Note: This post was originally published in the August 2015 issue of Value Investing Almanack. To read more such posts and other deep thoughts on value investing, business analysis and behavioral finance, click here to subscribe to VIA.
“See, when you want to reverse the car to left, you have to turn the steering wheel to the left,” I told my wife while I was trying to teach her reverse parking.
“But when I turn left, the car is going towards right!” she exclaimed.
“No! The car is going towards left. See, the left tail lamp is going left,” I showed her in the side view mirror.
“Yeah but the right headlamp is going towards the right,” she pointed towards the right headlamp which appeared to be moving towards right from driving seat. Of course, it had to. If you are focusing on the front, the nose of the car will seem to go towards the right.
“But why are you focusing on the front head lamp? When you’re reversing your point of reference should be the tail lamp,” I explained.
“Then why didn’t you explicitly tell me that before?” she asked almost in complete frustration.
“I thought you would…” I started mumbling but before I could complete that sentence, a light bulb went off in my head. Eureka!
We were both right about “where the car was going” but our definitions of “where the car was going” were inconsistent. She was looking forward while reversing the car, like many amateur drivers do, while I assumed that she was looking back.
That day I learned a very important lesson not about driving but about “teaching how to drive”. And the lesson was – don’t assume things, even the trivial ones. But it’s not as easy as it sounds because what’s trivial for an expert may be quite complicated for someone who is just getting started.
Have you ever seen a bad movie where, in spite of a wonderful script, the director presents the movie in a way which just doesn’t make sense? On the other hand, there are those few delightful movies where, in spite of almost no strong story line, you’re blown away by the way movie unfolds scene after scene. It’s not only entertaining but engrossing too.
So what separates a great director from a mediocre one? I think, apart from skill, what makes a huge difference is the ability to tell a story. And what makes a great storyteller?
Instead of answering that, let’s invert it. What makes a bad storyteller?
The main culprit is curse of knowledge. This is what occluded my communication when I was trying to teach driving to my wife.
Curse of Knowledge
Curse Of Knowledge is a cognitive bias according to which “better-informed” people find it extremely difficult to think about problems from the perspective of “lesser-informed” people. In other words, the more knowledgeable you are about a subject, the more unnatural it becomes for you to communicate that knowledge in a simple and clear way.
Put simply, knowledge itself becomes a barrier to its own propagation.
This bias can completely destroy one’s ability to communicate ideas. That’s why teaching effectively is such a difficult task. Being knowledgeable about something doesn’t ensure that you can teach it effectively. The teacher might think that she is pretty clear but the students feel that the teacher is either going too fast or simply sounding too disconnected.
So before I proceed, let me ask you – “Am I making sense here?”
If your answer is no then, ironically, the curse of knowledge is not letting me explain the idea of, well, “curse of knowledge”. In the language of software programming – it’s an unending recursion.
So what causes this behavioural bias? Let me take help from Heath brothers, who popularized curse of knowledge in their book Made to Stick. They write –
Becoming an expert in something means that we become more and more fascinated by nuance and complexity. That’s when the Curse of Knowledge kicks in, and we start to forget what it’s like not to know what we know…Once we know something, we find it hard to imagine what it was like not to know it. Our knowledge has “cursed” us. And it becomes difficult for us to share our knowledge with others because we can’t readily re-create our listeners’ state of mind.
Listeners and Tappers
To demonstrate this effect, Stanford University conducted an experiment which later came to be known as the Listeners and Tappers Problem. It’s such a simple experiment that even you can try it at home.
They designed a simple game in which people were assigned one of two roles: “tappers” or “listeners.” Tappers received a list of twenty-five well-known songs, such as “Happy Birthday to You”. Each tapper was asked to pick a song and tap out the rhythm to a listener (by knocking on a table). The listener’s job was to guess the song, based on the rhythm being tapped. Over the course of the experiment, 120 songs were tapped out. What’s interesting is that listeners guessed only 2.5 percent of the songs.
But here’s what made the experiment even more interesting. Before the listeners guessed the name of the song, the tappers were asked to predict the odds that the listeners would guess correctly. They predicted that the odds were 50 percent. So what explains this huge gap between tappers’ expectations (50 percent) and the actual result (2.5 percent)?
When a tapper taps, she is hearing the song in her head. Go ahead and try it for yourself – tap out “Happy Birthday To You.” It’s impossible to avoid hearing the tune in your head. Meanwhile, the listeners can’t hear that tune – all they can hear is a bunch of disconnected taps, like a bizarre Morse Code. In the experiment, tappers are flabbergasted at how hard the listeners seem to be working to pick up the tune.
The problem is that tapper is given the knowledge (the song title) that makes it impossible for him to imagine what it’s like to lack that knowledge. When he is tapping, he can’t imagine what it’s like for the listener to hear isolated taps rather than a song. This is the Curse of Knowledge.
In Teaching and Learning
According to Steven Pinker, a professor at MIT and bestselling author, overcoming the curse of knowledge is a big hurdle in teaching. He says –
…[curse of knowledge] is a lifelong challenge. It’s a challenge in writing, and it’s a challenge in teaching…The obvious solution is to “imagine the reader over your shoulder” or “to put yourself in your students’ shoes.” …but it’s not enough because the curse of knowledge prevents us from fully appreciating what it’s like to be a student or a reader.
