Correlation vs Causation: Why Your Lucky Socks Don’t Win Games
Unravel correlation vs causation with funny examples like lucky socks and shark attacks. Master this mental trap today!
"We are pattern seekers, believers in a coherent world, in which regularities appear not by accident but as a result of mechanical causality or of someone's intention."
– Daniel Kahneman, Thinking, Fast and Slow
Thinking, Fast and Slow has been a life changing read that has reshaped my understanding in profound ways. Having delved into its pages multiple times, both through reading and listening on Audible, I've found that writing about its concepts helps solidify my comprehension. Thus, I am embarking on a series of blogs to explore some of the mental delusions explained in the book.
Our exploration of the quirks of an irrational mind began with The Halo Effect, explaining how the effects of first impressions and recency can lead to errors in impressions and decision making. A single dazzling trait—like a company’s culture marketing or an employees presentation skills —can fool us into seeing brilliance in everything they do.
Next let’s look at The Delusion of Correlation and Causality, where we’ll unravel why our brains love to stitch events into neat little cause-and-effect stories—even when the thread doesn’t hold. Buckle up, because this one’s a wild ride.
Imagine you’re at a company retreat, nursing a lukewarm coffee, when the big boss takes the stage. “Last quarter, sales soared by 20%!” they proclaim. Applause erupts. Then, pointing to the sleek new open-plan office, they add, “Proof that tearing down those walls sparked creativity and productivity!” Everyone nods—obvious, right? Open spaces mean collaboration, collaboration means sales. Done deal. Change of culture leads to higher profitability!
But what if sales were already climbing before the walls came down? Or if a market boom lifted the whole industry? Suddenly, that airtight story looks more like a house of cards. This is the Delusion of Correlation and Causality: seeing two things happen together and assuming one caused the other. Spoiler: Success is never that simple to have a simple cause and effect, and there is always an element of luck!
In this post, we’ll dig into why our minds leap to these conclusions, how it messes with everything from boardroom decisions to your lucky socks, and why we’re convinced we’re rational when we’re not. With a nod to Thinking, Fast and Slow, we’ll spotlight the tug-of-war between our fast, intuitive System 1 and our slow, skeptical System 2. So, let’s dive in.
Meet Your Brain’s Overeager Detective
Think of your brain as a detective duo: System 1, the quick-draw sleuth who spins a story faster (gut feeling) than you can say “case closed,” and System 2, the plodding analyst (reasoning) who double-checks the evidence. System 1 sees the CEO in flip-flops on a profit-spiking day and declares, “Flip-flops are the key!” System 2 sighs, “Really? Let’s see the numbers.”
System 1 thrives on speed and coherence, connecting dots into tidy tales. It spots the office redesign and sales jump and shouts, “Cause and effect!” System 2, though, is the buzzkill—it’s cautious and data-driven but often too lazy to intervene. So, System 1 runs the show, making us suckers for mistaking correlation (things happening together) for causation (one causing the other). It’s not dumb—it’s just our brain’s wiring favoring quick patterns over slow scrutiny. Spoiler - everyone does it!
The Delusion in Action
Let’s watch this delusion wreak havoc across different arenas, with some new examples and deeper dives to show how pervasive it is—and how we all think we’re rational while System 1 steers the ship.
In Business
A tech startup believes its office perks—ping-pong tables, nap pods, and free beer and pizza—boosted profits last year. The CEO boasts on LinkedIn, saying these perks drive success. But what if a new product launch was the real reason? Or maybe a competitor's failure helped them? WeWork had all the culture in the world, but it tanked. One the other side none of the Elon Musk’s companies talk about culture as above – from what I read on social media; the culture is all about hard work. Our quick-thinking System 1 prefers the simple story of perks leading to profits. System 2, which thinks more slowly, might suggest checking the timeline, but it's often ignored.
Imagine a retailer sees a sales drop after a website redesign. The team blames the new layout and reverts it. When sales bounce back, they feel validated. It seems logical, right? But what if a seasonal slump affected sales during the redesign, and the recovery was just a coincidence? System 1 easily blames the redesign, liking the clear narrative. System 2, on the other hand, might consider market trends or customer moods, but it doesn't always get the attention it deserves. The UI/UX matters but is not the singular reason for a product success.
In Everyday Life
We humans love spotting patterns even when they’re not really there and it’s honestly kind of hilarious how far we take it and how good marketing exploits it using persuasion techniques.
Imagine you’re gearing up for a big game and you pull on your “lucky” socks—those goofy ones with little stars stitched all over them. Your team crushes it and you’re thinking these socks are basically enchanted. Next game same socks another win—now you’re naming them like they’re pets and fretting that a spin in the washing machine might scrub the magic right out. Truth is your team’s just on a hot streak or maybe the other side forgot their coffee that morning—those socks are just threads not talismans.
Picture a farmer out in a dusty field desperate for rain so he starts flailing around in this ridiculous dance— a classic scenario in Bollywood movies. Lo and behold the next day the sky opens up and he’s strutting around crowing about his weather-controlling powers. Really the clouds were already brewing …
Or say you’re having one of those days where everything goes wrong—you spill your coffee trip over the cat miss the bus—and then you glance up at a glowing full moon. Suddenly it’s the moon’s fault like it’s up there plotting your misery so you shake your fist at it muttering about lunar conspiracies. Bad days happen moon or no moon but that big shiny orb makes a convenient scapegoat.
