48. ‘Thinking, Fast and Slow,’ Daniel Kahneman

48. ‘Thinking, Fast and Slow,’ Daniel Kahneman

Want to know how much I enjoyed this book, from Nobel Prize winning economist Daniel Kahneman, described by TED as “the world’s most influential living psychologist”? They do say a picture paints a thousand words, so below is a snapshot of all of the post-it notes which made their way into my copy of Kahneman’s summary of his lifetime’s work, exploring how humans think, and why, as a result, we’re often not very good at it:

Books on how humans think have always been amongst my favourites, from Steven Pinker‘s all encompassing ‘How The Mind Works‘ to Nicholas Nassim Taleb‘s more specialist ‘The Black Swan, via anything featuring clever and revealing experiments on topics from lying, (reviewed here), to randomness, (reviewed here), and epitomised by the boom in Freakonomical/Malcolm Gladwellian popularity. Yet, again and again, one pair of names would always pop up in this literature: Kahneman and Tversky.

This Israeli pair of scientists are amongst the most quoted scientists in history, and one of the best things about their work is that it seems to have come about through two grown men simply having fun: sitting down regularly, discussing crazy ideas, and finding fun and interesting ways to test their theories, (which, more often than not, proved to be intuitively correct).

As the title suggests, their experiments proved that the human brain has two systems for processing information. One is an instinctive, ‘fast’ process which happens instinctively, (for example, whether you want to or not, even if you know the optical illusion, you cannot stop your brain from thinking that the equal length lines below are different lengths):

The other is a more deliberate thinking process which takes effort and focus, (and, indeed, physical energy, which leads to interesting consequences), which kicks into action when faced with anything from “What is 32×12” to how to complete a sudoku puzzle.

418 pages of small print have never felt so much fun: here are the highlights, although if you have a few days free, I recommend skipping what follows and reading the book yourself!

Firstly, whilst most of the pleasure I got from the book derived from the experiments and their often surprising and counter-intuitive results, it offers some important morals too. One of the major themes of the book is that you do not have to be a genius to improve your way of thinking:

“Intelligence is not only the ability to reason; it is also the ability to find relevant material in memory and to deploy attention when needed…everyone has the option of slowing down to conduct an active search of memory for all possibly relevant facts…”

It was the experiments, however, which really made the book for me. As with so much of their work, the following experiment is not only genius, and fun, it also has serious consequences: who could have guessed there is a link between self-restraint and intelligence?

“In one of the most famous experiments in the history of psychology, Walter Mischel and his students exposed four-year-old children to a cruel dilemma. They were given a choice between a small reward (one Oreo), which they could have at any time, or a larger reward (two cookies) for which they had to wait 15 minutes under difficult conditions…the film that shows their behaviour during the waiting time always has the audience roaring with laughter. About half the children managed the feat of waiting…Ten or fifteen years later…the children who had shown more self-control as four-year-olds had substantially higher scores on tests of intelligence…”

On ‘priming,’ (a terrifying method in which our opinions can be controlled in the subtlest ways, a fact seemingly well understood by advertisers):

“,,,living in a culture of that surrounds us with reminders of money may shape our behaviour and our attitudes in ways that we do not know about and of which we may not be proud…”

On the power of blatant lies, (perhaps helping to explain the success of politicians such as, taken entirely at random, George W Bush):

“The psychologist Daniel Gilbert…developed a theory of believing unbelieving that he traced to the seventeenth-century philosopher Baruch Spinoza. Gilbert proposed that understanding a statement must begin with an attempt to believe it: you must first know what the idea would mean if it were true. Only then can you decide whether or not to unbelieve it…”

In one section on the importance of formulae, the following gem occurs, negating any complaints of science not being important to real life:

“In a memorable example, Dawes showed that marital stability is well predicted by a formula:

frequency of love making minus frequency of quarrles

You don’t want you result to be a negative number….”

At times, it seemed like every experiment in every chapter had spawned a recent best-seller, many of which I had read. The origins of ‘The Wisdom of Crowds‘ by James Surowiecki, which I read late last year, clearly had its roots in various experiments presented in a chapter on capitalism, which featured the following genius tip for making sure groups aren’t blinded by optimism when making important decisions: the premortem:

“The procedure is simple: when the organization has almost come to an important decision but has not formally committed itself, Klein proposed gathering for a brief session a group of individuals who are knowledgeable about the decisions. The premise of the session is a short speech: ‘Imagine that we are a year into the future. We implemented the plan as it now exists. The outcomes was a disaster. Please take 5 to 10 minutes to write a brief history of that disaster’…”

The chapter on ‘Bad Events’ explained a phenomenon which I had experienced when teaching in Japan. A lecture theatre could be full of 70 students enjoying a class, but I would always focus on the two looking like they weren’t having fun. Why?

“Some experimenters have reported that an angry face ‘pops out’ of a crowd of happy facecs, but a single happy face does not stand out in an angry crowd. The brains of humans and other animals contain a mechanism that is designed to give priority to bad news…”

In a further demonstration:

“The psychologist Paul Rozin, an expert on disgust, observed that a single cockroach will completely wreck the appeal of a bowl of cherries, but a single cherry will do nothing at all for a bowl of cockroaches…”

Couldn’t have put it better myself.

