Part 3. Bird in the hand: the hidden workings of mental habits
Threats and opportunities
In the management theory, the notion of risk is closely linked to the effects of uncertainty on the organisation’s goals and includes both threats and opportunities. This makes perfect sense: In the complex and highly unpredictable world we live, it is difficult to know for sure whether what we see (let alone something that we try to foresee) is going to turn bringing benefits or losses, or both. It demands not only good evidence but also sound reasoning. However, it appears that due to certain sense-making mechanisms of our mind we frequently tend to hold to our initial judgements and easily dismiss any argument to the contrary, without attempting to think creatively. As a result, we miss opportunities. I will illustrate this thought on two examples which are metaphorically very close.
First case is borrowed from Shakespeare’s Tragedy of Macbeth. When asking the Three Weird Sisters about threat posed to him, Macbeth receives two foreshadows. One of them warns that he will be safe as long as Great Birnham Wood does not move uphill to attack him. Woods attacking the king does not match with Macbeth’s predefined understanding of things and he, without giving it another thought, dismisses it outright: ‘That will never be:/ Who can impress the forest, bid the tree/ Unfix his earthbound roots? Sweet bodements, good!’ Later he falls on his sword because of this overconfidence.
Now consider the case from The Histories of Herodotus. Greeks are warned that Persian king Xerxes is preparing for an unprecedentedly large-scale assault. Athenians send for an advice from the Oracle of Delphi and hear bad news that the land will be destroyed, but they will be granted a wooden wall by Zeus, as protection. They fail to make sense of it, as it does not match their mental models. Here is when Themistocles, the man who is able to see the things from a different perspective, argues that ‘the “wooden wall” meant the fleet and that they should ready themselves to fight by sea.’ As the story goes, the Athenians followed this advice and indeed saved their land because they took advantage and themselves surprised the invaders.
The uncertain future, therefore, is initially neutral. It is up to us actually, whether we turn our knowledge about it, whatever obscured and fragmented, into advantage or fail to prepare and thus end up being caught off guard. As one of the most influential risk authors these days, Nassim Taleb, holds in his Black Swan, ‘the idea that in order to make decision you need to focus on the consequences (which you can know) rather than the predictability (which you can’t know) is the central idea of uncertainty.’ This brings me to our cognitive strategies, those which we engage in making decisions on daily basis. They have direct bearing on the way how Britons will vote at the referendum.
The flows of our reasoning process
Findings of the most recent polls by YouGov  and Ipsos MORI  have confirmed the trend that was in making, at least since the last summer—the share of those willing to leave the EU is consistently increasing at the expense of those willing to stay. There is a variation, though: the former puts the ‘Leave’ camp ahead of the rivals, while the latter narrows the ‘Stay In’ camp’s lead to approximately the same percentage-point gap. There is no contradiction in this; in fact it is something expected in polls, due to randomness of data collection (for example, the British Polling Council’s Inquiry found the variation missing in the polls leading to the 2015 General Elections as their shortcoming). What is much more intriguing is that the trend may turn somewhat misleading and raise the exaggerated expectations. There are psychological factors in play.
Whatever the respondents say in advance, let along in the situation when everything is rather cloudy, is merely an indication, and the indication which is time bound—it reflects what is there right now. This uncertainty also encourages the poll respondents take on gambles much more eagerly than they would do otherwise. In reality, making your choice at the referendum is a much harder task than deciding at the election ballot, and there is high chance that people would tend to play safe on the day, at least for two reasons.
First is that by its nature (once in a generation event and with no third option to choose from) referendum puts huge responsibility for the consequences, on the voters. Even at individual level, normally we know what we are doing but are not in full control of consequences—some of them are unpredictable, or unintended. This spirals to another degree of significance when millions of individuals driven by their personal intentions combine together in one single act, the outcome of which, even if not set in a stone, still will determine the development direction of Britain for decades to come.
Second reason is that people are offered to trade their wellbeing (something they keep dear to their hearts) as it stands at present to the one they aspire for. This requires an individual to be mentally ready, if not eager, for such a change—and this is not our strongest feature: people are resistant to change, they prefer stability over it. This manifests itself in various ways. For example, numerous experiments have proven that we are very reluctant to give up what we posses, irrespectively of what is offered instead (in reasonable proportions, of course). Or, take our strong desire to stick with current state of affairs and endlessly postpone the game changing decision.
Psychologists Daniel Kahneman and Amos Tversky (the former is the Nobel Prize winner in Economics) explain many of these mental habits as influenced, at least partially, by loss aversion.  They claim that loss aversion is inherent to human decision making, deriving from the evolutionary history when people had to treat threats as more urgent task in hand. Moreover, it has been experimentally demonstrated that the pain of loss is twice as strong as the pleasure of gain. Then the wisdom of ‘a bird in the hand worthy two in the bush’ proverb becomes even mathematically proven.
 William Shakespeare, The Tragedies of Shakespeare: Complete Works, Jonathan Bate and Eric Rasmussen, eds. (London: Macmillan, 2007), act 4, sc. 1 [97-107], p.1897
 Herodotus, The Histories, trans. Tom Holland (London: Penguin Books, 2014), bk. 7 [141-144], pp.496-497
 Nassim Nicolas Taleb, The Black Swan: The Impact of the Highly Improbable (London: Allen Lane, 2007), p. 211
 YouGov trackers on the European referendum, available at http://d25d2506sfb94s.cloudfront.net/cumulus_uploads/document/y0omer21fg/YG-Trackers-Europe-Referendum-050216.pdf
 Ipsos MORI database on the EU membership research, available at https://www.ipsos-mori.com/researchpublications/researcharchive/2435/European-Union-membership-trends.aspx
 Daniel Kahneman, Thinking, Fast and Slow (London: Penguin Books, 2012), pp. 282-284