BETTER THE DEVIL YOU KNOW

This is the sort of thing someone with low tolerance for ambiguity might say.

Ambiguity is everywhere. It’s an unclear statement, task, or goal. When you encounter an ambiguous situation, you are unsure of how to proceed because the goal is vague or because you don’t have all the information you need/want. Many situations are ambiguous—unclear, uncertain, or open to different interpretations.

In 1949, Else Frenkel-Brunswik introduced ambiguity tolerance–intolerance as a psychological construct to describe the relationship individuals have with ambiguous stimuli or events. Ambiguity tolerant individuals view these stimuli in a neutral and open way; intolerant individuals as a threat. Some people are more inclined one way, and some the other.

Ambiguity Tolerance

Scientists also refer to this tolerance as the ability to “operate in the gray.” It reflects an ability to accept unclear, uncertain, or novel situations and still work effectively. Tolerant individuals are able to deal with ambiguous new stimuli without frustration.

What are the benefits of tolerance of ambiguity? Embracing the unknown allows people (and organizations) to seize new opportunities, take calculated risks, explore previously unchartered territories, and back themselves when they don’t have all the answers.

When there are high levels of uncertainty about a particular business venture, those people with higher levels of tolerance for ambiguity are more likely to succeed. The ability to tolerate conflicting information and deal with missing information makes the difference.

Skills that individuals need to thrive in ambiguous situations are stress-tolerance, good communication skills (verbal and written), problem-solving and critical thinking skills, and adaptability. While some people will naturally have one or some of these skills, anyone can and should learn them.

A study of college students’ tolerance for ambiguity found that students who were involved in the arts had higher scores than business students on ambiguity tolerance, from which the researchers conclude that creativity is linked to ambiguity tolerance.

And there is some evidence that the opposite is also true. A study by De Dreu, Baas, and Nijstad (2008) found that individuals exposed to ambiguous stimuli exhibited greater cognitive flexibility, leading to enhanced creativity and problem-solving skills.

Ambiguity Intolerance

On the other hand, intolerance of ambiguous situations is a cognitive vulnerability that can, in conjunction with stressful life events and negative rumination, lead to depression. Anderson and Schwartz hypothesized in 1992 that this is because ambiguity intolerant individuals tend to see the world as concrete and unchanging, and when an event occurs which disrupts this view these individuals struggle with the ambiguity of their future. Therefore, those who are intolerant of ambiguity begin to have negative beliefs about their situation, and soon view these beliefs as a certainty. This certainty can serve as a predictive measure of depression.

Bochner (1965) categorized attributes given by Frenkel-Brunswik’s theory of individuals who are intolerant to ambiguity as follows:

  • Need for categorization
  • Need for certainty
  • Inability to allow good and bad traits to exist in the same person
  • Acceptance of attitude statements representing a white-black view of life
  • A preference for familiar over unfamiliar
  • Rejection of the unusual or different
  • Resistance to reversal of fluctuating stimuli
  • Early selection and maintenance of one solution in an ambiguous situation
  • Premature closure

The secondary characteristics that describe individuals who are intolerant of ambiguity include uncreative and anxious.

Ambiguity aversion affects behavior. For example, it leads people to avoid participating in the stock market, which has unknown risks (Easley & O’Hara, 2009), and to avoid certain medical treatments when the risks are less known (Berger, et al., 2013). Thus, avoiding ambiguity may make people miss out on a good thing.

Ambiguity aversion is an (irrational?) tendency to prefer the known over the unknown. A person displaying ambiguity aversion would favor taking the highway, even though it’s a tough drive and there’s a chance the unknown route could be better. My extrapolation is that people tend to behave habitually because it is not ambiguous, even when it isn’t the best.

In decision theory and economics, ambiguity aversion prefers known risks over unknown risks. People with this trait would rather choose an alternative where the probability distribution of the outcomes is known over one where the probabilities are unknown.

Walid Afifi, a Communications Professor at the University of California, suggests that for most of us, dealing with ambiguity causes stress and anxiety. This is supported by research indicting that as ambiguity increases, the amygdala (the gray matter deep inside the brain’s cerebral hemispheres) begins responding to a perceived threat. Anxiety and fear rise, while the ventral striatum (which helps respond to rewards) simply stops functioning.

