The predictable irrationality of Tesla panic
Evolved human psychology and systemic media bias has created false narratives around crashes, fires, and executive turnover
In order to invest wisely, it is necessary to have a correct mental model of the companies that you are betting on — or against. Unfortunately, the human brain evolved in the world of stone tools and hunting-gathering, so we have natural inductive biases that drive us toward incorrect mental models of the modern world. For instance, the availability heuristic: the more often you see something happen, the more often you think it happens. For Paleolithic humans, this made perfect sense. For 21st century humans, this inductive bias is often misleading.
We no longer just see real, first-hand events. Trillions of events occur every day, and we filter them down using technologies like broadcasting and the Internet and social institutions like the news media. Our evolved availability heuristic has been co-opted by an information landscape in which the frequency that we see events happening often has no correlation or even an inverse correlation to the frequency with which they actually occur. If every single one of the 1.3 million annual deaths from car crashes were reported with the same urgency and alarm as plane crashes, I imagine a lot fewer…
