Why’d you make that irrational decision?
Michael Lewis continues to explore our fallible judgment
As rational human beings, we’re finally beginning to accept that we’re not very rational at all. We make dumb decisions based on fallible judgments shaped by our personal biases and preconceptions. Ignoring sound data, we trust our gut, which is often wrong, or we use all sorts of irrelevant criteria in deciding which jam to buy, what job to take, who to marry or where to invest.
So-called experts do it too, from bankers and sports managers to political pundits and journalists.
Then, when faced with an outcome we didn’t predict — say, the recent triumphs of Brexit, Donald Trump, the Chicago Cubs or the Ottawa Redblacks — we look back and impose a false order on random events to persuade ourselves that the outcome was predictable all along.
Author Michael Lewis explores these phenomena, and the two psychologists who popularized them, in The Undoing Project: A Friendship that Changed Our Minds.
Lewis has already written about the fallibilities of human judgment, and the people who profited thereby, in Moneyball and The Big Short, two bestsellers turned into blockbuster movies.
But a question kept nagging at him: why do our minds keep leading us astray?
As with his other books, Lewis has found a compelling way to convey complex information — through storytelling that focuses on real characters.
And boy, are these two psychologists characters. Amos Tversky and Daniel Kahneman met 40 years ago when they were teaching psychology at Hebrew University in Israel. They were radical opposites.
Tversky was a supremely confident, funny, Israeli-born optimist, the life of every party.
Paris-born Kahneman, who as a child fled the Holocaust, was a shy, insecure pessimist who didn’t go to parties.
But both were fascinated by how people functioned and were searching for simple, powerful truths.
The two clicked, and their relationship exploded into a platonic, synergistic bro- mance bursting with thrillingly novel ideas.
Together they developed groundbreaking insights into the emerging field of decision analysis.
Kahneman and Tversky brilliantly explored why humans are so poor at fully analyzing complex situations.
We’re too eager to see what we expect but overlook what we don’t expect. We have an irrational need to impose patterns in times of uncertainty, when no order exists. Sometimes we illogically avoid risk, while other times we seek it.
The two men were so intellectually connected they finished each other’s sentences. They sat together at the same typewriter to write their scientific papers.
“We also kept surprising each other,” Kahneman recalls. “It still gives me goose bumps.”
Outsiders — and everyone else was an outsider, including their wives — would frequently hear the two men talking, shouting in a mix of Hebrew and English or, more often, laughing.
“What they were like, in every way but sexually, was lovers,” Lewis writes.
Like many wildly passionate relation- ships, this one, sadly, flamed out. Tversky died 20 years ago. But their ideas caught fire and their findings have far-reaching effects today in fields from sports management to economic theory. In 2002 Kahneman, now 82, received the Nobel Prize in economics, rare for a psychologist.
Author Lewis, who’s American, includes some intriguing Canadian connections. Kahneman taught for a time at the University of British Columbia. There’s also a chapter on Toronto physician-scientist Dr. Don Redelmeier of Sunnybrook Health Sciences Centre, who collaborated with Tversky on studies of medical misjudgments.
“Most physicians try to maintain this façade of being rational and scientific and logical, and it’s a great lie,” says Redelmeier, a comment that’s more than a little disturbing.
And wait till you read what Kahneman says about the fate of societies precariously balanced on the flawed intuition of a few leaders. The Undoing Project does a fine job of making us think, and rethink, about how we think. Marcia Kaye (marciakaye.com) is a frequent contributor to these pages.