Galileo and the Oscars

Remember those award ceremonies where the person on stage reads out the winner after opening an envelope? In 2016, at the Oscars, the winner of the best movie was called out wrongly on stage… and to millions on TV.

 

Tim Harford’s podcast explores how that happened. Far more importantly (and scarily), it cites the same pattern to be behind other far more disastrous events. And to top it off, that pattern had been pointed out by good old Galileo!

 

So what led to the Oscars gaffe? The Best Movie envelope had the name of a movie and an actress. Why the actress name? Because it was the wrong envelope! But wait, there’s more. The previous award had been for the Best Actress: this envelope was for that category. Wait a minute, wouldn’t the previous award not have been called out wrongly in that case? Aha, they kept duplicates of each envelope. It was the wrong duplicate that had been handed on stage. But why did they keep duplicates? As a safety measure, as a backup system.

 

See how complicated it was? Duplicate envelopes as backup. The copy read on stage disposed by the announcer, the backup disposed by someone backstage. The backups got misaligned with the onstage ones, and we had the gaffe.

 

Galileo had warned centuries earlier that as we add more and more layers to avoid disaster, sometimes those very layers then introduce new risks! Further, over time, especially for complex topics, those safety layers may get inadvertently stacked like dominos: if one falls, all the others start falling. And then the dominos start falling so fast that there’s no time to react.

 

Harford cites the Three Mile Island nuclear accident as another example of this. The control room had a gazillion pieces of info displayed. Lights next to many of them would glow to indicate status. Unfortunately, since they’d been developed by different vendors and at different times, there was no standardization. Did green mean a valve was open or closed? The overall effect was thus dizzying and incomprehensible info, a disaster waiting to happen. The safety layer of lights on top of status info had created confusion.

 

Or take the more recent 2008 financial crisis. AIG had insured most of the top Wall Street firms for a ludicrous sum of $2.7 trillion. Yes, that’s trillion with a “t”! There was no way it could ever pay that much. On the other hand, the insured firms thought they had a safety net: insurance with AIG. But as firms started to go belly up, it became clear that AIG could not pay out all of them. This in turn made the still solvent firms realize they weren’t insured anymore! And so they started selling. With everyone selling, prices nosedived. This drove yet more firms into bankruptcy. Insurance was a safety layer, but it then encouraged firms to take more risks because, hey, they were insured. Until they weren’t.

 

And to think Galileo had noticed this pattern centuries back…

Comments

Post a Comment

Popular posts from this blog

Student of the Year

Image
As a toddler, my daughter loved Alia Bhatt’s songs, esp. the ones from Student of the Year . (That movie did have many good songs and well-choreographed dances). Fast forward to present day, when she is 12 yo. She rarely watches Hindi movies now, but one of the few ones she likes of late, Raja aur Rani ki Prem Kahani has, yes, Alia Bhatt.   If I had any hopes that there was anything to be read in the name of her toddler-time favorite ( Student of the Year ), they have been dashed. Our conversations come exam time are perfectly captured by this photo and its caption: In fact, the pic below captures how she and I look at her answer sheets – me intently, she with an expression of “It’s over, so why are you even looking at it?”   Of late, we pull her leg and tell her that she isn’t showing any signs of academic prowess, she’d better find a rich guy to marry. Some time later, she showed us this meme on the Internet: “Me No Study, Me No Care Me Go Marry Millionaire If He Die
Read more

Why we Deceive Ourselves

In their book, The Elephant in the Brain , the authors describe this weird aspect of deception that we practice: deceiving ourselves! That is so weird: “If our minds contain maps of our worlds, what good comes from having an inaccurate version of these maps?” The Sigmund Freud school of thought treats self-deception as a defense mechanism, “a way for the ego to protect itself”. The mind seeks to protect itself from anxiety and other negative emotions. Many object to this reasoning: since accurate information is so critical to our survival, surely distorting information would be dangerous. Wouldn’t the goal of protecting our self-esteem have been better achieved by making the brain’s self-esteem mechanism stronger instead? The new school of thought explains self-deception as “primarily outward-facing, manipulative, and ultimately self-serving”. This is based on Thomas Schelling’s work on game theory: “In a variety of scenarios, limiting or sabotaging yourself is the winn
Read more

Handling of the Satyam Scam

The Satyam scam. How does that fit into Montek Singh Ahluwalia’s book on reforms in India, Backstage ? The reason is that, as both NASSCOM and the government of India felt: “(Satyam’s) collapse would create a great deal of disruption for clients worldwide and seriously damage India’s reputation as a reliable source of software services.”   Therefore, the government decided to work with the private sector to “organize a quick takeover by a reputable new buyer, who would quickly restart the company”. But that could not be done overnight. In the meantime, the new board would have to reach out to Satyam’s clients and “reassure them that the company would survive”.   For the new board to have credibility when it made that statement, it had to be staffed with people who understood the private sector, the IT sector in particular, and commanded respect and trust. Deepak Parikh from HDFC was made chairman, and other members of the board included a former NASSCOM chairman, CII member,
Read more