We’re so quick to connect the dots and feel brilliant about it when half the time our brains are just making up stories for fun.
In Science and Society
Sometimes, we tend to see connections where there aren't any, and this habit can extend beyond personal quirks to affect whole groups. Imagine a scorching summer day with people lounging on the beach, enjoying their ice cream cones. Suddenly, someone spots a shark fin in the water and wonders if the sprinkles on their ice cream attracted the shark. It’s tempting to think that the ice cream signaled the shark, but in reality, it's simply more people swimming due to the heat, and sharks couldn't care less about ice cream.
Consider a massive fire engulfing a warehouse, with dozens of firefighters rushing in to extinguish the flames. Someone might humorously suggest that more firefighters cause more damage and propose reducing the number next time. People’s system 1 might believe this simple story but the idea is laughable because big fires require large crews, and the damage is caused by the fire, not the firefighters.
Then there's the old umbrella trick: you carry an umbrella on a sunny day, feeling smug when no rain falls, as if your umbrella scared the clouds away. Forget it one day, and it rains—obviously, the weather isn't mocking you; it's merely a coincidence. The skies don't check your backpack before deciding to rain.
We love moments when we think we've uncovered a hidden truth, but most of the time, we're just fooling ourselves. Understanding the difference between correlation (things happening together) and causation (one thing causing another) is key to avoiding these entertaining yet misleading conclusions.
The Rationality Mirage
In all these cases, we’re convinced we’re thinking straight. The startup CEO knows the ping-pong tables worked. The player knew the socks was magic. We feel logical, citing “evidence” (sales rose, focus sharpened). But it’s System 1 weaving a yarn—coherent, comforting, and often wrong. Kahneman nails it: Our confidence isn’t reason—it’s a feeling tied to how easily the story clicks. We’re not rational; we’re rationalizers.
Confirmation Bias: System 1’s Best Buddy
Once System 1 picks a story, confirmation bias kicks in. You see wins with your lucky socks and forget the losses. The retailer blames the redesign and ignores the rebound’s timing. We cherry-pick proof, thinking we’re methodical, but it’s just System 1 guarding its ego. This is why the delusion sticks: It feels truer the more we lean into it.
Regression to the Mean: The Cosmic Curveball
Sometimes, there’s no causation or correlation—just regression to the mean. After an awful golf shot, your next is decent—not skill, just stats settling. A company tanks, swaps leaders, and rebounds. “Genius hire!” the business press reports. Or maybe it was just due to the company navigating a hiccup and regresses to the mean. System 1 credits the fix; System 2 shrugs, “Probability.”
Take parenting: Your kid acts out, you ground them, they behave. “Discipline works!” you think, all rational-like. But tantrums often peak and fade naturally—regression, not your iron fist. We love a cause, but the universe doesn’t always play along.
How to Outsmart the Delusion: The Park Puzzle
You’ve seen the headlines: “Cities with more parks have lower crime rates—parks prevent crime!” It sounds so neat, doesn’t it? More green spaces, less trouble. But hold on—is that really the full story? Our brains love a quick answer, but that can trick us into believing something that’s not quite true. Let’s outsmart this delusion together using a simple method: flip the story and dig for more clues.
Step 1: Flip the Story
First, let’s turn the idea upside down. The headlines say, “More parks cause less crime.” But what if it’s the other way around? Could less crime lead to more parks? Think about it: safer cities might have the peace and budget to build playgrounds and picnic spots. Suddenly, parks aren’t the hero—they’re just a perk of an already calm place.
Step 2: Hunt for Hidden Clues
Now, let’s look beyond the obvious. What else could explain why cities with more parks have less crime? Here’s a big one: money. Wealthier cities can afford to plant trees and hire more police. Maybe it’s not the parks stopping crime—it’s the extra cops, better schools, or safer streets that come with wealth. The parks might just be along for the ride.
Step 3: Find the Oddballs
Finally, let’s test this idea with a reality check. Are there cities with tons of parks but still lots of crime? Or places with hardly any parks yet super low crime rates? If we find those oddballs, it’s a hint that parks aren’t the magic crime-fighter we thought. The pattern falls apart, and we see there’s more to the story.
All swans were white, until the first black swan was spotted in Australia!
So, next time you hear “Parks prevent crime!” don’t just nod along. Flip it: “Could safe cities just build more parks?” Search for clues: “What about wealth or policing?” Check for oddballs: “Does this hold up everywhere?” By doing this, you’re not just swallowing the headline—you’re outsmarting the delusion. It’s like a detective game, and you’ve got the tools to win!
Takeaway: Engage System 2
Next time you’re ready to crown a hero or blame a goat, pause. Is this cause real, or just a pattern I crave? We are not as rational as you think—System 1’s too sneaky. But spotting this delusion everywhere—from marketing wins to coffee mugs—makes life clearer, if less charmed. Engage System 2 to validate System 1!
Now that we’ve peeled back the layers on correlation versus causality, it’s time to hear from you. Have you ever been tricked by a coincidence—like a “lucky” socks that didn’t really boost your game, or a quirky habit you swore fixed everything (until it didn’t)? Drop your examples in the comments below and let’s share a laugh.
PS - Stay tuned for Chapter 3: The Delusion of Single Explanations, where I will try to explain our obsession with one tidy cause for messy outcomes.