Pigeons Beat People on Probability Problems
The hardest part of quantitative market research is not that it involves numbers, math, or even statistics, but that it involves complex problems in probability.
Over the past several years, psychologists have been documenting how difficult it is for us humans to solve even “simple” probability problems. One fascinating example is a puzzle known as the Monty Hall dilemma based on the 1960’s game show Let’s Make A Deal. Monty would offer his contestants three doors to choose from, one of which had a valuable prize behind it. After the contestant chose, Monty would open one of the other two doors, deliberately choosing one that had no prize behind it. Then he offered the contestant an option of staying with the original choice, or switching to the other unopened door. Which should the contestant do?
The contestant should always switch. The odds of winning are two-thirds if she switches, and one-third if she stays. Most contestants, however, stay with their original choice, believing that the odds of winning are the same whether they stay or switch. And it turns out that pigeons do a better job solving this puzzle than humans. In an article published last year in the Journal of Comparative Psychology, researchers showed that if a similar game is played with pigeons, they start to catch on and consistently choose to switch, which maximizes their winnings. Humans, however, do not. Not only do we have a hard time grasping the true probabilities conceptually, but even if we play the game over and over, we ignore our experience and learning.
What does this have to do with market research? Well, behind all the numbers, charts, and percentages that we present to our clients, most of our methods and analyses are based on probabilistic reasoning. We calculate the probabilities that our sample statistics represent true population values. We build conjoint or MaxDiff models based on probabilities of certain responses occurring even if we did not measure them directly. We ask respondents to assess the probabilities of their own behavior (“How likely are you to buy?”) and use those to calculate estimates of market potential. We are dealing with layers upon layers of probabilities.
It is no wonder that market research reports can be so impenetrable and difficult to untangle. Behind nearly every chart or table is a probability puzzle, and for most of us there is certainly nothing intuitive about probabilities.
And it is no wonder that many research firms do not even try to go beyond giving you charts, data, and tabulations. But that’s where a firm like Versta Research comes in. We solve two of the most difficult challenges facing research professionals: (1) grasping the complex nature of probabilistic reasoning, which may befuddle even the most accomplished mathematicians, and (2) turning mounds (or crumbs) of data and probabilistic reasoning into an effective and compelling story that you can use and that your clients can understand.
When you need help with either or both of these challenges, call us at (312) 348-6089.
—Joe Hopper, Ph.D.