Coping With Ambiguity

Thriving in ambiguous situations requires some special skills:

  • Analytical thinking and innovation
  • Creativity, originality and initiative
  • Complex problem solving
  • Reasoning, problem solving and ideation skills

Act incrementally when you are uncertain.

  • Take small steps, get quick feedback, correct mistakes, and move forward. Starting small and getting quick feedback will help you make progress despite ambiguity. In uncertain situations, delve into what is causing the problem.

Prioritize your own self-care.

  • When you’re sleep-deprived, over-caffeinated, and under-exercised, you’re much less likely to be able to focus, manage your emotions, and make good decisions — all critical for navigating uncertain situations.

Notice and challenge negative thoughts around uncertainty as soon as they come to mind.

  • Obsessing over potential catastrophes has a momentum all its own and can become a downward spiral that renders you anxious and unable to act.

Try to stay relaxed.

  • Cognitive models of anxiety propose that anxious people exhibit biases for threat-related information and a propensity to interpret ambiguous stimuli as more threatening and negative outcomes as more likely to occur than less anxious individuals, which may in turn affect their ability to process non-threats.

Don’t fall prey to analysis paralysis.

  • Look for information but don’t go into perpetual information-seeking mode in the name of learning “enough” to make the right decision. Set a limit on the information you gather, for example, a time limit.

Ambiguities Across Cultures

When exposed to/functioning in a foreign culture, tune in to the cultural norms concerning ambiguity.

Cultures with high uncertainty avoidance have a low tolerance for ambiguity and minimize the possibility of uncomfortable, unstructured situations by enforcing strict rules, safety measures and a belief in absolute truth. People from these cultures tend to become anxious when they are in unfamiliar situations or don’t have at least rough plans.

Cultures that are pretty high on ambiguity tolerance include the nations of the Caribbean and Southern Europe. In these regions, communication with both friends and strangers tends to be informal, time schedules are not always important, and uncertainty is a common feature of daily life.

Within a culture (the U.S.), Harington, Block, and Block (1978) assessed intolerance of ambiguity in children ranging from 3.5 to 4.5 years. The researchers then re-evaluated the children when they turned seven. Their data showed that male students who were high in ambiguity intolerance at the earlier age had more anxiety, required more structure, and had less effective cognitive structure than their female peers who had also tested high in ambiguity intolerance.

Research overall suggests that people don’t like ambiguity. For example, people prefer betting on events whose probabilities are known (objective) to betting on events whose probabilities are unknown to them (subjective).

To put it another way, research has established that, when given a choice between two options differing in their degree of ambiguity, people tend to prefer the less ambiguous option. I.e., most people exhibit ambiguity avoidance.

Bottom Line: Ambiguity cannot be avoided, so your best bet is to learn to handle it.

STRESS AND TAXES

I suppose there might be people out there who can file their annual tax returns stress-free. Congratulations! For the rest of us, condolences!

Money and Stress

In 1943, the US government enlisted the help of Donald Duck to educate Americans about how to pay their income tax and why it was important to the war effort.

“Money is a major source of stress on people, and what tax season does is shine a great big spotlight on the issue,” Michael McKee, a Cleveland Clinic psychologist and president of the U.S. branch of the International Stress Management Association, told WebMD. “Money takes center stage at tax time, even if you might have been able to push it to the wings the rest of the year.”

A 2004 survey sponsored by the American Psychological Association found that nearly three-quarters of Americans cited money as a significant source of stress. Money is also consistently among the top causes of marital contention, says Olivia Mellan, a psychotherapist and financial self-help author based in Washington, D.C.

Heightened Tax Stress

And nothing focuses us on money like tax time. Anyone can face the stress of having money due and too little money on hand. For those who itemize, there are additional sources of stress:

eFiling comes with the risk of computer glitches or internet lag affecting your tax returns.
  • The frustration of the forms’ language
  • Finding time to do the work
  • Filing for an extension
  • Missing documents
    • (This is a biggie. It could be anything, but it’s often receipts. I won’t go into the time my husband inadvertently threw away all of our 1099s.)

