Professor Alex Bavelas designed a fascinating experiment in which two subjects, Smith and Jones, face individual projection screens. They cannot see or communicate with each other. They’re told that the purpose of the experiment is to learn to recognize the difference between healthy and sick cells. They must learn to distinguish between the two using trial and error.
In front of each are two buttons marked Healthy and Sick, along with two signal lights marked Right and Wrong. Every time the slide is projected, they register their guess as to whether the cell is healthy or sick by pressing the button so marked. After they guess, their signal light will flash Right or Wrong, informing them whether they have guessed correctly.
Here’s the hitch—only Smith gets true feedback. If he’s correct, his light flashes Right; if he’s wrong, it flashes Wrong. Because he’s getting true feedback, Smith soon starts getting around 80 percent correct, because it’s a matter of simple discrimination. Jones’s situation is entirely different. He doesn’t get true feedback based on guesses. Rather, the feedback he gets is based on Smith’s guesses! It doesn’t matter if he’s right or wrong about a particular slide; he’s told he’s right if Smith guessed right, or wrong if Smith guessed wrong. Of course, Jones doesn’t know this.
He’s been told that a true order exists that he can discover from the feedback. He’s left searching for order when there is no true order to be found. The moderator then asks Smith and Jones to discuss the rules they use for judging healthy and sick cells. Smith, who got true feedback, offers rules that are simple, concrete, and to the point. Jones, on the other hand, uses rules that are, out of necessity, subtle, complex, and highly adorned. After all, he had to base his opinions on contradictory guesses and hunches.
The amazing thing is that Smith doesn’t think Jones’s explanations are absurd, crazy, or unnecessarily complicated. He’s impressed by the “brilliance” of Jones’s method and feels inferior and vulnerable because of the pedestrian simplicity of his own rules. The more complicated and ornate Jones’s explanations, the more likely they are to convince Smith. Before the next test with new slides, the two are asked to guess who will do better this time around. All Joneses and most Smiths say that Jones will. In fact, Jones shows no improvement at all. Smith, on the other hand, does significantly worse than he did the first time because he’s now making guesses based on some of the complicated rules he learned from Jones.
Source: What Works on Wall Street by James O'Shaughnessy
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