Ep73 “The Dangers of Group Think on Decision Making” with Adi Sunderam

People exclude true explanations rather than updating incorrectly

Instead of failing at Bayesian math, decision-makers exclude the true model from their consideration set, forcing them to assign higher probability to increasingly unlikely alternatives as confirming data arrives.

Dogmatic priors make beliefs immune to evidence

When individuals commit to the position that no data could ever change their view, they exhibit a 'dogmatic prior' that renders rational debate and belief revision impossible.

Communities enforce forbidden hypotheses through social penalties

Groups impose severe costs for considering certain explanations, creating echo chambers where members collaboratively generate convoluted alternative theories rather than facing excluded truths.

Intelligence enables sophisticated rationalization

Smart people are particularly adept at constructing creative explanations that fit data within restricted model sets, making them especially susceptible to this form of collective intellectual waste.

Stock Twits shows persistent belief clustering

Analysis reveals Tesla bulls initially reacting to negative earnings announcements but quickly coalescing on post-hoc explanations like 'Elon Musk is a genius' to preserve their prior worldview.

Identical economic data gets filtered through opposing models

During the 2021-2022 inflation surge, doves and hawks interpreted the same CPI reports through conflicting frameworks, with doves continuously shifting explanations rather than updating beliefs.

Political polls show temporary volatility but long-term stickiness

Scandals cause short-term poll movements that revert to baselines within weeks, consistent with people using flexible interpretations to absorb contradictory data without changing core views.