I listened to a podcast recently on word aversion. The most common example is the “c” word, which is probably why it’s classed as swearing. But according to that podcast, topping the list of words that make us cringe is “moist”.

Personally, I take issue with the words “juicy”, “crud”, and “canker”. I also dislike “crack”, “cranny”, “carbuncle”, “bunion”, “tit” and “sphincter”. And I got all kinds of uncomfortable writing that list.

But before I start talking about how crazy it is that we would have such emotional reactions to these almost random collections of vowels and consonants, let me back up a bit and talk about how irrational we are at making decisions about money/investments/careers/life-in-general.

The Art of “Good” Decision-Making

When it comes to making the big choices, there’s probably no such thing as a “good” or a “bad” decision. Those judgmental adjectives are unhelpful here, because they require omniscience and prophetic insight about consequences – and who can really know what will happen?

Instead, we are stuck making probabilistic guesses about the outcomes. So we can talk about our decisions as being “reasoned” and “well-informed”. Or “emotional” and “misguided”.

And it’s at this point that you run up against the problem of prejudice. Because in the same way that we have prejudices against random collections of vowels and consonants, we are biased against all kinds of things. Or, to put it more kindly perhaps, we have preferences in favour of some things over other things.

Sometimes, those preferences/prejudices are justified and helpful. At other times, they are not. And the real question is: how can you tell the difference? Especially when it’s important, like when you’re making one of the big life choices…

Back to the Emotive Words

There is a philosophical viewpoint which sees language as the outward expression of one’s internalised culture. That is: I don’t really “speak” English. I am English, and my Englishness is expressed through the language I speak. So I perceive the world in pictures, I form thought in pictures, and there is no thought barrier between pictures and words:


One implication of this process is that I will find it hard to speak French because my English self has to take its natural expression and then divert it through an analytical translation process:


So the question is: would thinking about decisions in a foreign tongue make one more rational?

After all, something like my word aversion has been built up over a lifetime of experiences. But where foreign words are concerned, it should be like virgin snow, unsullied by the associations of my past. And perhaps something similar would apply to a thought process if it takes place in a non-mother tongue?

The Foreign Language Effect

Clever people from the University of Chicago tested this in 2011, by asking whether the loss aversion bias would be as strong if someone was forced to articulate their decision-making in a foreign language.

To start off, here is the standard experiment for demonstrating that we’re guilty of a loss aversion bias:

  1. You present two samples of people with that same scenario, framed in one of two ways:
    1. The first group hears the following: “Doctors are fighting a disease that could kill 600,000 people. They can focus their attention on Medicine A, which is guaranteed to save 200,000 lives; or Medicine B, with has a 33.3% chance of saving all 600,000 lives, and a 66.67% chance of saving no lives at all. Which would you get them to focus on?” Let’s call this the “Gains” option.
    2. The second group hears: “Doctors are fighting a disease that could kill 600,000 people. They can focus their attention on Medicine A, which will result 400,000 people dying; or Medicine B, with has a 33.3% chance of saving all 600,000 lives, and a 66.67% chance of saving no lives at all. Which would you get them to focus on?” And this will be the “Losses” option.
  2. The scenarios have identical outcomes. And actually, the choices within each option are the same (a 33.33% chance of saving 600,000 lives is “the same” as saying that only a third of the 600,000 [ie. 200,000] will live).
  3. However, scenario B phrases the outcome in terms of lives lost.
  4. If we weren’t loss averse, you would expect the results for both groups to be the same.
  5. In reality, people in the first group are more likely to choose Medicine A, and save a guaranteed 200,000 lives; where people in the second group are more likely to choose the all-or-nothing Medicine B.
  6. The framing of a scenario in terms of losses is seemingly emotive enough to change the way that we make decisions about risk.

So to see if foreign language had any impact on this bias, the experimenters gave the scenarios to a group of Americans (group a) that had learned Japanese as a second language (some were asked to think about the scenario in English, others in Japanese); as well as giving the scenarios to a group of Koreans (group b) that had learned English as a second language (again, some were asked to think about the scenarios in Korean, others in English).

Here are the results:

What you are looking at is the percentage of people that chose Medicine A (to save a safe 200,000 people) in each scenario (“framed as gains” and “framed as losses”) and in each language.

What is clear: in your home tongue, your choice will change depending on the way that the question is framed.

What else is clear: in a foreign tongue, your choice will be consistent. Meaning that the act of translation removes the bias from your thought process.

So it seems that we all need to take a leaf out of Eat Pray Love and learn to speak italian: because when you’re making a big decision that feels foreign to you, it’s apparently best to keep the whole thing as foreign as possible.

Isn’t that amazing?

I was amazed.

Happy Tuesday.

Rolling Alpha posts about finance, economics, and sometimes stuff that is only quite loosely related. Follow me on Twitter @RollingAlpha, or like my page on Facebook at www.facebook.com/rollingalpha. Or both.