Our tendency to believe that the worst possible thing that can happen is the worst possible thing we know has happened — the name given by Nicolas Taleb in his book Antifragile. So, should we plan to stress test an investment portfolio, for example, we might test it against how it fared in the worst market crash. Or stress test a building for the biggest known earthquake, or a nuclear reactor for the biggest known tsunami. And yet, when each of these events happened, they were bigger than what had come before, and the same could happen again.

Lucretius was a Roman philosopher who wrote that:

The fool believes that the tallest mountain in the world will be equal to the tallest one he has observed.

Also known as The Lucretius underestimation.

See other sketchplanations on cognitive biases.

The Lucretius problem

These terms come around a bit, and I wanted to get them clear in my head so I understood the difference.

Cognitive bias: predictable patterns of thought and behaviour leading to incorrect conclusions. Things like anchoring, where we are predictably led astray by the presence of a previous number we have seen.

Heuristic: mental short-cut to solve common problems. Things like social proof, how if others seem to like something that’s a short-cut for we’ll probably like it.

Logical fallacy: a flaw in our reasoning leading to a faulty argument. Things like the sunk cost fallacy, where we will sometimes make ourselves unhappy in the future because of something we’ve already done that we can’t change. The logical step would be to choose the path that would make you happiest in the future regardless of any sunk costs up to now. Turns out that’s hard.

Sketchplanations tagged with fallacy