Gell-Mann Amnesia Effect

Have you ever read an article and thought to yourself that the author didn’t know enough detail to really be writing about the subject?

The Gell-Mann Amnesia Effect goes like this. You open a newspaper and read an article where you clearly know more than the author. You think to yourself “I can’t believe they got XYZ wrong.” Then you read an article where you have little to no background and take everything at face value without verifying anything as truth.

Here’s an example. WWE (now a part of TKO) recently signed a $5 billion deal over 10 years with Netflix to air their flagship show Monday Night RAW. The old price WWE received for airing RAW in the US is supposedly ~$250mm per year. I’ve read several articles and listened to several podcasts where people claimed the rights fees doubled. Yes, 500 divided by 250 is 2, but this was not an apples to apples comparison! The 250 million was for the US rights only, but (for simplicity’s sake) the 500 million is for worldwide distribution rights. 

The takeaway here is that many reports were significantly off on what the percentage increase was. 

This isn’t to say that someone incredibly thorough in one instance should always be trusted, but being off by an order of magnitude in one instance should lead to heightened scrutiny.