At nearly every conference speech on behavioral psychology I’ve seen over the past decade or so the speaker will invariably ask the audience, “By a show of hands — how many of you think you’re an above average driver?”
Of course around 90% of the hands in the room go up and the speaker will make a Lake Wobegone reference to show how everyone assumes they’re above average (I would argue that roughly 80% of people on the road are horrible drivers while half of that number is probably due to people texting while driving but I digress).
I never thought much about the intersection of driving, traffic, distraction, and behavioral psychology all that much until I read Traffic: Why We Drive the Way We Do (And What It Says About Us) by Tom Vanderbilt.
This book was full of studies and anecdotes that apply beyond the driver’s seat.
For instance, getting behind the wheel has the ability to transform us into one of the worst versions of ourselves:
The more interesting question is not whether some of us are more prone to act like homicidal maniacs once we get behind the wheel but why we all act differently. What is going on seems to have less to do with a change in personality than with a change in our entire being. In traffic, we struggle to stay human.
Hand up — I’m guilty of this one. There are things I’ve said in the comfort of my own car to others on the road I’m not proud of. It’s crazy how easy its to let your emotions take over in situations like this where you act in a way you never would under a different set of circumstances.
The more I look the more I tend to see the loss aversion phenomenon outside of the markets. Traffic is no different than investing in some ways:
Traffic, for reasons I will later explain, tends to act like an accordion: As traffic slows in a jam, it compresses; as congestion eases, the accordion “opens” and cars begin to speed up. Because of the uneven nature of stop-and-go traffic, these shifts happen in different lanes at different times. A driver in a temporarily opening lane may very quickly pass a cluster of compressing cars in the next lane. But then he will find himself in the compressing lane. And what happens? He spends more time watching those vehicles zip by in the next lane. To make matters worse, the researchers found that the closer a driver drove to the car in front of him, and the more glances he made to the next lane, the worse the illusion seemed.
This is me in a traffic jam as well. The grass always seems greener in the other lane. It seems like the harder you try in these situations the worse the outcomes. Staying put is usually the best response but our brains don’t respond well to patience. One study found that around 10% of all car crashes occur from people changing lanes.
Loss aversion on the road could be chalked up to what we focus on when driving:
Something else might also be helping to create the illusion. Drivers spend most of their time—anywhere from 80 percent to over 90 percent, studies have found—looking at the forward roadway. This includes, of course, the adjacent lane; estimates are that for every two glances we make at our own lane, we make one glance at the next lane—simply so we can actually stay in our lane. This means we are highly aware of vehicles passing us. We spend only about 6 percent of our driving time looking in the rearview mirror. In other words, we’re much more aware of what is passing us than what we have passed.
Thinking in relative terms as opposed to absolutes can drive you insane.
In one study, researchers asked subjects if they would rather live in a place where they had an income of $50,000, but the average person had an income of $25,000 or one where they have an income of $100,000 in a place where the average income was $200,000, all else equal. More than half of the respondents preferred the $50k scenario where they would rather make more than their neighbors but less overall.
Comedian Jay Mohr did a bit a number of years ago about being stuck in a huge traffic jam. It went something like this: Have you ever thought to yourself in the midst of a traffic jam: There better be an accident up there or this is ridiculous.
It turns out studies show unexplained waits feel much longer than explained waits:
Hence our frustration when we find no “cause” for a traffic jam. If we know there is an accident or construction, the delay is easier to process.
Our brains find it easier to process situations where there’s a clear explanation. Not knowing what’s happening or, more importantly, why it’s happening, makes people extremely uncomfortable.
Being uncomfortable with uncertainty is one of the reasons a long commute can make people unhappy:
As Harvard University psychologist Daniel Gilbert argues, “You can’t adapt to commuting, because it’s entirely unpredictable. Driving in traffic is a different kind of hell every day.”
The unpredictable nature of the markets is one of the reasons they can be so maddening. Trying to be right all the time when investing can also be a different kind of hell every day.
Patience is a great equalizer in the markets so it can be helpful to understand why waiting weighs so heavily on our psyche:
David Maister, an expert in “the psychology of queuing,” has come up with a series of propositions about waiting in line. Strikingly, they all seem to hold true for traffic. Take proposition no. 1: “Unoccupied time feels longer than occupied time.” This is why grocery stores put magazines near the cashiers, and why we listen to radios or talk on cell phones in our cars. Or proposition no. 3: “Anxiety makes waits seem longer.” Ever been stuck in traffic on your way to an important meeting or when you were low on gas?
This book made me think and that’s good enough for a recommendation for any non-fiction book I’ve read: