. Should be an absolute priority. If any attempt to flatten curves and avoid second waves of the pandemic around the world is to happen.

Our tendency to overlook exponential growth has been known for millennia. It was only in the late 2000s that scientists started to study the bias formally. Research shows that most people intuitively assume that most growth is linear. This leads them to vastly underestimate the speed of exponential increase.

Bank Balance

Think about your bank balance example. Most savings accounts offer compound interest. You accrue additional interest on the interest you have already earned. This is a classic example of exponential growth. It means that even low interest rates pay off handsomely over time.

Alternatively, bias renders vulnerable people to unfavorable loans, where debt escalates over time.

Surprisingly, a good education does not prevent people from making these errors.

Even mathematically trained science students can be vulnerable. This may be because they are relying on their intuition. Rather than deliberative thinking. So that even if they have learned about things like compound interest. They forget to apply their learning. 

To make matters worse. Most people will confidently report understanding of exponential growth. Yet still fall for the bias when asked to estimate things like compound interest. So, it is nice to know you are very far from being alone.

According to various epidemiological studies. Without intervention the number of new Covid-19 cases. Doubles every three to four days.

This is reason why so many scientists advised rapid lockdowns. To prevent the pandemic from spiraling out of control.

The good news is when people are reminded of the exponential growth bias. Most people prove to be malleable to changing their minds. Ask people to calculate the growth in regular steps over a two week period. People generally improve their estimates of the disease’s spread. This, in turn, changes their views on social distancing.

Emphasising the amount of time that it will take to reach a large amount of cases. Together with the time that would be gained. By social distancing measures tends to improve people’s understanding of accelerating growth. Whereas simply stating the percentage increase each day. Tends to be dismissed by most people.

Reports should cover that day’s numbers and growth over the past week. Plus what will happen in the next days, week, month, if the same accelerating growth persists”. Doing so may nudge people to implement advice.

Think of it this way. In the US, where the pandemic has hit hardest. It took only a few months for COVID19 virus to infect more than five million people. “If government had attempted to overcome the exponential growth bias. And convinced all Americans of this risk back in March. It’s estimated 99% of people would have embraced all possible distancing measures.”

About the author 

Christopher Bird

Building your own Power App, BI solution, or automated workflow can be a mind-blowing experience. It can also be a nightmare. Particularly when you begin with a blank screen. My advice, get professional help as and when you need it. That's what successful people do.

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