If you want to make God laugh, tell him about your plans – Woody Allen used to say. In spite of this warning people seem to have an unrealistically high level of optimism with regard to their ability of making predictions about social phenomena. Forecasting events in the world of social life is extremely difficult, and even the greatest experts dealing with it may fail. Who was able to predict Brexit or Donald Trump’s victory in American presidential election? "Tuesday's meeting of clairvoyants will not take place due to unforeseen circumstances" - said an announcement found in a newspaper.
In the social context forecasting itself might influence the future by for instance tainting the prediction otherwise known as self-contradictory prophecy. Suppose that one day a three-day rise in prices of stocks would be announced, followed by a strong decline in prices. Most of the stock holders would try to sell them not later than on the third day, causing the collapse of the previous trend and toppling the forecast (Popper, 1967).
Unfortunately, in spite of all difficulties we are condemned to engage in predictions as the quality of our lives strongly depend on it. Forecasting is part and parcel of the most valued and difficult arts. Accurate predictions have always been highly appreciated, hence the great esteem attributed to former oracles and prophets. In order to secure their predictions against falsification, they tended to build predictions in an unclear and vague way.
The forecasts of social science experts seem only a little better than those of non-experts
Recently social science media experts have supplanted the soothsayers of old. The forecasts of social science experts seem only a little better than those of non-experts. John A. Paulos complains that many social forecasts may be paraphrased in one of two ways. The first is: “Things will continue roughly as they have been – until something changes”, and the second “Things will change – after an indeterminate period of stability” (Paulos, 1995, p. 19). Both appear to be equally worthless. What more media experts quite often express their preferences rather than well documented knowledge.
Gardner and Tetlock (2015) notice that lay people think of probabilities in terms of “sure,” “impossible” or “maybe”, what is definitely too vague in order to make sound predictions. One of the many methods to proffer the scientific nature of the prediction used by some media experts is to present it with a precision difficult to achieve on the basis of available data, which is called spurious accuracy. Moore et al. (2015) asked students estimate the weight of a person on a photo. First, they were exposed to the opinions of experts. It turned out that students based their estimation on the most precise expert’s opinion, regardless of the accuracy of expert’s estimation really was.
Why do people trust useless media experts’ predictions?
According to Tyszka and Zielonka (2014) three main factors seem responsible for this: (1) peoples’ belief that experts have access to important and credible sources of information – for example, investors are certain that financial analysts know better than individual investors whether asset prices will rise or fall; (2) aversion to uncertainty and ambiguity – people prefer unreliable information over less information; (3) need for justification – people look for any reason to justify a necessary decision.
In an experiment carried out by Suen et al. (2014) participants played a game, in which they were trading stocks. Before making their decision they were divided in two groups and received either “expert” or “peer” advice. Participants from the first group were told the advice came from a certified financial expert. Participants from the second group were told the advice came from a student. Both sequences of advice were identical. Initially the advice was helpful, but progressively it became worse, reaching 100% wrong. Authors found that subjects who believed that they received expert advice followed the advice significantly longer than those who believed that they received peer advice. Despite that following experts’ advice led individuals to poor performance, they nevertheless persisted.
What is a relation between media experts' forecasts and decisions you make? Experts’ forecasts may substantially influence a subjective likelihood you assign to future events, evoking the overconfidence.
In conclusion, beware of media experts’ forecasting, especially forecasting about the future or, as Noreena Hertz (2013) advises, try to be an expert yourself.