Start thinking more slowly to avoid making obvious, terrible mistakes

Don’t rush to express views, but instead study data and worry about validity. FILE 

By Mike Eldon

In Summary

• Marshall the strength and self-control to examine matters and issues more deeply.

Over the year-end break I dipped into Thinking Fast and Slow by Daniel Kahneman, the 2002 winner of the Nobel Prize for Economics (the only non-Economist to have done so).

My daughter had given me the book as a present, and I’d been looking forward to finding the time to read it.

Doing so also led me to watch a couple of Kahheman’s YouTubes, one an interview with him and the other a 2012 lecture he gave to the Paris School of Economics. I recommend both, and the book too.

I was fascinated by the man and his ideas, not least the story he told from the 1950s, when, as a psychologist in the Israeli army, he and a colleague were selecting candidates for officer training.

Kahneman and his partner gave groups of eight prospects an outdoor activity that required them to get a heavy pole over an obstacle without touching it.

By observing the soldiers in action they quickly developed clear impressions of the various personalities — the leaders and the followers, the strong and the weak.

Imagine their surprise when feedback came from that training showing no correlation between what they had predicted and how the trainees performed.

It was an absurd situation, explained Kahneman, as from the statistics they could see that their selection process was quite worthless. But despite what they learned they continued with the activity and with their assessments, and it is only later that he thought of describing what they had been doing as having “the illusion of validity”.

Here’s another example from his talk, one of many questions he dreamed up knowing the solution to the problem. People are told that a bat and a ball cost a dollar and ten cents together, and that the bat costs a dollar more than the ball. “How much does the ball cost?” they are asked.

The overwhelming number say ten cents… which is wrong. For with the bat costing a dollar more than the ball, this would take its price to $1.10 alone, giving a total of $1.20 for the two.

A further challenge offers this description of an individual by his neighbour:

“Steve is very shy and withdrawn, invariably helpful but with little interest in people or in the world of reality. A meek and tidy soul, he has a need for order and structure.” Then comes the question: “Is Steve more likely to be a librarian or a farmer?”

“The resemblance of Steve’s personality to that of a stereotypical librarian strikes everyone immediately,” notes Kahneman, “but equally relevant statistical considerations – like that there are more than twenty farmers for each male librarian in the United States – are almost always ignored.”

What do these stories add up to? Kahneman’s central thesis distinguishes between two modes of thinking: “System 1”, which is intuitive, fast, instinctive and emotional; and “System 2” which is slower, more deliberative and more logical.

In his book, he highlights several decades of academic research that suggests people (including himself!) place far too much confidence in their human judgment.