There are several sections involving statistics, odds and the way playing with language alters our perceptions. One of the cleverest experiments involved the following scenario: give it a go!

“You have been exposed to a disease which if contracted leads to a quick and painless death within a week. The probability that you have the disease is 1/1,000. There is a vaccine that is effective only before any symptoms appear. What is the maximum you would be willing to pay for the vaccine?”

There are no tricks; just try it!

Go on.

I’ll wait.

According to Kanheman, most people would pay “…a significant but limited amount,” since the odds of having the disease is relatively small.

Now for Part II:

“Volunteers are needed for research on the above disease. All that is required is that you expose yourself to a 1/1,000 chance of contracting the disease. What is the minimum you would be asked to be paid in order to volunteer for this program? (You would not be allowed to purchase the vaccine).”

Again, what would you take to be a part of this experiment? Anywhere near the figure in the first question?

According to the scientists who ran the experiment, participants generally named a figure around 50 times higher for the second question than the first…even though, economically, they are more or less exactly the same. Our risk-aversion, and the fact that we feel guiltier for actions we have taken which result in negative consequences, leads to the discrepancy.

Another example of how we are fooled by numbers was the following:

“Adam switches from a gas-guzzler of 12mpg to a slightly less voracious guzzler that runs at 14mpg.

The environmentally virtuous Beth switches from a 30mpg car to one that runs at 40mpg.

Suppose both drivers travel equal distances over a year. Who will save more gas by switching?”

Had a guess? You probably, like any sensible, sane person presumed it was Beth. How can it not be? Well, when you use your ‘slow’ thinking, (probably including a pencil and paper, or calculator), and do the actual maths, that’s when.

“If the two car owners both drive 10,000 miles, Adam will reduce his consumption from a scandalous 833 gallons to a still shocking 714 gallons, for a saving of 119 gallons. Beth’s use of fuel will drop from 333 gallons to 250, saving only 83 gallons. The mpg frame is wrong, and it should be replaced by the gallons-per-mile frame…”

A fact which was spotted by the co-author of the excellent social policy book ‘Nudge,’ Cass Sunstein, who worked for President Obama as administrator of the Office of Information and Regulatory Affairs, and has led to this information for the first time being displayed on all new cars in the USA from 2013.

Are you happy? There are uncountable ‘Are you happy?’ experiments, and ‘Ways to improve your happiness’ self-help books, not to mention different international ‘happiness rankings‘: but defining happiness, it turns out, isn’t so simple. An experiment described earlier in the book had asked people to estimate how many dates they had been on recently, and their subsequent ratings of their own happiness had shown an uncanny correlation with this single factor. In the final chapter, ‘Thinking About Life,’ we are presented with a similar experiment:

“Norbert Schwarz and his colleagues invited subjects to the lab to complete a questionnaire on life satisfaction. Before they began the task, however, he asked them to photocopy a sheet of paper for him. Half the respondents found a dime on the copying machine, planter there by the experimenter. The minor lucky incident caused a marked improvement in subjects’ reported satisfaction with their life as a whole!”

How fickle, how difficult to define, how easy to please or displease are we fragile human beings. As Kahneman states towards the end of this chapter, in a section entitled ‘The Focusing Illusion’:

“Nothing in life is as important as you think it is when you are thinking about it.”

Finally, probably my favourite chapter concerned our attitudes to our belongings and situations, and how they can change. It also explained how I may well have been lying to myself over the years since finishing university.

It had previously been presumed that humans were rational, economic beings who made decisions solely based on the inherent value of the things they were offered. This, however, had long relied on an unfounded belief that things have innate value. A new theory, called ‘prospect theory,’ threw all of that business into doubt.

Taking two twins, Albert and Ben, Kahneman imagines them with an identical job: low paid and with little time off. They are offered an upgraded position offering either better pay, or more holiday time, and since they (in theory) are equally desirable, they toss a coin to see who gets which. After a while for them to get used to their jobs, they are offered the chance to switch. In purely theoretical terms, it shouldn’t matter whether they switch or not.

This is where things get fun. And important.

“The standard theory…assumes that preferences are stable over time. Positions A and B are equally attractive for both twins and they will need little or no incentive to switch. In sharp contrast, prospect theory asserts that both twins will definitely prefer to remain as they are. This preference for the status quo is a consequence of loss aversion…”

The logic? We attach more importance to things we possess, even for only a short time, than things which are theoretically of equal value: we are averse to losing what we already have. Thus, one twin would refuse to give up his precious free time, even if it is for an equivalent amount of cash moneys; and the other would find it difficult to lose his elevated wages, even if he were compensated with the equivalent amount of ‘vacation’ time.

“This example highlights two aspects of choice…First, tastes are not fixed; they vary with the reference point. Second, the disadvantages of a change loom larger than its advantages, inducing a bias that favors the status quo…”

What are the consequences in real life for all of this?

Ever since finishing university, seeing my friends take jobs as lawyers, accountants, and various other well-paying jobs of differing levels of boredom, I decided to go and have fun for ‘a few years,’ traveling, earning a subsistence wage at various jobs around the world, and having (far) more free time than wages. My theory was that, at any point, I could change course, get a well-paid job, (if I really wanted to), and trade in my nomadic lifestyle.

It turns out I may have been wrong.

And I’m fine with that!