Over at Steve McIntyre’s, there’s a fascinating discussion going on about the relevance of the hockey stick in the context of the Myles Allen mis-identification of the temperature record in a 2011 conference on Climategate as being the hockey stick issue rather than the paleo-record, Yamal, and “hide the decline” tricks being the central issue.
Allen is in a furor defending himself and his misstep, even going so far as to suggesting Bishop Hill is picking “the least flattering” photos to put in the blog post when in fact it is nothing more than the default thumbnail from YouTube. Even the Communicate 2011 website featuring Allen’s presentation uses the same thumbnail (scroll down). The FAIL on display here is hilarious.
In the middle of all this there’s a new paper which may explain why so many scientists, the IPCC, NGO’s, and governments bet on the hockey stick as the “hot hand” in the climate science card game. The paper has a prescient title:
Why Do People Pay for Useless Advice? Implications of Gambler’s and Hot-Hand Fallacies in False-Expert Setting
by Nattavudh Powdthavee, Yohanes E. Riyanto (May 2012)
So why would I point out a paper on gambling as being relevant to the hockey stick? Because, the hockey stick was in fact a huge gamble on the part of “The Team”. They knew full well the science in it was shonky, but they hedged their bets with techniques (such as Mike’s Nature Trick) that gave a result that they felt sure would be “bought” by the scientific community at large. It was a good gamble at the time, but as Climategate has shown us, it may have been a winning hand with a one time jackpot, but they are losing the card game as the other players slowly realize they have a cheat in their midst.
At the blog “Stumbling and Mumbling” there’s a review of the paper with the headline:
============================================================
The strong demand for charlatans
In the improbable event of ever being invited to give a commencement address, my advice to graduates wanting a lucrative career would be: become a charlatan. There has always been a strong demand for witchdoctors, seers, quacks, pundits, mediums, tipsters and forecasters. A nice new paper by Nattavudh Powdthavee and Yohanes Riyanto shows how quickly such demand arises.
…
The predictions were organized in such a way that after the first toss half the subjects saw an incorrect prediction and half a correct one, after the second toss a quarter saw two correct predictions, and so on. The set-up is similar to Derren Brown’s The System, which gave people randomly-generated tips on horses, with a few people receiving a series of correct tips.
And here’s the thing. Subjects who saw just two correct predictions were 15 percentage points more likely to buy a prediction for the third toss than subjects who got a right and wrong prediction in the earlier rounds. Subjects who saw four successive correct tips were 28 percentage points more likely to buy the prediction for the fifth round.
This tells us that even intelligent and numerate people are quick to misperceive randomness and to pay for an expertise that doesn’t exist; the subjects included students of sciences, engineering and accounting. The authors say:
Observations of a short streak of successful predictions of a truly random event are sufficient to generate a significant belief in the hot hand.
(h/t to Marc Morano for the link)
==============================================================
To me, this sounds exactly like what happened with the Hockey Stick, as it was that “a-ha” moment for many people. IPCC had a “hot hand” and everybody started betting on it. Matt Ridley elucidates on that very issue in the CA comments
Matt Ridley Posted May 28, 2012 at 6:38 AM | Permalink
Far from being an irrelevancy, for me personally, the MBH hockey stick was absolutely vital in first extinguishing my scepticism then fiercely re-igniting it. When I first saw it, I was blown away by the clear evidence of unprecedented climate change, and I immediately told people I was no longer sceptical about climate change, a subject I had not been paying much attention to or writing about at that point, but had expressed some doubts about in print a few years before. That it had been published in Nature was good enough for me at the time. Aha, I thought, a smoking gun.
Then when I came across Steve’s work and realised how full of holes both the method and the data were, and that the IPCC was not interested in listening the criticisms, it made me doubly sceptical about not only paleo-climate data, but climate change theory generally, Nature magazine’s standards and — following the farcical enquiries — the British scientific establishment’s willingness to be bought. The hockey stick was by no means the only thing that caused me to change my mind twice, but it was the most salient.