Maybe you are using certain jargons or acronyms, which are routine for you but are difficult to guess for your audience. They might even think that you’re speaking a different language altogether.
The tappers and listeners are everywhere. CEOs and frontline employees, teachers and students, politicians and voters, marketers and customers, writers and readers. It becomes difficult to share the knowledge with others because we can’t readily re-create our listeners’ state of mind.
In Business and Investing
Sometimes curse of knowledge makes us vulnerable to potentially grave mistakes which would have been glaringly obvious to us, had we looked at the problem from the eyes of an amateur.
Consider this – In a transaction between two parties, where one party is more informed (or knowledgeable) than the other, the negotiation may seem simple but can turn out to be complex. The better-informed party, due to the curse of knowledge, can end up with an inaccurate anticipation of lesser informed party’s judgment capability. This handicap can seriously undermine the better-informed party’s ability to take appropriate action.
Click here to watch the video.
The above video shows how the curse of knowledge can stump even professional poker players. Now don’t ask me to explain what happened in the video because my knowledge of poker is approximately less than zero. But, in short, the expert poker player overestimated the skill of his opponent and couldn’t just fathom how on earth can someone be so naive.
Similarly, it becomes a major hurdle for innovators to sell their product because they can’t ignore the privileged knowledge that they possess. They spend a lot of time innovating, tinkering, thinking, and experimenting, thus end up at a position where they have a far superior understanding about the value of their innovative products and services. Their customers (naive and less informed), on the other hand, can’t see the same value.
In a typical annual report where the management discusses “unlocking shareholder value,” there is a tune playing in their head that the investors can’t hear.
Overcoming the Curse
One of the best places to learn the cure for curse of knowledge is to read Warren Buffett’s letters to shareholders. Why are Buffett’s letters such a treat to read? That’s because he puts enormous effort to bring in simple analogies and beautiful metaphors for explaining ideas.
But we are not Buffett. So what do we do? By being aware of this curse and by using few tricks we can hope to minimize its effects.
First, understand your audience and accordingly plan your speech or presentation. You need to know where your audience fall in the knowledge (about your topic) spectrum. If you’re answering a question, don’t forget to repeat (even rephrase) the question back to the person who asked it – “So as I understand, your question is…”
In other words, practice empathy. Putting yourself in the shoes of others is very important for overcoming this curse. Please read Prof. Sanjay Bakshi’s note on empathy and how it relates to being a successful investor. And here is what Seth Godin has to say about empathy –
Empathy doesn’t involve feeling sorry for someone. It is our honest answer to the question, “why did they do what they did?”
The useful answer is rarely, “because they’re stupid.” Or even, “because they’re evil.” In fact, most of the time, people with similar information, similar beliefs and similar apparent choices will choose similar actions. So if you want to know why someone does what they do, start with what they know, what they believe and where they came from.
Dismissing actions we don’t admire merely because we don’t care enough to have empathy is rarely going to help us make the change we seek. It doesn’t help us understand, and it creates a gulf that drives us apart.
Second, challenge your assumptions. Seek a second opinion from others. Discuss your writing, presentation, or speech with somebody who is less knowledgeable about the subject and seek their feedback. Even better, ask somebody to play the devil’s advocate – your spouse maybe (no pun intended).
The “curse of knowledge” blindness isn’t a handicap for a person who isn’t so knowledgeable about the same subject. This will help you cautiously unlearn and relearn what you already know – from a different perspective. Pinker suggests –
That’s why writers need editors: The editors force them to realize that what’s obvious to them isn’t obvious to everyone else… Most of the work of writing is in the revising. During the first pass of the writing process, it’s hard enough to come up with ideas that are worth sharing. To simultaneously concentrate on the form, on the felicity of expression, is too much for our thimble-sized minds to handle. You have to break it into two distinct stages: Come up with the ideas, and polish the prose. This may sound banal, but I find that it comes as a revelation to people who ask about my writing process.
Third, break down complex things into smaller components and explain each of them in a simple manner and correlate all of them later to give a big picture. And the best way to achieve that is to tell a story. Storytelling is very effective in relating to the audience. When you tell a story the odds are high that you will keep it simple without missing the important points.
Another interesting solution, although a time consuming one, is to ask prodding questions. This technique is also known as Socratic Solitaire. Instead of directly dumping the knowledge on to your audience, you ask questions which nudge them in the right direction. Rather than revealing the insights upfront, you let the other person discover the answers himself. You just supplement his thinking by course correcting his line of inquiry with your carefully crafted questions. This works better in one to one set up, like a master interacting with one of his disciples.
Most of the time we’re tapping at each other and getting frustrated when other people don’t guess the right song. So if you want to know what it’s like not to know something that you know, the answer is not to try harder, because that doesn’t work very well. The answer is to interact with someone who doesn’t know what you know, but who is intelligent, curious, and open.
I would like to add here that the curse of knowledge strengthens my case which is – “teaching is the best way to learn”.
In an attempt to teach something effectively, one has to overcome the curse of knowledge, which forces him/her to think about the topic from various angles. This exercise ends up revealing gaps in our own knowledge and thus we gain a better handle on the subject. That’s a way to turn a curse into a boon.
Take care and keep learning.