Machiavelli & Prospect Theory

Machiavelli 

There is this quote in his book (The Prince) , which influenced me a lot. 

"The only way to appear generous is to be mean. Then your occasional acts of generosity will be remembered. If you try to be generous all the time, people will remember only your occasional acts of meanness." 

I believe in this ( which also states that I am highly likely to be biased in favor of his views too ). 

Prospect theory 

This theory was authored by Daniel Kahneman & Amos Tversky. 

I'll take two concepts from this theory, which are Possibility effect & Certainty effect. Consider the following gamble: (directly take from the book)

In the four examples below, your chances of receiving $1 million improve by 5%.  Is  the  news equally   good  in  each case?

A.   From  0  t o  5%

B.   From  5%  t o  10%

C.   From  60%  t o  65%

D.   From  95%  t o  100%

In each case, the prediction increases with the same 5%. That means the expected value of the utility has to be the same. But almost everyone agree that Case A ( from 0% to 5%) & Case D ( 95% to 100%) are more impressive. 

The large impact of 0% --> 5% illustrates possibility effect, and the other illustrates certainty effect.

This means that we give more weight to low probability events, such as this ONLY 5%. 

For example ( In perspective of boys) : Lets see this as a gamble and nothing more, a boy approaches the girl whom he's interested in,

and consider these two independent scenarios. 

Case A : The girl rejects him then and there itself. (Check-mate)

Case B : The girl (out of her empathy) responds smilingly though not promisingly. 

Case A suggests the probability of 0% likely, and Case B suggests the less probability ( say 5%). The mere transition from nil to small probability causes possibility effect, which in turn makes the boy filled with LARGE HOPE. 

Conclusion of possibility effect : We misjudge the events of less probability which are likely to yield a large outcome ( in the above example, girl loving back).

Machiavelli & Prospect theory

You've seen the negative part of possibility effect. Now consider the following which is somewhat positive.

Read that quote again. And I am sure that some of you guys might have thought that quote is bad or dictating evil. I entirely disbelieve such opinion. 

And I think Prospect theory provides psychological proof for that quote. Consider a following example: You have a complex question and you are looking for an answer, and you know that  only two persons can answer that. Mr. X and Miss. Y. 

Mr. X is consistent wit you, generous with you all the time and less likely that he can solve the problem.

Miss Y on the other hand is not generous with you all the time, but when needed she solved your problem in the past and provided good advice. This states very high outcome with very less probability. 

With the possibility effect, you tend to approach Miss Y. (Who is of directly opposite of nature what you believe in - generous all the time)

Example breakdown :

What happens exactly? 

When you face this choice that whom to approach, your mind starts recollecting the past history and data. In the case of Miss. Y, the rare events such as written above helping or solving the problem in the past with using her intellect and advice comes to mind very quickly if that event is vivid enough. This makes you assigning more weight in the choice to approach Miss. Y. 

This is what Machiavelli conveyed for future leaders: Be generous only few times but you should do those generous acts in such a way that people will have a vivid memory. 

P S : If those events are not vivid enough to be recalled , then you may favor Mr. X because of constant impressions he created. 

P P S : The writing style was predominantly made this way to create vividness. (And it is inspired from my professor) 

Thanks for reading. 

Boiling frog syndrome

If you take a frog near a bowl of water which is at boiling temperature, it flees off. It won't come even near to it. 

But if you place the same frog in a bowl of water at a room temperature and starts boiling on slow flame. It won't come out. It starts adapting to its surroundings and finally it dies. 

Watch this video:Link

In professor's words: "...And so, imagine that everyday I consume 100 calories more than I expend. Will I look fatter the next day? Of course not. Not even the day after or the week after. Will I?

But if you saw me after an year, you’d notice that I have gained some weight. And if you saw me after 3 years, you’ll notice that I am obese. But if you saw me every day, you won’t notice that I gone from being fit to being obese in 3 years.......

I can assure you that there is no truth whatever in this story, but the human equivalent of the boiling frog is there in all of us. Cognition, misled by tiny changes involving low contrast, will often miss a trend that is destiny.

But this is all negative way of seeing this. There is a positive way too. Consider yourself as a Frog and you can manipulate yourself with this effect. 

Suppose you want to have a habit, a good habit for example reading books. Start with tiny little increments, first week you will read few pages. And next you'll read some more, and next some more. I hope you are getting the powerful idea behind this. 

“A journey of a thousand miles must begin with the first step.”

“When you improve a little each day, eventually big things occur. When you improve conditioning a little each day; eventually you have a big improvement in conditioning. Not tomorrow, not the next day; but eventually a big gain is made. Don’t look for the big, quick improvement. Seek the small improvement one day at a time. That’s the only way it happens-and when it happens, it lasts.” -John Wooden, one of the most successful coaches in the history of college basketball

All changes, even positive ones, are scary. Attempts to reach goals through radical or revolutionary means often fail because they heighten fear. But the small steps disarm the brain’s fear response, stimulating rational thought and creative play.

