Near misses lead to taking unwise risks

A near miss is a concept from the aviation industry that refers to an incident that came close to a collision, but narrowly avoided it. A near miss means you got lucky. Varol notes:

Near misses lead people to take unwise risks. Rather than urgency, near misses create complacency. In studies, people who have information about near misses make riskier decisions than those with no information about them. Even though the actual risk of failure remains the same after a near miss, our perception of the risk decreases. At NASA, the management interpreted each near miss not as a potential problem, but as data that confirmed its belief that O-ring damage or foam shedding weren’t risk factors and wouldn’t compromise the mission. The managers had a perfect string of successes. The rocket scientists sounding the alarm were crying wolf.
…
Near misses are a rich source of data for a simple reason. They happen far more frequently than accidents. They’re also significantly less costly. By examining near misses, you can gather crucial data without incurring the costs of failure.^[1]

Duhigg notes that people with addictive patterns of behavior (e.g., compulsive gamblers) are more inclined to see near misses as “almost wins” that induced placing another bet, rather than an indicator that they should quit while they are ahead:

Two groups saw the exact same event, but from a neurological perspective, they viewed it differently. People with gambling problems got a mental high from the near misses—which, Habib hypothesizes, is probably why they gamble for so much longer than everyone else: because the near miss triggers those habits that prompt them to put down another bet. The nonproblem gamblers, when they saw a near miss, got a dose of apprehension that triggered a different habit, the one that says I should quit before it gets worse.^[2]

Schwartz observes that the near miss of a silver medalist leads them to be less happy with the outcome than the bronze medalist’s near miss:

Related to this “nearness” effect, who do you think is happier, an athlete who wins a silver medal in the Olympics (second place) or an athlete who wins a bronze medal (third place)? It seems obvious that second is better than third, so silver medalists should be happier than bronze medalists. But this turns out, on average, not to be true. Bronze medalists are happier than silver medalists. As the silver medalists stand on the award platform, they’re thinking about how close they came to winning the gold. Just a little more of this, and a little less of that, and ultimate glory would have been theirs. As the bronze medalists stand on that platform, however, they’re thinking about how close they came to getting no medal at all. The near miss of the silver medalists is triumph, whereas the near miss of the bronze medalists is also-ran obscurity.^[3]

#strategic #cognition