What happens when you snatch a bone from a dog’s mouth?
If you needed to travel 160 KMs (100 miles) on France’s rural roads, it would take you about 1 hr 45 mins travelling at 90 Kmph. It would take you 2 hours to cover the same distance travelling at 80 Kmph. That is, it would take you about 15 minutes longer to cover the same distance travelling at 80 Kmph instead of 900 Kmph.
The French government reckons that by imposing a speed limit of 80 Kmph instead of 90 Kmph on rural roads, it can save 300 to 400 lives a year! You’d think, people will welcome such a move, given that the French folk aren’t known for their speed and efficiency. But, that’s not how the people reacted. Over 2 Mn French people have a signed a petition against it just because the speed limits have been reduced by 10 Kmph! Sounds a bit nutty, right? See here and here.
This is a classic case of irrational super reaction due to deprival, just as Charlie Munger said in his talk on the Psychology of Human Misjudgment at Harvard University in 1995.
“…the Munger dog, a lovely, harmless dog. The only way to get that dog to bite you is to try and take something out of its mouth after it was already there. And you know, if you’ve tried to do takeaways in labor negotiations, you’ll know that the human version of that dog is there in all of us.”
If you apply Munger’s thought process, you would come to see that over the years, the French have come to accept that 90 Kmph as the norm. And when some new law threatens to take that away (deprival), no matter the logic, it’s going to make them react viciously (super reaction). Comment peuvent-ils? (How CAN they?)
I bet you are thinking that what applies to the French doesn’t apply to you and me. Because, unlike them, you and I are rational, right? Wrong. We are just as likely to give a super reaction when faced with the prospect of deprival.
For example, when the traffic lights turn amber from green, motorists tend to speed up instead of slowing down to beat the lights. The motorists in their minds have accounted for a Green and now you are about to take that away (deprival) and hence are likely to speed up (super reaction). See some of the videos below.
My otherwise, peaceful neighbors get really mad (super reaction) if somebody parked his car in their designated slot (deprival) even for a few hours. It’s not the size of the offence, but the fact that somebody deprived them of what rightfully belongs to them that makes them mad.
Investors, that missed the D-Mart IPO bus in India and watched it go up 250% are more likely to invest in the next retail store IPO irrespective of quality of the offering, just to get even. They see the deprival of the gains and are likely to super react by investing in an inferior quality company.
The the French, Munger dog, the motorists, my neighbors, your neighbors, you and me are all alike deep down. We may or may not get more, but we certainly will not settle for less. And anytime, something or someone threatens to take away anything of ours, we are likely to do crazy, stupid things like jumping traffic lights.
But, unlike the Munger dog, you and I can strive to become a little less irrational each day. Rationality leads to better decisions and better decisions to better outcomes. It’s not easy, but we owe it to ourselves.
Have a nice day!
