Why Leaders Overreact
“It’s easy to second-guess decision makers when you don’t have to live with the consequences of the decision. These decisions are not something you get to do over again if you turn out to be wrong.”
When we make a determination about risk based on incomplete information, two kinds of error can occur. In Type I errors, we characterize a situation as active, significant or dangerous when it really isn’t. In Type II errors, we characterize a situation as calm, insignificant and safe when it really isn’t. Leaders who don’t want to lose their positions are more inclined to make Type I errors because the personal cost to politicians for Type II errors is more severe. Type I politicians who sound the alarm about danger in safe situations can always retreat to the position that they were simply being careful or cautious, or make vague references to secret evidence that the circumstances were actually more dire than the public knows. But Type II politicians who reassure their constituents that they are safe shortly before some of their constituents are harmed will be forever hounded by the media and the public for not knowing better. They’ll lose their office, their power, their reputation. They might even get sued. From a self-centered point of view, it almost always pays for public officials to follow the Type I path and overreact to dangers.
The problem with an overemphasis on Type I decision-making is that there are costs beyond the fate of any single politician. Security and defense budgets drain us of billions of dollars every day at the federal, state and local level to combat miniscule risks, billions of dollars that could build schools, find cures for deadly diseases, or otherwise help suffering people. Hype-provoked fear among members of the public leads to rejection of outsiders and reinforcement of biases that, paradoxically, keep us from making peace with others in the world. Our leaders may conclude it personally prudent to habitually press the panic button, but if the public kept them accountable for more subtle damage, they might come to a different conclusion entirely.