Column: Perception of risk influences decisions
By Rich Elfers
“If people perceive themselves to be in the domain of gains, they tend to avoid taking risks, fearing that they will start losing. But when they find themselves in the domain of losses, they become more willing to take them (risks), desperate to somehow reverse their fortunes.”
These are the words of Yuen Foong Khong in his May/June 2017 “Foreign Affairs” article entitled “Mind Games: The Partnership That Upended Social Science.”
Khong’s statement is based upon “prospect theory,” a political science perception of human nature.
This theory has been used to explain Chinese leader Mao Zedong’s decision to attack a stronger U.S. military during the 1950 Korean War where over a million Chinese are thought to have perished. Mao correctly believed he could drive the Americans/U.N. forces back. He was afraid a western victory would threaten Chinese security.
It was also seen in President Jimmy Carter’s failed rescue attempt of American Embassy staff in Tehran in 1980. Carter had reason to believe the rescue attempt might work.
A third such example of prospect theory was President George W. Bush’s ill-fated invasion of Iraq in 2003. Bush was deeply concerned about the risk of weapons of mass destruction in the hands of Saddam Hussein. Bush invaded because he felt unnerved and insecure due to 9/11.
In each case, the leaders were willing to risk the use of military force, even though the chances of success were unclear.
This brings us to the recent end of President Trump’s first 100 days. He has suffered judicial defeats with his immigration executive orders, and a legislative setback in the repeal and replacement of Obamacare. It became such an issue to the president that he has pushed the House to try a second time to repeal it without the needed Republican votes, and with Democrats united against the changes. Even if he were to succeed, he is more concerned with a victory than he is with the social and political impact of the change upon millions of Americans who stand to lose medical coverage.
President Trump has reversed himself on several fronts in the past few weeks. He now states “NATO is not obsolete.” He sent 59 missiles into Syria after he had repeatedly warned President Obama not to get involved in that bloody civil war. Trump also repudiated his statement that China has been manipulating its currency. Now he is rattling the saber against North Korea, perhaps in hope of improving his rather miserable showing in his first months of office.
Trump seems to be on the cusp of another proof of the prospect theory. He is desperate for a win and a reversal of his recent political losses. This does not bode well for him, the nation or the world.
Khang’s article tells us that most of us make decisions based upon what is called System 1, “fast thinking” – gut reactions, mainly unconscious and prone to errors. Most of the time this approach works, especially for Donald Trump. The advantage of System 1 thinking is that people learn from their mistakes, and the lesson is seared in their memories, allowing them to improve decision-making in the future.
System 2, “slow thinking,” reflects a more deliberate and conscious process. System 2 thinking usually comes into play “to correct the excesses of System 1.”
Let’s hope this is what will occur with Donald Trump. He is relying more on his level-headed staff members such as generals Mattis and McMaster. He has down-rated and isolated his nationalist-leaning adviser Steve Bannon for the advice of his more mainstream son-in-law, Jared Kushner.
Let’s hope our president’s learning curve is steep and does not result in a major catastrophe for the nation and the world as the pressures of the office force change upon our beginner president.
Rich Elfers is a columnist with the Courier-Herald in Enumclaw, a former Enumclaw City Council member and a Green River College professor.