Noise: A Flaw in Human Judgment
(Little, Brown Spark, $32)
“Why do we all make such bad decisions?” asked Bob Pisani in CNBC.com. One cause, bias, has been a long-standing interest of Nobel Prize winner Daniel Kahneman, a pioneer of behavioral economics and author of the 2011 best-seller Thinking, Fast and Slow. But now Kahneman and two prominent collaborators are calling attention to a stealthier flaw in human decision making: Our judgments vary for causes that should be irrelevant, such as the weather, the time of day, and what we ate for lunch. Or decisions critical to a business or community vary simply because the choice has been left to one individual rather than another. Kahneman and his co-authors call this variability “noise,” and there’s so much of it, said Bryan Appleyard in The Sunday Times (U.K.), “that you will find yourself wondering how we manage to function at all.”
“Noise seems certain to make a mark by calling attention to the problem,” said Steven Brill in The New York Times. The authors highlight how wild and irrational “noisy” variations can be in such realms as criminal sentencing, medical diagnoses, school admissions, and job interviews. Judges tend to pass down stiffer sentences on days following a loss by the city’s NFL team. College admissions officers weigh a candidate’s academic record more heavily on cloudy days than on sunny ones. Some poor decisions cost lives; others cost money or undermine the credibility of important