Chapter 36 Exercises
How to use these exercises: Work through the parts in order. Part A builds recognition skills, Part B develops analysis, Part C applies concepts to your own domain, Part D requires synthesis across multiple ideas, Part E stretches into advanced territory, and Part M provides interleaved practice that mixes skills from all levels.
For self-study, aim to complete at least Parts A and B. For a course, your instructor will assign specific sections. For the Deep Dive path, do everything.
Part A: Pattern Recognition
These exercises develop the fundamental skill of recognizing narrative capture across domains.
A1. For each of the following scenarios, identify: (a) the narrative that is capturing reasoning, (b) the evidence or statistical information that the narrative is overriding, and (c) the coherence/correspondence gap -- what feels true versus what the data shows.
a) A jury hears a detailed story about how the defendant planned and executed a burglary, including vivid descriptions of the defendant casing the house, purchasing tools, and waiting until the homeowners were away. The defense presents alibi evidence showing the defendant was in another city at the time, supported by credit card records and cell phone tower data.
b) An investor reads a profile of a startup founder who dropped out of college to pursue a revolutionary idea, mortgaged their house, worked from a garage, and is now on the verge of disrupting a trillion-dollar industry. The investor's financial analyst notes that 94% of startups with similar profiles fail within five years.
c) A patient tells their doctor a compelling story about how their symptoms began after a stressful life event, connecting emotional distress to physical symptoms in a way that makes intuitive sense. Lab results suggest a bacterial infection unrelated to stress.
d) A political candidate tells a story about growing up in poverty, working hard, and achieving success through determination -- arguing that their personal narrative proves that poverty is a matter of individual effort rather than structural barriers. Census data shows that intergenerational economic mobility has declined steadily over three decades.
e) A documentary tells the story of a school district that improved test scores dramatically after implementing a new teaching method, following a charismatic principal through a year of transformation. A randomized controlled trial of the same method in twelve other districts found no significant improvement.
f) A historian tells the story of a civilization's decline as a moral parable -- luxury and decadence led to weakness, which led to conquest. Archaeological evidence suggests the civilization was destroyed by a prolonged drought and the resulting crop failures.
g) A therapist hears a patient's life story organized around a single traumatic event that "explains everything" -- every relationship failure, every career setback, every emotional difficulty is attributed to this one event. Psychometric testing suggests the patient's difficulties are better explained by a heritable personality trait that predates the traumatic event.
h) A news article tells the story of a heroic whistleblower who exposed corporate fraud, implying that whistleblowing is an effective mechanism for corporate accountability. Data from studies of whistleblower outcomes shows that the majority of whistleblowers experience retaliation and that corporate fraud rates have not declined despite increased whistleblower protections.
A2. For each of the following famous narratives, identify the conjunction fallacy at work -- the point where adding narrative detail makes the explanation feel more probable while making it statistically less probable.
a) "The financial crisis of 2008 was caused by greedy bankers on Wall Street who knowingly sold toxic mortgage-backed securities while betting against them."
b) "The Renaissance began when scholars rediscovered ancient Greek texts, which inspired a new spirit of inquiry that led to the Scientific Revolution."
c) "Climate change is caused by large corporations that prioritize profit over the environment, spending millions on lobbying to prevent regulation."
d) "The patient's chronic fatigue is caused by unresolved childhood trauma that suppressed their immune system, making them vulnerable to the Epstein-Barr virus, which then became chronic."
e) "The startup succeeded because the founder had a unique vision, assembled a brilliant team, and was in the right place at the right time."
A3. Classify each of the following as primarily a coherence-driven judgment or a correspondence-driven judgment. Explain your classification.
a) "That explanation makes sense -- all the pieces fit together."
b) "The data from the randomized controlled trial shows a 23% improvement with p < 0.01."
c) "I just have a feeling this is the right diagnosis -- it explains everything."
d) "Companies in this reference class have a median five-year survival rate of 38%."
e) "His life story is so inspiring -- he overcame so much to get where he is."
f) "The base rate of this disease in the relevant population is 0.3%."
g) "This theory is elegant -- it unifies several previously disconnected observations."
h) "Across 47 studies, the weighted mean effect size is 0.12, which is not clinically significant."
