Series 2, Episode 14: The Illusion of Control
Welcome back to the bitesize behaviour podcast and today we start with a question. Please go with your instinct here. It’s not a trick question but just go with whatever answer first pops into your head.
Are you less likely to get into a car accident if they are driving than if you are a passenger.
YES or NO?
This question has been asked many times in research around the world, and the answer that most frequently pops up is ‘YES’, I’m less likely to get into a car accident if I’m the one driving.
Time and again, researchers have shown that people often believe that they have more control over events in their lives than they do - especially when such control is impossible.
Take the question above as an example. You may very well be a great driver, but you have absolutely zero control over every other driver you share the road with. Every time we get into a car, we need every other driver that we come across to behave and also drive well in order that we can get to our destination in one piece. It only takes one other driver to be an idiot for a split second, and the story changes. Over this, we have no control at all.
This belief - that we have greater control over things than we actually do - is called the Illusion of Control. And we do love believing that we are more in control than we actually are, don’t we? Be honest! I’ve read that some psychologists believe ‘control’ to be the number one human addiction. I’m not sure if that’s true, but it is a very powerful behaviour.
OUR EVOLUTIONARY STORY
Now this illusion of control has been with us for a long, long time. It’s part of our story - our evolution. Humans have long tried to control the environment we live in. Think about our earliest ancestors. They spent a great deal of time and effort building shelters to protect themselves from all sorts of weather. They made clothing that keep them warm in winter and cool in summer. They grew their own food and built systems to ensure it wasn’t eaten by hungry animals. All of this was completely within their control.
But they couldn’t control the weather, so they prayed to the weather gods. They danced, they sacrificed animals, all in the hope that the weather gods would be kind to them. If the weather did as they prayed for, it was their prayer, their dance, their sacrifice that made the weather gods be merciful. If it didn’t stop, well they weren’t praying hard enough.
This led to early humans believing they had a hand to play in something that was absolutely beyond their control, and this story that we tell ourselves, that we are in control, continues to this very day.
You see the illusion of control a lot in gambling. People playing cards, craps, or roulette thinking that if they sit in a particular seat, wear a lucky pair of socks, blow on the dice, that it will give them a degree of control that will see them win. This belief in luck, or even in superstitions, is all to do with our illusion of control.
And when it comes to money and investing, people believe that if they have control over the investments they chose or the stocks they pick, then the outcome is more likely to be good than if they have no control at all, even if the investment choice is being selected by an investment professional.
What’s really interesting here is that if you and an investment professional jointly choose an investment and it went wrong, it would be the professional’s fault. If it well well, the success would be down to the choices that you made and not necessarily the professional. This is the illusion of control and such is the power of our own self belief.
RECOGNISE WHAT YOU CAN AND CAN'T CONTROL
So, if the illusion of control means we overestimate the influence that our behaviour has over uncontrollable events, what can we do about it? The most important step is to recognise that there are things that we can control and there are things that we can’t.
I can control how much money I invest in the stock market, when I put it it, when I take it out. But I can’t control the stock market, or the companies that make up the stock market. This means that if I invest my money, a big part of the success or failure of that investment is beyond my control and in order to be a successful investor, I need to accept this.
Going back to the beginning. Yes, I can control how I drive, I can control whether my car is roadworthy or not. But I can’t control how everyone else drives, so I take all the necessary precautions I can to make sure that I am as safe as I can be. The rest - it’s beyond my control.
It’s about accepting this and focussing our attention on what we can control, and not wasting our precious time and effort on the things we can’t. The relief, the freedom that accepting this can bring - from experience, can be a huge weight off your shoulders.
So - that’s it for today. In the next episode of Bitesize Behaviours we’ll look at the behaviour that can see you throwing good money after bad. We’ll be looking at the sunk-cost fallacy.
See you next time on bitesize behaviour.