We all know that knowledge is power. But can it be a curse?
For a minute, assume that you are an expert in financial derivative instruments:
- You are explaining to your friend – a History major – about how ‘call options’ work.
- You use terms like “European options”, “strike price”, “payoff” etc.
- Your friend is not able to understand anything you are saying.
- You are wondering why your friend is so incapable of understanding such a simple concept.
This is the curse of knowledge.
You know the subject you are talking about. But, you have forgotten how difficult it felt, when you were a student learning about complex financial instruments. You have been cursed by your knowledge. This is called “curse of knowledge”.
But why do we have this bias?
Because, we wrongly assume that others have same background knowledge on the subject, as we do. That’s never the case.
Real life examples
A good example of this bias is – teachers unable to make students understand a complex subject. They are unable to put themselves in the students’ shoes. Oh, what a curse!
An experiment done by Elizabeth Newton at Stanford proves the point:
- Two groups of people – tappers and listeners – were the subjects of the experiment. The tappers used their fingers to tap well-known melodies, and listeners were asked to identify those songs.
- Before the experiment, tappers were asked – “what is the probability that listeners recognize the songs correctly?”. Tappers estimated a 50% chance.
- But, listeners could recognize only 2.5% of the songs tapped!
Thus, people who knew which song they were tapping, over-estimated the ability of listeners to correctly guess the song. In their minds, tappers were thinking: “It is so obvious to me, which melody I am tapping. So, it should be obvious to the listeners as well.”
I remember one instance – which I now recognize as my encounter with this curse. I was an audit assistant in an accounting firm. We went for an internal audit in a start-up technology company, and a manager in the company was asking how they can save some taxes. He asked: “can I claim the investment in this building as an expense?”. I knew that a company cannot claim capital expenditure as an expense, but can only claim depreciation over a few years. I still remember myself laughing after the manager left our room. Why did I laugh? Because, I thought: “doesn’t the manager know such a simple thing?”. The manager was a tech guy, and I should not have expected him to know about tax laws! I now recognize that I was cursed by my knowledge of tax laws.
Curse of knowledge is related to hindsight bias. Once we know the outcome of an event, we tend to think that it was very much predictable. We are unable to put ourselves back in time – before the outcome became clear – and think about how the event could have turned out.
So, how to cure this bias?
- Understand that the ‘curse of knowledge bias’ exists (!). This is a common step to avoid any type of mental bias.
- Try to understand how if feels like NOT to know about something you are trying to explain. Think from a dumb guy’s perspective.
- When explaining to the other person, use simple, general language – free of jargon. Try to use metaphors.
Featured image: Pixabay