                                                                      

Machiavellian thinking

"Morality is how do you want the world to be. And Economics shows you how the world actually works."- Steven Levitt in his book Freakonomics.

"...that he who neglects what is done for what ought to be done, sooner effects his ruin than his preservation" -Niccolo Machiavelli.


I've started reading The prince right after Freakonomics. Freakonomics is a very good book on incentives and its effects on people. In brief there are three types of incentives (1) Moral (2) Social (3) Economic.

The prince by Niccolo Machiavelli influenced my thinking.

On Law of higher goodness:

The very reason why I started this book is to get to know about this principle. In simple words you can be some what cruel to be more kind or to do some higher good. And it is practically true that your good virtue for majority may seem harmful to others. The whole book states this. That to achieve a higher virtue you can do some wrongs or mean acts. Surely, you can't be virtuous or good all the time because there aren't many good ones around you.

On Morality:

He proposes one should be practical more. That is to think of the consequences which are about to occur with what you choose to be. It is you can choose to  be either cruel or generous.

"The only way to appear generous is to be mean. Then your occasional acts of generosity will be remembered. If you try to be generous all the time, people will remember only your occasional acts of meanness."

How come? I asked myself. Being generous all the time is not good for oneself?

Suppose that you are very generous all the time and you are avoiding any act of meanness. Then in the mean time, you'll encounter to do something which seems good for you but may seem harmful for others. This makes them to hate you. And they will remember this.

With availability bias, people will give over weight to the experiences which are readily available to their memory.

You are trying to be good. But all people are not good. There are wicked men who'll do harm or who'll exploit your goodness.


On Risk: 

“All courses of action are risky, so prudence is not in avoiding danger (it's impossible), but calculating risk and acting decisively. Make mistakes of ambition and not mistakes of sloth. Develop the strength to do bold things, not the strength to suffer.”

This is a good concept that one should ponder. You have to calculate the risks and choose the least possible risky act or situation.


On Religion:

Before this the worth noting fact is that one should be bound by laws. It is either ministers or people. Because you have to consider that all men are wicked in nature.

"THEY WHO LAY the foundations of a State and furnish it with laws must, as is shown by all who have treated of civil government, and by examples of which history is full, assume that ‘all men are bad, and will always, when they have free field, give loose to their evil inclinations;

and that if these for a while remain hidden, it is owing to some secret cause, which, from our having no contrary experience, we do not recognize at once, but which is afterwards revealed by Time, of whom we speak as the father of all truth."

I've learnt some good things about religion.

The first one is that the religion's image must be preserved to keep a kingdom away from disorders. He quoted one example about pagan religion that the views or sayings of the religious elders were seem corrupted with will power of the generals or rulers after some time. And the people started disbelieving it.

So, it is much more important that law is enacted for both the rulers as well as people. But the author says that wrongs committed by people prove less costly when compared to wrongs or selfish acts committed by rulers.

And the second point is about the fight for freedom question. The question is why people are not fighting for liberty as the ancient people used to be. His opinion is that the answer lies in the difference in education and the difference in religion that comes from it.

The present religion made men to be more soft than that of ancient ones. In pagan culture worldly honor is sought after. It teaches to be fierce and brave, as is evident from their rituals or practices. But in the present day it teaches the courage in a way how many blows you can take.


On Love & Fear:

“It is best to be both feared and loved; however, if one cannot be both it is better to be feared than loved.”  

First there is a slight difference between Feared and Hated. Some rulers were feared but not hated. And there are rulers who commanded people for more period of time with LOVE. As it is evident from the quote that it is to be feared than loved, one can readily say that the author is cruel or evil. But immediately he says this.

"He who seeks to deceive will always find someone who will allow himself to be deceived.”

This again will make you read the first quote in this notes. About being generous in few situations.

On Prudence:

“A prudent man should always follow in the path trodden by great men and imitate those who are most excellent, so that if he does not attain to their greatness, at any rate he will get some tinge of it.”  

And he also said that not to worry that you can't accomplish what others have achieved. He states that all the men are born, live and die in quite a same way.  

“Whosoever desires constant success must change his conduct with the times.”  

And John Maynard Keynes puts it  "I'll change my opinions when the facts change, what do you do Sir?"


Overall :

He didn't state any ideals in this book. He stated how one should not to be. That's the important part. To become smart one should avoid being dumb first. And his practical thinking says that what ever you do you've to think about the consequences , considering how the world actually works not with your own morale code. 

And one has to act or change with times, when the facts change.