Evolutionary Mismatch
Taleb uses evolutionary mismatch to interpret emotional reactions to modern risks. He contrasts familiar human feelings with environments that now present much larger amounts of information and more difficult probability judgments.
THE IDEA
Our Natural Habitat
I will not delve too deeply into amateur evolutionary theory to probe at the reasons (besides, in spite of having spent some time in libraries I feel that I am truly an amateur in the subject matter). Clearly, the environment for which we have built our endowment is not the one that prevails today. I have not told too many of my colleagues that their decision making contains some lingering habits of cavemen—but when markets experience an abrupt move, I experience the same rush of adrenaline as if a leopard were seen prowling near my trading desk. Some of my colleagues who break telephone handles upon losing money might be even closer in their psychological makeup to our common origin.
This might be a platitude to those who frequent the Greek and Latin classics, but we never fail to be surprised when noticing that people a couple of dozen centuries removed from us can exhibit similar sensibility and feelings. What used to strike me as a child upon visiting museums is that ancient Greek statues exhibit men with traits indistinguishable from ours (only more harmonious and aristocratic). I was so wrong to believe that 2,200 years was a long time. Proust wrote frequently about the surprise people have when coming across emotions in Homeric heroes that are similar to those we experience today. By genetic standards, these Homeric heroes of thirty centuries ago belong to the same species as the pudgy middle-aged man you see schlepping groceries in the parking lot. More than that. In fact, we share much of our biological inheritance with the people who perhaps eighty centuries ago started being called “civilized,” in that strip of land stretching from southeastern Syria to southwestern Mesopotamia.
What is our natural habitat? By natural habitat, I mean the environment in which we reproduced the most, the one in which we spent the highest number of generations. This account uses 130,000 years as an estimate of our species’ age and the African savannah as shorthand for ancestral conditions. But we do not have to go back that far in history to get the point. Imagine life in an early urban settlement, in Middle-Town, Fertile Crescent, only about 3,000 years ago—surely modern times from a genetic standpoint. Information is limited by the physical means of its transmission; one cannot travel fast, hence information will come from faraway places in concise batches. Traveling is a nuisance fraught with all manner of physical danger; you will settle within a narrow radius of where you were born unless famine or some invading uncivilized tribe dislodges you and your relatives from your happy settlement. The number of people you would get to know in a lifetime will be small. Should a crime be committed, it will be easy to gauge the evidence of guilt within the small number of possible suspects. If you are unjustly convicted of a crime, you will argue in simple terms, propounding simple evidence like “I was not there as I was praying in the temple of Baal and was seen at dusk by the high priest” and add that Obedshemesh, son of Sahar, was more likely to be guilty because he had more to gain from the crime. Your life would be simple, hence your space of probabilities would be narrow.
The real problem is, as I have mentioned, that such a natural habitat does not include much information. An efficient computation of the odds was never necessary until very recently. This also explains why we had to wait until the emergence of the gambling literature to see the growth of the mathematics of probability. Popular belief holds that the religious backdrop of the first and second millennia blocked the growth of tools that hint at absence of determinism, and caused the delays in probability research. The idea is extremely dubious; we simply did not compute probabilities because we did not dare to? Surely the reason is rather because we did not need to. Much of our problem comes from the fact that we have evolved out of such a habitat faster, much faster, than our genes. That does not require our genes to have remained entirely unchanged.
When to use it
Trading and market reactions: Recognize that sudden market moves trigger adrenaline-based fight-or-flight responses, which can lead to impulsive decisions; slow down and use analytical tools.
Public health messaging: Design communication about rare but serious risks (e.g., new diseases) by acknowledging that our brains are wired to overreact to immediate visible threats and underreact to abstract or delayed ones.
User interface design: Create interfaces that account for intuitive biases, such as overweighing salient information or neglecting base rates, to help users make better choices.
Long-term policy making: Account for the tendency to discount future consequences when addressing issues like climate change or pandemics, and frame policies to leverage immediate rewards or visible benefits.
FROM THEORY TO EVERYDAY LIFE
In practice
Market Reaction as Leopard Response
When markets experience an abrupt move, the adrenaline rush is similar to the instinctive response to a predator like a leopard, illustrating how ancient survival mechanisms are triggered in modern financial contexts.
Ancient Greek Statues and Genetic Continuity
Taleb recalls being struck by the familiar features of ancient Greek statues. He uses the resemblance to illustrate continuity across generations; the statues themselves do not establish a claim about genetic change.
A MOMENT TO REFLECT
Put it to work.
In what ways might your financial decisions be influenced by instincts that were adaptive for survival on the savannah but are maladaptive in modern markets?
Consider a recent situation where you overreacted to a perceived threat. Was it truly a threat in the modern context, or an ancient reflex?
How might understanding evolutionary mismatch help you improve your risk assessment and decision-making in areas like health, finance, or relationships?
CONTINUE THE CONVERSATION
Source texts
- Fooled by Randomness The Hidden Role of Chance in the Markets and in Life (Nassim Nicholas Taleb)