A4. For each domain discussed in the chapter, identify one real-world institution or practice that functions as a defense against narrative capture. Explain the mechanism by which it interrupts narrative reasoning.
a) Courts
b) Financial markets
c) Medicine
d) Historical scholarship
e) Personal decision-making
A5. The chapter describes five defenses against narrative capture. For each defense, describe a situation where the defense would be most useful and a situation where it would be least useful or even counterproductive.
a) Statistical thinking and base rates
b) The outside view / reference class forecasting
c) Pre-registration and pre-commitment
d) Devil's advocacy and red teams
e) Seeking disconfirming narratives
Part B: Analysis
These exercises require deeper analysis of narrative capture dynamics.
B1. Narrative Anatomy. Choose a current event that is being widely discussed (a political controversy, a business story, a health scare, a cultural debate). Map the dominant narrative by identifying:
a) The protagonist(s) and antagonist(s) -- who are the characters? b) The conflict -- what is the central tension? c) The causal chain -- what is said to have caused what? d) The moral -- what lesson is the narrative teaching? e) The evidence that supports the narrative f) The evidence that the narrative ignores, minimizes, or reframes g) The coherence/correspondence gap -- where does the story's internal logic diverge from what the data shows?
Write a one-page analysis identifying the narrative capture and proposing the strongest available counter-narrative.
B2. Bubble Narrative Template. Using Shiller's framework, construct the narrative template for a speculative bubble in an asset class that has not yet experienced one (examples: water rights, carbon credits, rare earth minerals, asteroid mining rights, AI-generated art). Include:
a) The novelty narrative ("This asset is new and different because...") b) The social proof narrative ("Others are getting rich by...") c) The new-era narrative ("Traditional valuation metrics don't apply because...") d) The urgency narrative ("If you don't invest now...") e) Then construct the counter-narrative using base rates, historical analogies, and correspondence-based reasoning.
B3. Diagnostic Narrative Trap. A patient presents to the emergency department with the following information, arriving in this order:
- Paramedic report: "55-year-old male, found confused in his office, colleagues say he was under extreme work stress"
- Vital signs: blood pressure 165/95, heart rate 92, temperature 37.2C
- Colleagues report: "He's been working 80-hour weeks for a month, barely eating, extremely anxious about a deadline"
- Lab results (arriving 45 minutes later): blood glucose 35 mg/dL (severely low)
a) Construct the diagnostic narrative that the first three pieces of information would produce. b) Explain why the lab results (which reveal the actual cause -- hypoglycemia, likely from not eating) might be discounted or delayed in evaluation. c) Redesign the information delivery sequence to minimize narrative capture. What would you present first? d) Propose a structural intervention (beyond individual awareness) that would reduce diagnostic narrative capture in emergency departments.
B4. Historical Narrative Dissection. Choose a historical event that is commonly taught as a clear narrative (examples: the fall of the Berlin Wall, the invention of the internet, the abolition of slavery, the Industrial Revolution). Write two versions:
a) The standard narrative version: a coherent story with clear causation, protagonists, and moral. b) The anti-narrative version: the same events presented as a complex, contingent process with multiple interacting causes, no clear protagonists, and no simple moral. c) Analyze: which version is more satisfying? Which is more accurate? What does the gap tell you about narrative capture in historical education?
B5. Identity Narrative Mapping. This exercise is personal and optional. Map your own identity narrative by answering:
a) What is the story you tell yourself about who you are? b) What events does the narrative emphasize? What events does it minimize or exclude? c) Is the narrative a redemption story (bad things turned good) or a contamination story (good things turned bad)? d) What choices does the narrative tell you are available to you? What choices does it tell you are not available? e) Construct an alternative narrative about the same life events that leads to a different conclusion about who you are and what is possible for you. Note: the purpose is not to replace one narrative with another but to recognize that multiple narratives are possible -- and that the one you are living inside is a choice, not a fact.
