Hofstadter’s Law

Douglas Hofstadter in his book Gödel, Escher, Bach: An Eternal Golden Braid (1979) named Hofstadter’s Law which states:

It always takes longer than you expect, even when you take into account Hofstadter’s Law.”

Hofstadter’s Law is easy to understand: complex and/or infrequent tasks take a longer time to complete than estimated. This law is particularly relevant if someone is considering how long it will take themselves to perform an operation, as opposed to someone else, as people are over-confident about their abilities. 

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Talisman

Talismans are a part of everyday life, even though most people are not familiar with the term.

Merriam-Webster’s dictionary defines a talisman as:

  1. an object held to act as a charm to avert evil and bring good fortune
  2. something producing apparently magical or miraculous effects

A talisman is a symbol. Used strictly, it can have a voodoo connotation. As a mental model, the term talisman has grown to be a representation of an idea or ideal. It is an internal reminder of values that are important to the person, or an external signal of a stance to outsiders. 

Everyone projects images to themselves or others. Below are a few thoughts on the term and how they are used throughout our society. 

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Publication Bias

Scientific studies are not always published. Those studies that prove a theory and are significant make it into their intended publications, while insignificant or negative results are discarded. The number of studies that do get published is a fraction of those that are produced and submitted to journals. In short, there is a distorted representation of data on a given subject; a filtering process, to which the public is largely blind.

Publications only have so much space. Insignificant results or indeterminable conclusions are not of interest; they are saying, “We thought X was true, but it really isn’t.”.  Scientific journals also don’t publish studies that disprove previous studies that were already published. Why would a scientific journal be interested in publishing a study that negates a hypothesis? Also, didn’t someone already cover that hypothesis with a published result? Articles have already been written about those published studies so why revisit them?

There is a problem with this method of decision-making. Not only does the general public get only a small glimpse into the overall field of study, but those studies that do get published could be erroneous or misleading, and lead to that theory catching hold in the zeitgeist.

The famous paper that highlights this publication bias is: Why Most Published Research Findings Are False: by John Ioannidis in 2005. Since then, scientists, the media, and to a lesser extent the public, have been more careful about how much faith they put into published studies.

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Third Story

In a conflict/dispute, there are two sides to any argument. There is what one side experiences or thinks, and there is the competing side. These perspectives are two different versions of the same story. The “third story” is a concept where an objective, impartial perspective attempts to distill the argument down to its core elements and provides a reasonable counterpoint for either party to consider.

Thinking in terms of the third story can help in both the business and personal worlds. The main upside of utilizing this third story technique is to develop and utilize empathy. Seeing an argument from the other person’s perspective can help to understand why they are in disagreement. Additionally, speaking of conflicts in terms of a third story shows that one or both sides are willing to be reasonable and objective in the conversation, rather than stubbornly digging their heels in about their own interpretation or views. 

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Adverse Selection

When one side of a transaction knows more about the sale than the other, the result is adverse selection. The information advantage allows for one participant (Amy) in the trade to benefit from the transaction at the expense of the other party (Betty). The party without the information, Betty, knowing that the transaction likely includes adverse selection, is concerned that the trade may be unfair towards her. Betty may be so worried about that information disadvantage that she will adjust the pricing for that transaction to be more in their favor to her or Betty may simply decide to not do the transaction at all with Amy. If enough transactions for that type of trade are rescinded, then the volume of trades in the market diminishes, which has a greater effect on the market for those transactions in general. In short, distrust leads to inefficient markets.

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