=================================================================
This paper would seem to explain why so many bet on the shonky science of the Hockey Stick, and why they keep betting on it even though that “hot hand” has disappeared. I loved this part about ‘“the law of small numbers” – i.e. those who believe that a small sample of signals represents the parent population from which it is drawn‘ because it explains Yamal and the cherry picked ten sample set to a fault:
They write in the paper:
There is little economic theory in this area. Rabin (2002) and Rabin and Vayanos (2010) outline a model in which believers of “the law of small numbers” – i.e. those who believe that a small sample of signals represents the parent population from which it is drawn (Tversky & Kahneman, 1971) – will be willing to pay for services by financial analysts after observing randomly occurring streaks of profitable financial performances predicted by these professionals. This fallacious belief in the hot-hand of a financial expert arises as a consequence of the gambler’s fallacy, which is defined as an individual’s tendency to expect outcomes in random sequences to exhibit systematic reversals.
The authors suggest that an investor who believes that the performance of a mutual fund is a combination of the manager’s ability and luck will, at first, underestimate the likelihood that a manager of average ability will exhibit a streak of above- or below-average performance. Following good or bad streaks, however, the investor will revert to overestimate the likelihood that the manager is above or below average, and so in turn will over-infer that the streak of unusual performance will continue (see also Gilovich et al., 1985). The implication of this is that believers of the law of small number will be happy to pay for real-time price information provided by experts, such as stockbrokers or managers of actively-managed funds, even when it is well-documented that actively-managed funds do not outperform their market benchmark on average (see, e.g., Fama, 1991)
The parallels to the bets made on the Hockey Stick, and the continued faith by many that Mann came by his “hot hand” scientifically and the betting was sound are quite plain. It is another example of confirmation bias.
Here’s the paper and abstract:
Why Do People Pay for Useless Advice? Implications of Gambler’s and Hot-Hand Fallacies in False-Expert Setting
by Nattavudh Powdthavee, Yohanes E. Riyanto
(May 2012)
Abstract:
We investigated experimentally whether people can be induced to believe in a non-existent expert, and subsequently pay for what can only be described as transparently useless advice about future chance events. Consistent with the theoretical predictions made by Rabin (2002) and Rabin and Vayanos (2010), we show empirically that the answer is yes and that the size of the error made systematically by people is large.
Text: See Discussion Paper No. 6557 
Discover more from Watts Up With That?
Subscribe to get the latest posts sent to your email.
This stuff is outside my area of scientific expertise. It does fall close in to my philosophy and history background. This kind of thing as been going on since day one of the human experience. Charlatanism is more often then not in the “eye of the beholder” or judge. In hindsight humanity has always paid for and often dearly for advice that has little or no true substance. I will say, knowing full well I will receive the wrath of the believers, all religions are little more then charlatanism, with no foundation in reality except to concentrate power and wealth in a ruling class.
At Dr. Curry’s site I recently asked the question, not entirely rhetorical, “Haven’t you scientists done enough damage?”. This fellow Myles’s resounding answer is “NO!”. Like so many alarmist perverters of science he is just the chap we need and has landed on the world’s stage at the right time. Someone hand him a mic and stand back.
The “Team” enrolled to provide a science figleaf to a derivative styled pyrimad scheme. Carbon Climate Forcing was all about FORCED Carbon Commodity Marketing. Carbon Forcing is part of a trifecta of government funded Carbon science lies. There is no ‘sustainable fuel’ system that can provide more than the initial investment energy, with the exception of direct burning of plant material. Hydrocarbons are a direct result of Earth’s internal fission process where higher order atoms break into the Hydrogen, Carbon and Oxygen ‘elemental’ atoms that form petroleum. AGW, green energy and peak oil are all government funded Faux Science to create Carbon shackles and Carbon chains for humanity. The Team chose the wrong ‘hot hand’.
