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There's an Explanation for Everything

The Narrative Fallacy

The evening news: “The Dow lost 15 points today on the news that the Federal Reserve chairman slept in late this morning.”

A history book: “Jonathan Pendlebrook was elected president that year due to voter anxiety about foreign policy.”

Sports announcer: “The Water Bears won the playoff because they wanted it more.”

My 15 year old daughter to me: “I knew you were gonna say that.”

What do these events have in common? They are all classic examples of The Narrative Fallacy.

Spinning yarns from thin air

Here are two universal truths about human nature:

1) We love a good story.

2) We like to build things - to create structure out of chaos.

So it is natural that we build stories to make sense of all the randomness around us. And we do create some good stories! So good that sometimes we believe our own tales, even when we make them up.

We (and our lizard brain) create narratives to give ourselves a pleasing sense of order and certainty about the world around us. If something happens but we don’t have a “because…” we feel disoriented and uncomfortable. But if we can find a reason – a pattern, a thread, any possible cause – we will jump at the chance to make the connection whether it is true or even probable.

It just feels better. And if the narrative fits nicely with what we already believe or what we hope to be true, it feels even better still (see The Confirmation Bias).

Believing your team won a game because it wanted it more feels better than realizing it won simply because a player on the other team was struggling with the flu.

Believing there are rational explanations to a market downturn (e.g. XYZ company didn't meet its projected earnings) feels better than having to accept that there are unknowable, even random, forces causing your 401k to drop.

So we try to make sense of - and find a pattern in - events that may just be caused by dumb luck.


I have a fantasy and it is completely unrealistic. I dream about finding a news source that just reports what happened without attempting to tell us why it happened, predicting what will happen next, or spinning it so it aligns with their worldview. In other words, just the facts.

That fantasy news channel doesn’t exist, mainly because most people don’t want that and it wouldn't be profitable. They want to know why something happened so they can have that comforting feeling of knowing what might come next.

Better than 20/20 hindsight

When we say “I knew you would say that” or "I knew that would happen," we are re-writing history to give ourselves more credit than we deserve. We aren’t lying – we truly feel like we did know it beforehand.

But studies show that in these situations we actually had several possible outcomes in mind and that our recollection of what we were thinking is distorted by what really did happen. We create a new (false) narrative, one in which we have psychic superpowers! We knew it would happen.

This ability to mis-remember our past thoughts and feelings is called Hindsight Bias. It is a close cousin of The Narrative Fallacy, and both are ways that we create our own “fake news.”

Creating and believing false narratives affects our ability to make sound decisions. If we believe that X caused event Y and Y was bad, then we will avoid X in the future even though X may have had nothing to do with Y.

Better than 20/20 hindsight

To avoid falling into the trap of creating and believing false narratives, try to separate the “what” from the “why”. Unless there is firm evidence, see if you can disregard the explanation and be okay with simply not knowing why something occurred. It feels weird and uncomfortable at first, but that’s life. Real life.

Listen with a critical ear. Remember - just because an explanation of why something happened sounds plausible, doesn’t mean it’s true. Don’t hang the “true” tag on everything that sounds good.

And for me, just because my daughter thinks she always knows what I am going to say next, that doesn’t make her smarter than me.

Even though, yeah, she really is smarter than me.

Think well and be well.

- Steve.


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