I’ve just read one book, and I’m reading another on the subject of thinking. The first, “Think Like a Freak” by Steven D. Levitt and Stephen J. Dubner, was published just a few days ago, was a quick enjoyable read. The one I am part way through is “Thinking Fast and Slow” by Daniel Kahneman, is also readable, but a little heavier going. They both deal with how we think, and among other subjects, how we should think if we want to make better decisions or be more effective.
The first book is the third in a series on “Freakonomics”. The first two books exposed fallacies in the way we look at issues and explain them. For example, there was a marked drop in crime in New York some years ago and many theories were put forth to explain it, some quite plausible.
However, the authors pointed out that approximately 20 years before, the abortion laws in New York had changed, so that many unwanted and un-cared for children were never born, and never grew up to be criminals. It took these authors to point out the relationship, and also many other surprising phenomena.
The purpose of the book (in addition to being highly entertaining) was to point out the ways we can improve our methods of coming to conclusions. The first point is to realize when you don’t know the answer. In one example, children are read a short story and then asked questions about the story. When the information was in the story they mostly got the answer right. When there was no information in the story about the question, the children guessed at an answer instead of saying “I don’t know.” With a little training, other children were able to make assessments of what they knew and didn’t know. For us, that’s a first step.
Another aspect of human behavior is that we respond to incentives, and sometimes those incentives are not so easy to determine. For example in soccer, why does a player taking a penalty kick aim to one side or the other of the goal? To have the highest probability of scoring, right? Well the statistics show that a ball kicked to the center has a higher probability of scoring because the goalie will normally jump to either the right or the left. So why not kick to the center? The answer may be that if the goalie happens to block the shot to the center of the goal, it will make the kicker look really stupid. There is an incentive to miss shooting for the corner rather than to look stupid getting a center shot blocked.
Therefore when designing incentive systems, one must really be on he lookout for unintended consequences, because humans are clever at gaming the system.
The second book, “Thinking Fast and Slow”, gives considerable insight as to how the brain works. The brain appears to have a fast mode, executed by so-called “System 1”, and a slower, more analytical mode, “System 2”. Kahneman says there is a struggle between the intuitive snap judgments made by System 1, which are then processed by System 2, and either confirmed or rejected. The struggle between System 1 and System 2 is constant. He also makes the point that System 2 is “lazy” and will spring into action only when absolutely needed. He gives many examples of fascinating research projects, showing how people’s intuition can be led astray by various forms of prior information.
Both books are fascinating. The second book is more scholarly and at times, heavier going. Written three years earlier, it supports many of the concepts described in the newer book.