Athony:
You think this is news?
(shake of head in astonishment)
,
People believed the ‘hockey stick because they wanted to believe it, and some still do.
The ‘hockey stick’ is bunkum. Within the week of its publication I was complaining at its ‘stitching’ together of two dissimilar data sets (although I then did not know that malpractice was conducted to perform ‘Mike’s Nature trick’ to ‘hide the decline). Nobody wanted to know about my objection because they liked what they saw when they looked at the ‘hockey stick’.
Indeed, nobody wanted to query the ‘hockey stick’ because it was useful. It was adopted as the poster-child of the following IPCC Report despite being a single analysis which overthrew existing understanding from climatology, history and archaeology. The ‘hockey stick’ would have been a curiosity which was only mentioned in passing but for the fact that it was useful.
And examination of its validity would not have been a lonely investigation by MacIntyre and McItrick (M&M) but for the fact that all the mainstream ‘climate scientists’ found the ‘hockey stick’ to be useful. Nobody questions what they want to believe.
M&M proved their case so cogently that two investigations commissioned by the US Congress each concluded that M&M were right. So, the IPCC gave the ‘hockey stick’ little prominence in their next Report because because it had become an embarrassment.
But AGW-advocates still cite the ‘hockey stick’ because they want to believe it.
And some think it is news that people wanted to believe the ‘hockey stick’. (shake of head in astonishment, again)
Richard
REPLY: Well then given your illuminated admonishment, its probably best that I stop publishing altogether (especially on holidays like today), and shut down WUWT. We can’t have people astonished that I’m wasting my time precious time (that I could be spending on holiday with my children) with non-news items now can we?
I’m off then. – Anthony
Next, we need to investigate crowd belief in the political rhetoric of campaign speeches. My hunch is that all crowds, no matter their affiliation, are sheeple willing to ride the rails of whatever their pet politician has to say. And I mean ride those rails right through garbage dumps and yet think they smell flowers.
However, this game also takes place in a surreal hall of mirrors universe where the definitions in the rules keep changing: ie the morphing of “global warming” to “climate change” to “extreme climate disruption” etc.
Then there is the retrospective “adjustment” of data…
Must be a successful business model. This casino has taken in $70 billion in the last 4 years.
This is why people will seek out an investment fund which has a couple of lucky quarters, only to lose it all in the next quarter. The average return of actively managed funds is usually lower than index funds. The experts can’t even match a pair of dice. But it won’t stop people from pouring their money into the fund that everybody’s talking about.
There are still Fakegate deniers out there, after Gleick fessed up. The desire to believe is something to behold.
Hmmm,
When does the ‘hot-hand’ of scientific proof show itself? Maybe all ‘proof’ is just a circumstance of a long local run in our very small corner of the universe over our infinitely small slice of eternity.
Hubris works at all levels to make people (all people) believe they know more than they do.
I’ll be amazed if most will understand the implications of this post. It’s far more incisive than any Unabomber picture, and depicts the CAGWers in a most bad light.
Anthony:
I am pleased that you are to spend time with your family on a holiday.
But I fail to understand why you think I implied that you should
In fact, I am a fan of your efforts and of WUWT in particular. But that does not mean I think I should be required to assert that everything on WUWT is worthwhile.
Support includes pointing out when I assess things are less than the worthwhile. Others may disagree and tell me why they think my assessment is wrong. If they do, then my post gives them the opportunity to correct those who share my opinion.
Anyway, if you want me to withdraw from making comments on WUWT then I shall.
Richard
Interesting article. However, I would say the hockey stick falls short of even being a random prediction come true by chance, for the simple reason that the prediction it entails implicitly, has not come true. It would be as if a trader simply showed some algorithms and a back test correlation, and investors believed that it would correctly predict the stock market.
