#18: berkson's paradox

Bias number 18 is known as the Berkson’s paradox. This paradox is most often found in decision making when assessing probability and statistical information that proves to be counterintuitive. When this happens, a negative correlation is made between two positive traits, even when the positive traits are unrelated and to the exclusion of cases where there is no correlation between the two traits.

This bias was discovered during the assessments of statistical information of hospital inpatients. Researchers made assumptions about diseases based on the data gained from inpatients rather than from the general population. As a result, correlations between one condition and another were incorrectly assumed to exist, without having tested a representative sample of the entire population.

In decision-making, the Berkson’s paradox arises when people make selections based on spuriously correlated criteria that, in reality, are completely unrelated. 

Let’s say, for example, that you are in the process of hiring an accountant to support your business. Based on previous experience, you might have had a good relationship with an accountant who had previously worked at one of the Big Four accountancy firms. You decide that accountants trained at other firms cannot match this experience. So, you decide that your new accountant must have had considerable experience having worked at the same Big Four firm as your previous one.

In this case, how is the bias influencing your choices? You have dismissed the validity of all other accountants to the exclusion of one firm, despite the lack of actual correlation between the accountant’s skill and the firm in which he or she was trained.

In fact, you are diminishing your chances of learning from accountants who have a different approach to helping you manage your business when you limit yourself to one set of criteria in making your decision.

The Berkson’s paradox influences hiring procedures in certain companies. Take graduate internships, for example. Certain companies will limit applicants to those from prestigious universities. They engage these universities to manage their graduate trainee intake, believing that they are getting the best candidates for the job. This implies that students from other universities are not the best candidates for graduate rolls.

Is this necessarily true? No! In fact, students who have not had the privilege of accessing an education from an established institution may be better candidates for certain roles. Attitudes of gratitude, eagerness and humility contribute to success and factor among the reasons why it is advisable to consider a variety of applicants.

That’s not to say that students who have experienced the privilege of a prestigious education do not adopt attitudes of gratitude, eagerness and humility in their roles. To suggest this is the case would exemplify the Berkson’s paradox in action in a reverse-discriminatory fashion.

How? Well, you might correlate prestigious education with high levels of confidence, inferring arrogance. And, while there may be a number of people educated in prestigious institutions who share these traits, there are an equal number that don’t and there are plenty of graduates from second- and third-tier-ranked universities who have cultivated an overly confident attitude.

The point is, these traits are not mutually exclusive. However, our brains, in the interest of preserving energy and making quick decisions, take shortcuts in thinking and create links that have no basis in fact.

A bit like stereotyping, it could be argued that stereotypes exist because there is a certain amount of truth to them.

Maybe and maybe not. Consider that when you see the world through a bias, like the Berkson’s paradox, you’re not actually seeing reality. What you’re seeing is reality that is skewed by the lens of your bias.

Ever heard the phrase, “Beer goggles?” Maybe you’ve been susceptible to this phenomenon on one or several occasions during your university days. (For the benefit of those unfamiliar with the phrase, it’s the tendency to find someone attractive while drunk on alcohol whom you would normally not find attractive whilst sober.)

The truth is, you don’t need alcohol to have a distorted view of reality. Every one of us walks through life seeing it from a point of view that may reflect our own view of reality, but doesn’t accurately reflect reality itself.

It interests me that people become very attached to their point of view. I am no exception, and while I challenge my point of view regularly, I’m still susceptible to it. We all are! Consider you’ve had a lifetime of bias development, having all sorts of distortions being thrown at you from different directions. What can you do?

Number One: admit that you are biased. If you are a living, eating, breathing human being, you are biased. The same is true of organisations.

Number Two: listen to your thoughts. You’ll start to hear just how biased those conversations you are having with yourself are. If you are an organisational policy maker, look at your policies for uncorrelated traits that govern your business practices.

Number Three: challenge your own correlations. How else might you define the criteria that governs your decisions?

Number Four: experiment with new ways of doing things. Unless you’ve got the stomach for major upheaval, start small.

Number Five: continue to challenge your assumptions as you assess the results of your experiments. Remember that the Berkson’s paradox can easily and silently creep in when you least expect it. Be mindful of the pernicious effect of biased thinking.

Number Six: expand your opportunities. Consider that doing things the way you’ve always done them will continue to give you the results you have come to expect. If you want to expand your results, you must implement new approaches to your business.

Number Seven: grow as a human being. Sometimes the fear of getting things wrong prevents people from discovering something new.

Remember, some of the best outcomes arise from mistakes. Dare to break old ground, rise above the surface and bloom in the fullness of your brilliance.

Get in Touch