Part C: Application to Your Own Domain
These exercises ask you to apply narrative capture concepts to your own field of expertise or area of interest.
C1. Identify the dominant narrative in your field (academic discipline, industry, professional practice). What is the story your field tells about itself? What does this narrative include, and what does it leave out? What would an anti-narrative version of your field's self-understanding look like?
C2. Identify a decision in your professional life that was influenced by narrative capture -- a time when a coherent story led to a decision that better statistical thinking might have changed. Analyze the narrative that captured your reasoning and the evidence that was overridden.
C3. Design a "narrative audit" for your organization or field -- a structured process for identifying when narrative capture is operating in decision-making. What questions would the audit ask? What data would it require? How would it be implemented without creating its own narrative capture (the story that "we are the kind of organization that audits for bias")?
C4. Identify a "master narrative" in your field that constrains what is considered possible, important, or worthwhile. How does this master narrative shape research agendas, funding priorities, career paths, or policy decisions? What would change if the master narrative were replaced?
Part D: Synthesis
These exercises require integrating narrative capture with concepts from previous chapters.
D1. Narrative Capture + Streetlight Effect (Ch. 35). The chapter argues that narrative capture and the streetlight effect are complementary distortions. Develop this argument in detail for a specific domain:
a) Identify the streetlight in the domain (where the search is happening). b) Identify the narrative capture in the domain (what story is being told about the search results). c) Explain how the two distortions reinforce each other. d) Propose countermeasures that address both simultaneously.
D2. Narrative Capture + Skin in the Game (Ch. 34). The chapter notes that narrative capture is especially dangerous when the narrator does not bear the consequences of acting on the narrative. Analyze this interaction in three domains:
a) Financial analysts who recommend investments they do not personally hold b) Political commentators who advocate policies that do not affect them personally c) Medical researchers who publish treatment recommendations they would not follow for themselves For each, explain the mechanism by which absence of skin in the game amplifies narrative capture.
D3. Narrative Capture + Overfitting (Ch. 14). The chapter briefly connects narrative capture to overfitting. Develop this connection:
a) In what specific way is a compelling narrative like an overfitted model? b) What is the "training data" that narratives overfit to? c) What is the equivalent of "out-of-sample prediction" for narratives? d) How can cross-validation (testing a model on data it was not trained on) be applied as a defense against narrative capture?
D4. Narrative Capture + Bayesian Reasoning (Ch. 10). The chapter notes that narrative capture violates Bayesian updating. Formalize this violation:
a) Describe the Bayesian ideal: how should a reasoner update beliefs when confronted with evidence that contradicts their current hypothesis? b) Describe the narrative capture violation: what does a narrative thinker actually do with contradicting evidence? c) Identify the specific Bayesian principle that narrative capture violates (hint: it involves the likelihood ratio). d) Propose a practical procedure that would move decision-making closer to the Bayesian ideal in a specific domain.
D5. Narrative Capture + Feedback Loops (Ch. 2). The chapter mentions that personal identity narratives can create self-fulfilling prophecies through feedback loops. Generalize this mechanism:
a) Describe the feedback loop structure: narrative leads to behavior, behavior leads to outcomes, outcomes are interpreted through the narrative, the interpretation reinforces the narrative. b) Identify this feedback loop operating in at least three domains beyond personal identity. c) Is this a positive feedback loop or a negative feedback loop? Why? d) What would it take to break the loop?
Part E: Advanced
These exercises go beyond the chapter's explicit content and require creative application of narrative capture concepts.
