Humans are fallible. Importantly however, humans are fallible in predictable ways. That is the main argument of The Undoing Project, and the elucidation of the specific ways we are fallible makes this book one that is worth reading.
These notes are part original and part passages from the book.
The Israeli military measures the performance of their fighter pilot training programs. They discover that pilots perform better after criticism and worse after praise. What is the problem with this conclusion? Criticism is given after poor performance, and praise after exceptional performance, so this is just an example of regression to the mean.
Humans also appear to believe in the "Law of Small Numbers" - that is to say, they believe that small samples behave just like large samples. In fact, small samples are likely to contain much more randomness than people expect. People expect coins to "even themselves out" after a string of heads, and so forth. (If anyone reading this thinks, "I mean, they do..." - that's how strong that bias is!)
“Our thesis,” they wrote, “is that, in many situations, an event A is judged to be more probable than an event B whenever A appears more representative than B.” In birth order, people think that "G B G B B G" is more likely than "B G B B B B" because the first is more representative of the proportion of boys and girls in the general population. (The sequences in fact have the same probability).
The natural next question: When does our rule-of-thumb approach to calculating the odds lead to serious miscalculation? One answer was: Whenever people are asked to evaluate anything with a random component to it.
Danny and Amos had noticed how oddly, and often unreliably, their own minds recalculated the odds, in light of some recent or memorable experience. For instance, after they drove past a gruesome car crash on the highway, they slowed down: Their sense of the odds of being in a crash had changed. After seeing a movie that dramatizes nuclear war, they worried more about nuclear war; indeed, they felt that it was more likely to happen. The sheer volatility of people’s judgment of the odds—their sense of the odds could be changed by two hours in a movie theater—told you something about the reliability of the mechanism that judged those odds.
They first dramatized its effects by giving a bunch of high school students five seconds to guess the answer to a math question. The first group was asked to estimate this product:
8 × 7 × 6 × 5 × 4 × 3 × 2 × 1
The second group to estimate this product:
1 × 2 × 3 × 4 × 5 × 6 × 7 × 8
Five seconds wasn’t long enough to actually do the math: The kids had to guess. The two groups’ answers should have been at least roughly the same, but they weren’t, even roughly. The first group’s median answer was 2,250. The second group’s median answer was 512. (The right answer is 40,320.)
“There is much evidence showing that, once an uncertain situation has been perceived or interpreted in a particular fashion, it is quite difficult to view it in any other way.”
One important conclusion from this book is that our minds are expert illusionists. We convince ourselves we know and understand so much more than we do. If one wants to become genuinely good at predicting the future, one needs to write down their predictions and their reasons or model and then continually refine the model.
In short, self-doubt is a valuable trait for predicting the future. To weave in threads from another book I'm currently reading, Fooled by Randomness, how many people simply look successful because they got lucky? Many people will appear to be able to predict the future on that basis. One cannot have access to data on future performance before-hand if one is to assess someone's ability to predict the future.
Kahneman's self doubt is so extreme that every few months he'd announce that he was giving up writing altogether — before he destroyed his own reputation,” Mr. Lewis writes. “To forestall his book’s publication he paid a friend to find people who might convince him not to publish it.”Mr. Lewis writes. “To forestall his book’s publication he paid a friend to find people who might convince him not to publish it.”
Michael Lewis weaves several threads in this novel: insight into psychology and human biases on the one hand, the story of Kahneman's and Tversky's friendship on othe other. The latter part of the book chronicles their falling out as Kahneman's envy grows as Tversky receives the bulk of the credit for their joint work.
Friendship is the lifeblood of existence. As Lewis writes, their friendship borders on platonic love, and seeing such deep friendship destroyed is, well, painful. If I learn a lesson from their story, it's to never leave friends behind. In Lewis's description, neither had the emotional intelligence to address the attribution inequity head-on, and the relationship fractured under the weight of that stress. Had either been more honest, observant, or emotionally communicative, they likely would have remained closest of friends.