Then there are miscellaneous stresses:

  • You finally wedged a CPA appointment into a jammed schedule only to discover that said CPA has moved, you can’t find the office, miss the appointment, etc.
  • Your CPA retired last summer
  • A bigger accounting firm absorbed your old one and now communications are via a headquarters in South Carolina (or wherever)

Sources of Financial Stress

But virtually every item on the topic index is rife with sources of stress. These may or may not be directly related to the taxes due, but dealing with them at tax time could well trigger strong emotions. Here is a select list:

Tax season causes everyone financial stress. These stacks are just some of the $110,000,000 worth of stamps the IRS used to send out tax forms in 1914.
  • Alimony paid or received (or not)
    • …and associated hostility
  • Business use of home
    • …and the strain it puts on family
  • Casualty or theft loss
    • …and the aftermath of being a victim of crime
  • Child and dependent care expenses
    • …meeting them, but also finding such services in the first place, and possibly the precariousness of arrangements
  • Contributions
    • …a willing tithe to church, or possibly being pressured to support your alma mater
  • Education expenses
    • …and doubts about whether the degree is worth it
  • Foreign assets, expenses, taxes, and income
    • …and what to do about off-shore accounts and tax shelters, should you be one of those people
  • Gambling winnings (or losses)
    • …and whether to join Gamblers Anonymous
  • Gifts
    • …to whom and what and whether they were freely given
  • Medical and dental expenses
    • …and the trauma of diagnosis, surgery, recovery (or not)
This income is from an Etsy shop, right? Nothing nefarious to report here!
  • Miscellaneous income and adjustments
    • (They really expect people to report illegal income??)
  • Mortgage or education loan interest paid
    • …and the continuing burden from years ago
  • Moving expenses
    • …and whether the move was up or down, willing or forced
  • Sale of home, stock, or other capital assets
    • …and why the sale? Was the market down at the time or up?
  • Unemployment compensation
    • …and whether it was enough, whether it ended too soon, whether filing for it was humiliating
  • Sale of home, stock, or other capital assets
    • …and why the sale? Was the market down at the time or up?
  • Unemployment compensation
    • …and whether it was enough, whether it ended too soon, whether filing for it was humiliating
Whether taxes are justified …and if you ought to throw tea in the harbor to protest.

If you are filing a joint return, remember (and remind your spouse if necessary) not to displace anger/frustration rooted in the process.

Other Sources of Tax Stress

The Darius Vase depicts, among other scenes, the Royal Treasurer receiving taxes from conquered nations of the Persian Empire, circa 340 BCE.

Then, too, sometimes there are ongoing issues about money. For example, if one partner is a spender while the other partner is a saver and a worrier. This can result is resentment at tax time, when a couple may examine how their habits are affecting their lives and marriage.

“Of course, we all bring our individual emotional baggage to tax preparation. Fear of the government also emerges at tax time. Some clients of financial counselor Karen McCall are so afraid of the IRS that they won’t take even the most innocuous deduction. “They’re paralyzed because the IRS is an authority figure, and if they have unresolved issues around authority figures in their lives, that can cause a lot of fear.”

Sometimes, that fear of filing taxes stems from is understandable. As Michael McKee says, people who have been through audits can suffer from post traumatic stress syndrome during tax season for years afterward.

Avoiding Tax Stress

You may not be able to avoid all stress at tax time, but consider ways to lessen it. Mellan and McCall offered these tips in a WebMD article on coping with tax stress.

Little known fact: if you set all your money and assets on fire, you won’t have to declare them as assets to the IRS!
  • To avoid last-minute stress, file early and break up the job into little pieces, Mellan suggests. Do your taxes while listening to music or whatever else makes you feel relaxed.
  • For filers with math anxiety, Mellan recommends hiring a preparer or investing in tax software. Tax software typically collects information through an “interview” and the computer does all the calculations.
  • Fractious couples should strategize on ways to avoid chronic money fights, Mellan says. For example, try communicating financial information through notes or other modes that won’t carry an accusatory tone.
  • McCall suggests channeling tax-time stress into a resolution to track your finances more carefully. Better money management is the best way to avoid unpleasant surprises each year, she says.
  • Finally, if you’re feeling overwhelmed, you can turn to your buddies at the IRS. Options include filing an extension or setting up an installment plan for tax payment. For more details, visit the IRS website at www.irs.gov.
This would all be so much easier if the IRS explained taxes like they would to a preschooler.

Bottom Line: Tax time is stress time. You’ll just have to deal, starting with recognizing the danger zones and ameliorating as best you can.