E1. Narrative Capture in Science. Thomas Kuhn argued that scientific paradigms are, in part, narratives about how the world works. Analyze a specific scientific paradigm shift (the Copernican revolution, plate tectonics, germ theory, the cognitive revolution in psychology) as a case of competing narrative capture:
a) What was the old narrative? Why was it coherent? b) What was the new narrative? Why was it more coherent? c) What evidence existed that contradicted the old narrative? How was it accommodated within the old story? d) At what point did the old narrative's coherence collapse? What triggered the collapse? e) Was the shift driven primarily by new evidence (correspondence) or by a better story (coherence)?
E2. Narrative Capture and Artificial Intelligence. Large language models generate text by predicting the most likely next token, producing outputs that are maximally coherent by construction. Analyze the implications:
a) In what sense do language models produce narrative capture by default? b) How does the coherence of AI-generated text interact with human narrative cognition? c) What specific risks does AI-generated narrative capture create that did not exist before? d) What defenses against AI-generated narrative capture might be effective?
E3. The Meta-Narrative Problem. This chapter itself is a narrative -- a story about how stories hijack reasoning. Analyze the chapter's own narrative capture:
a) What is the chapter's narrative? What is its protagonist, antagonist, conflict, and resolution? b) What evidence does the chapter emphasize? What evidence does it minimize? c) What is the most coherent counter-narrative to the chapter's argument -- a story about how narrative thinking is actually our greatest cognitive strength? d) Is the chapter's argument more coherence-driven or correspondence-driven? How would you test its claims against reality?
Part M: Mixed Practice (Interleaved)
These problems mix skills from different levels and different chapters, forcing retrieval and transfer.
M1. A CEO addresses shareholders with the following narrative: "We faced unprecedented challenges this year, but our team showed remarkable resilience. We invested heavily in innovation, and while short-term results were disappointing, we are positioned for extraordinary growth in the coming years." Identify: (a) the narrative capture (this chapter), (b) the potential Goodhart's Law violation (Ch. 15) if "innovation investment" is being used as a metric, (c) the skin-in-the-game question (Ch. 34), and (d) the streetlight effect (Ch. 35) -- what is the CEO not talking about?
M2. A health influencer posts a testimonial: "I was sick for years. Doctors couldn't help me. Then I tried [alternative treatment] and was cured in three weeks." This narrative is compelling. Apply: (a) base rate thinking (what percentage of people who try this treatment improve?), (b) the conjunction fallacy (does the detail make the story feel more probable than it is?), (c) survivorship bias (Ch. 37 preview -- are we hearing from the people who tried and were not cured?), (d) the outside view (what does the reference class of similar treatments show?).
M3. A history teacher tells students: "The American Revolution succeeded because the colonists wanted freedom more than the British wanted to keep them." Apply narrative capture analysis: (a) Is this a coherence-based or correspondence-based claim? (b) What causal factors does this narrative omit? (c) How would a statistical/structural analysis of the revolution differ from this narrative? (d) Why is the narrative version more likely to be taught and remembered?
M4. Recall the concept of succession from Chapter 32. A tech company's narrative has passed through three stages: (1) "We're a scrappy startup disrupting an industry," (2) "We're the market leader with a proven business model," (3) "We're a mature platform building an ecosystem." At each stage, the company's narrative captured investors, employees, and the press. Now the company is declining and a new narrative is forming: (4) "We lost our way when we stopped innovating." Analyze each stage's narrative as a successional phase. What is the narrative's relationship to reality at each stage? When did coherence and correspondence diverge?
M5. You are serving on a hiring committee. One candidate tells a compelling story in their interview about overcoming adversity, learning from failure, and developing unique skills. Another candidate presents a portfolio of work with quantitative performance metrics but tells a flat, unengaging personal story. Your gut says to hire the first candidate. Analyze: (a) the narrative capture operating on your judgment, (b) the base rate question (what predicts job performance -- narrative quality or performance metrics?), (c) the presentation effect (would your assessment change if you saw the portfolio before hearing the story?), (d) a structural intervention that would reduce narrative capture in hiring.