Have a nice time on the beach, Anthony. All work and no play and all that…
This tells us that even intelligent and numerate people are quick to misperceive randomness and to pay for an expertise that doesn’t exist; the subjects included students of sciences, engineering and accounting.
Heh. Somebody needs to notify Ohio State…
Researcher Ellen Peters of Ohio State University said that people who are higher in numeracy and science literacy usually make better decisions in complex technical situations.
http://wattsupwiththat.com/2012/05/27/apathy-over-climate-change-it-isnt-about-science-literacy/#more-64359
Richard I have no idea what your problem is here. Yes we do allready know about the hockey stick, but..
Myles Allen thoughts, etc are most definately new news, as is his comments at Bishop hill
And the rest is current as well.
So, not sure what you problem is.
Myles very recent article, about Will.I.am, article in the Guardian also being part if the new news.
Anthony gives us all a voice against immense odds. I thank him for all of his continued efforts. It is still not clear if the force of darkness will be overcome as the political control of government has reached pervasive heights world wide.
[SNIP: Yes, it really is Off-Topic. Please submit to Tips & Notes. -REP]
I’m with FauxScienceSlayer – it’s all about money; smoke and mirrors are merely the best methods for delivering that money into the intended pockets.
Richard, this post does much more than say that people believed the hockey stick simply because they wanted to.
This post outlines the science that deals with people’s willingness to continue/discontinue their beliefs based on contrary/supporting evidence.
How on earth did you not realize this?
The Hockey Stick should be compared to market manipulation by the Big Banks, not the seemingly prescient guesses of a fund manager for a couple of quarters.
Both market manipulation and global warming have the same outcome – the little guy is screwed.
PS: Thanks Anthony – WUWT is the little guy’s fight back manual!
The shallowness of the man astounded me. Many significant points were raised by BH commenters.
Instead of responding to them, he compained that BH had not selected a flattering photo, complained that some commenters had been rude about him, and then flounced off like a prima ballerina who had discovered a hole in her tights.
Dennis Nikols says:
May 28, 2012 at 8:23 am
…It does fall close in to my philosophy and history background. This kind of thing as been going on since day one of the human experience. Charlatanism is more often then not in the “eye of the beholder” or judge. In hindsight humanity has always paid for and often dearly for advice that has little or no true substance. I will say, knowing full well I will receive the wrath of the believers, all religions are little more then charlatanism, with no foundation in reality except to concentrate power and wealth in a ruling class….
___________________________________________
That always reminds me of this song.
video: http://www.youtube.com/watch?v=QrARHJE9Las
@ur momisugly Richard Courtney
For goodness sake calm down. Just because you’ve read something presented here you don’t like or consider it not worthwhile, doesn’t mean you have to rant on about it? I for one thought the paper was worth looking at and added to my knowledge?
Some people like Marmite some detest the taste, neither are wrong 🙂
As regards to Myles Allen he “worked” for UNEP that for me says it all.
Pamela Gray says:
May 28, 2012 at 8:51 am
…My hunch is that all crowds, no matter their affiliation, are sheeple willing to ride the rails of whatever their pet politician has to say. And I mean ride those rails right through garbage dumps and yet think they smell flowers.
_______________________________________
I have often wonder how many people are individuals/leaders and how many are only followers. I saw a comment once in a book of fiction, that only one man in 200 was a born leader. In prison of war camps, this person was singled out and broken so the typical followers would never be any trouble there after.
I have never been able to verify the truth of that snippet but it sure sounds about right.
Dan Gardner’s book “Future Babble” is chock full of excellent examples and quotes on precisely this topic. He starts off his Chapter 8 with the following quote that describes perfectly what the hockey stick was for the IPCC-
“The Commanding General is well aware the forecasts are no good. However, he needs them for planning purposes.”
Gardner quoted Kenneth Arrow, Nobel economist, who described a response he received during WWII when he and a colleague demonstrated that the long-term weather forecasts were useless.