Are the Greeks the best decision-makers in Europe?

The FT recently reported that Greece’s suicide rate jumped 35% between 2010 and 2012, mostly due to older men and women. Unemployment is 26%, the highest in Europe. (Under 25 it is 40%.) 100,000 young people have gone abroad, which a lot in a country of 11 million with only 1 million between ages 15 and 25. Deaths exceed births by a wide margin. (11 deaths for every 8.8 births)

Clearly, the Greeks are not as happy and optimistic as they might be. But are they realistic?

When I work out at the gym, I like to listen to philosophy podcasts in order to get a good rhythm going. I download them from iTunes. (It’s interesting that philosophy podcasts seem to reflect national traits: Philosophy Bites out of the UK is eclectic while The History of Philosophy Without any Gaps out of Munich, now running at over 200 lectures, is massive and systematic. On the other hand, The Philosopher’s Zone from Australia is fun-filled and whimsical. (A recent Aussie episode dealt with the moral issues raised by Buffy the Vampire Slayer and the problem of evil. The philosophy department at Marquette University in Chicago apparently publishes a journal on the philosophical issues in the “Buffiverse.”)

Recently at the gym I was listening to Philosophy Bites and a philosophy prof at the University of Birmingham named Lisa Bortolotti (educated at Alma Mater Studiorum (Bologna), Kings College London, Oxford, Nat. Univ. of Australia), whose field is rationality.

She said that the untrained individual is bad at making rational judgments.

She cited the famous “Linda Problem” of Tversky and Kahneman:

Linda is 31 years old, single, outspoken, and very bright. She majored in philosophy. As a student, she was deeply concerned with issues of discrimination and social justice, and also participated in anti-nuclear demonstrations.

Which is more probable?

1. Linda is a bank teller.

2. Linda is a bank teller and is active in the feminist movement.

The great majority of people chose the second item as the more probable, while it is the first that is correct. (The probability of two things occurring in conjunction is always less than that of one of them occurring alone.) (How did you do? Everyone I have asked got it wrong.)

She also made the following interesting points:

1. Decisions are generally worse when we are told in advance that we will have to explain our reasons.

2. We assign higher probability to desired outcomes than is warranted by the facts.

3. The higher our self-esteem, the worse our forecasting ability.

4. Pessimists, especially those with low self-esteem bordering on clinical depression, make the best assessments of future probabilities.

Points 3 and 4 are important. One may conclude that the Greeks are being more realistic than other Eurozone members in their negotiations, which the Greeks believe to be futile.

More importantly, should we only listen to Greek forecasters?