Read and answer this simple question:
Susan and Jennifer are arguing about whether they should wear seat belts when they ride in a car. Susan says that you should. Jennifer says you shouldn't... Jennifer says that she heard of an accident where a car fell into a lake and a woman was kept from getting out in time because of wearing her seat belt, and another accident where a seat belt kept someone from getting out of the car in time when there was a fire. What do you think about this?
Perhaps it's not so simple now, is it?
Answer this yourself, but keep it in the back of your mind, while you realize the truth...
Human beings SUCK at understanding probabilities... esp. if they are not educated (through no fault of their own).
Human beings are easily influenced into overestimating or underestimating certain probabilities, through time, newsworthiness, and misunderstanding about small possibilities, and outright lies. Here are some of the things psychologists have learned over the years:
Newsworthy Information Affects Perception of Statistics
Human brain have a cognitive bias called 'availability' bias, in that fresh information, esp. those that captures our attention, such as disaster, death, huge lottery winning, or whatever captures your interest, will cause you to remember the information, and thus, influence your perception of likelihood of future events.
After a natural disaster, demand for insurance goes up, even though probability of disaster had not. People simply are more worried after a widely reported natural disaster.
Similarly, report of a recent disease will raise vaccination rates. After a meningitis outbreak at a major university on the East Coast, vaccine was offered within a week, and 95% of eligible student chose to take the vaccine. On the West Coast, a similar outbreak happened 5 months ago. Due to
FDA approval process, both East Coast and West Coast were given vaccines at the same time. Only 50% of students in the West Coast University chose to take the vaccine. The news is no longer fresh on their minds.
The more a particular risk or statistic is mentioned in recent news or dredged from memory, the more likely it will be weighed more prominently in one's decision process, even when they should not be.
Most scams rely on modern buzzwords to make sure they related to SOME terms in recent news, like "internet", "apps", "VOIP", "web ads", and so on. They want you to think that "tech" companies succeed because tech is mentioned all the time. And in turn, want you to believe their scam will be a 'success'.
Small Probabilities are Rarely Judged Correctly
Events of small, tiny, or negligible probabilities are downplayed or outright ignored, esp. when coupled with other biases.
Back in the 1980's when automobile seatbelt wearing became mandatory, many people still resisted wearing them. When questioned, they acknowledge that not wearing seatbelts is not a good idea, but most justified it by stating they don't get into accidents, or they haven't had an accident in many years. Their self-optimism bias made them believe that the small probability of getting into an auto accident is 'effectively zero'.
However, the small probabilities can also be over-weighed, esp. when the events are shocking. For example chances of disasters, such as nuclear reactor melt-downs, or
Liquefied Natural Gas (LNG) transport explosions, airline disasters, or terrorist attacks... or even something like mass shootings, are often vastly over-weighed and perceived to be far more often they they actually are due to media attention. For example, how many nuclear reactor melt downs have been there? Most people can only name 3:
Three Mile Island, Chernobyl, and Fukashima. There actually had been many more (give or take, about 20-30, depending on how you count the ones on-board Soviet submarines). But that's counting 60 years of nuclear reactors, over 400 plants currently in operation, and most of the problems had to do with the earliest (and thus, the less safe) models. Chances of a nuclear reactor melting down is exceedingly small, esp. given modern safeguards. Yet after Fukashima, many nations vowed to close their nuclear power plants and/or severely reduce plans to build them. In this case, news coverage has made the risk look that much larger than before.
Scams leverage this small probability misconception by emphasizing that everybody can be successful without mentioning the odds, usually stated as "if you work hard, you can be successful just like me." The definition of "success", the odds, and the definition of "work hard" are, of course, left vague. They simply neglect to mention that everybody has equal by miniscule odds. Then the scammer will emphasize that the potential victims are making the right choice, how it's a commitment to success, etc. Soon the participants will COMPLETELY ignore the odds that they may be participating in a scam, not a business.
