Decision Making Tool: Second-Order Thinking

Learn and practice using Second-Order Thinking with exercises.

What is Second-Order Thinking?

The concept in one sentence:
Consider the long-term implications of your decisions.

The concept in one quote:

There is only one difference between a bad economist and a good one: the bad economist confines himself to the visible effect; the good economist takes into account both the effect that can be seen and those effects that must be foreseen.

Frédéric Bastiat

The benefit of using Second-Order Thinking:
Avoid unintended consequences.


Examples

Example 1

A country decides to prohibit the sale of alcohol to reduce crime and corruption.

Can you think of an unintended consequence?

Answer:
A financial boost to organized crime by providing them with a new business opportunity (illegal alcohol trade).

Generally, prohibition is not completely effective and tends to drive the market underground instead.

Source

Link to the real event:

Prohibition in the United States

Example 2

You decide to give your child pocket money for doing chores.

Can you think of an unintended consequence?

Answer:
It might make them less willing to help around the house for free.


Exercises

Exercise 1

Google decides to hide search results that contain profanity in their titles.

Can you think of an unintended consequence?

Exercise 2

A town decided to make safety helmets mandatory for all bicycle riders.

Can you think of an unintended consequence?

Exercise 3

A country decides to prohibit the sale of drugs to prevent misuse.

Can you think of an unintended consequence?

Exercise 4

An intelligence agency decides to financially support a foreign group of rebels fighting against their country’s dictator.

Can you think of an unintended consequence?

Exercise 5

Passenger-side airbags in motorcars were intended as a safety feature, but led to an increase in child fatalities in the mid-1990s because small children were being hit by airbags that deployed automatically during collisions. The supposed solution to this problem, moving the child seat to the back of the vehicle.

Wikipedia

Can you think of an unintended consequence? (Moving the child seat to the back)

Exercise 6

Malaria is a serious global health issue, killing nearly half a million people every year worldwide. Aid organizations like the Bill and Melinda Gates Foundation have invested in solutions to solve the crisis such as distributing hundreds of thousands of bed nets to protect people from mosquito bites carrying the virus.

ScienceDaily

Can you think of an unintended consequence?

Exercise 7

You decide to be a "team player" and do unpaid overtime for your boss.

Can you think of an unintended consequence?

Exercise 8

The British government, concerned about the number of venomous cobra snakes in Delhi, offered a bounty for every dead cobra.

Can you think of an unintended consequence?


Answers

You might come up with different consequences, and that’s fine!

Answer to Exercise 1:

Legitimate places, people, or things with profanity in their name will be filtered out.

Real-life event:

Scunthorpe problem

The problem was named after an incident in 1996 in which AOL's profanity filter prevented residents of the town of Scunthorpe, Lincolnshire, England, from creating accounts with AOL, because the town's name contains the substring "cunt". In the early 2000s, Google's opt-in SafeSearch filters apparently made the same mistake, preventing people from searching for local businesses or URLs that included Scunthorpe in their names.

Source

Answer to Exercise 2:

A reduction in the number of people cycling due to the helmet law, which could lead to an unhealthy population.

A health-benefit model developed at Macquarie University in Sydney suggests that, while helmet use reduces "the risk of head or brain injury by approximately two-thirds or more", the decrease in exercise caused by reduced cycling as a result of helmet laws is counterproductive in terms of net health.

Source

Answer to Exercise 3:

A financial boost to organized crime by providing them with a new business opportunity (illegal drug trade).

Answer to Exercise 4:

The rebels may switch sides or lead the country inappropriately if they win.

Real-life event:

Examples of blowback include the CIA's financing and support for Afghan insurgents to fight an anti-Communist proxy guerilla war against the USSR in Afghanistan; some of the beneficiaries of this CIA support may have joined al-Qaeda's terrorist campaign against the United States.

Source

Answer to Exercise 5:

An increase in the number of children forgotten in unattended vehicles.

The solution led to an increase in the number of children forgotten in unattended vehicles, some of whom died under extreme temperature conditions.

Source

Answer to Exercise 6:

People may misuse the mosquito nets.

Bill and Melinda Gates Foundation's well-intentioned attempt to save lives by providing insecticidal mosquito nets caused environmental and human destruction, as many of the villagers provided with these mosquito nets decided they were better used as fishing nets, leading to overfishing and similar noxious unintended consequences.

Source

Answer to Exercise 7:

Your boss might come to expect you to do more unpaid overtime.

Answer to Exercise 8:

People in the city may breed cobras in order to keep getting the bounty.

This was a successful strategy as large numbers of snakes were killed for the reward. Eventually, enterprising people began breeding cobras for the income. When the government became aware of this, they scrapped the reward program, causing the cobra breeders to set the now-worthless snakes free. As a result, the wild cobra population further increased. The apparent solution for the problem made the situation even worse, becoming known as the Cobra effect.

Source


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