Thinking fast and slow

Kahneman FTW: “When faced with a difficult question, we often answer an easier one instead, often without noticing the substitution.”

I’m somewhat embarrassed to report that it’s taken me this long to get around to reading Daniel Kahneman’s book. I’m only a chapter into it, but the prose is a delight. Favorite sample so far:

“When faced with a difficult question, we often answer an easier one instead, often without noticing the substitution.”

Author: Mark Kleiman

Professor of Public Policy at the NYU Marron Institute for Urban Management and editor of the Journal of Drug Policy Analysis. Teaches about the methods of policy analysis about drug abuse control and crime control policy, working out the implications of two principles: that swift and certain sanctions don't have to be severe to be effective, and that well-designed threats usually don't have to be carried out. Books: Drugs and Drug Policy: What Everyone Needs to Know (with Jonathan Caulkins and Angela Hawken) When Brute Force Fails: How to Have Less Crime and Less Punishment (Princeton, 2009; named one of the "books of the year" by The Economist Against Excess: Drug Policy for Results (Basic, 1993) Marijuana: Costs of Abuse, Costs of Control (Greenwood, 1989) UCLA Homepage Curriculum Vitae Contact: Markarkleiman-at-gmail.com

17 thoughts on “Thinking fast and slow”

  1. I consider Kahneman’s book an intellectual blockbuster, with huge implications for many of the areas we discuss on this blog.

  2. I was a little dissapointed in the book actually. Its not my area but neurologists I spoke to about it said it was a gross simplification that doesn’t include newer research, and I thought it really ran out of steam after the first few chapters. I’d like to see an informed discussion including some other people in the field.

    1. I know from hearing a talk he gave last year that Baruch Fischhoff thinks very highly of it, if that is something that means anything to you.

  3. My favourite recent quotation comes from that book:

    “One cockroach ruins a bowl of cherries, but one cherry does nothing to improve a bowl of cockroaches.”

    The idea behind the aphorism is that the value function of gains and losses can be characterised by four general features: firstly, in the domain of gains, humans favour risk aversion. Secondly, this value function is inverted in the domain of losses, whereby people favour risk-seeking. Thirdly, the function is more pronounced for losses than it is for gains; moreover, the strength of this differential can be quantified by a factor of roughly 2 to 2.5. Fourthly, the value functions in both domains – gains as well as losses – can be assessed using similar exponents.

    Such complexity, all neatly wrapped up in a simple quotation. Kahneman’s a master.

    1. If this is simplistic I guess I will have to ask for my money back for my PhD. I ran out of fingers and toes checking terms that sorely needed definition. Sorry.

      1. The cockroach sentence is the “simple quotation.” Usually that’s clear from the quotation marks. If you didn’t notice them, then yes, you might want to ask for your money back for your PhD.

        The paragraph that appears thereafter explains the research underlying the quotation. That is the part that has “complexity.”

        1. I’m sorry, that was unnecessarily catty. It seems finals week has, to borrow Kahneman’s language, “depleted my ego.” My apologies for being discourteous.

          1. Cats and cattiness don’t much affect me, I just bark at them, but apology accepted. Where I was going in my remark was more a comment on plonking, that form of academic discourse which takes very simple if not trite observations and turns them into opacities. If I gather what you are saying, when times are good, we don’t want to change, but when they are bad, we are willing to take risks to change them, but then I may be guilty a Shavian bllunder the following quote points out.

  4. Or, to quote Bertrand Russell (I don’t dare paraphrase), “A stupid man’s report of what a clever man says can never be accurate, because he unconsciously translates what he hears into something he can understand.”

  5. Worth reading very slowly, pausing after each short chapter to digest and look for examples. Great book.

    Meanwhile, heard a great saying at a banquet the other night that reminded me of Kahneman’s book, by the poor soul who ran the Oregon State Pen for the last two executions (both “volunteers” who dropped their appeals): “At a minimum, government should never be involved in pursuing a policy that cannot be shown to work.”. As true for the drug war as for the death penalty.

    (The banquet was attended by two former Chief Justices of the Oregon Supreme Court, both of whom have started to speak out against “this most premeditated of murders,” along with a guy who was just let off death row and freed entirely after eleven years, and aso the cop who was the head of “Corrections” when the two executions occurred. In other words, a pretty deep lineup of guys (all guys) who have had to decide death appeals or carry out executions, and all have become committed to abolition of the death penalty.)

    Now that we’re seeing increased recognition of the need for evidence based medicine to counter the thinking errors we fall into so readily, it would be nice if we could have evidenced based sentencing guidelines applied by smart, thoughtful people trained in how to avoid falling into System I thinking when System II is needed.

  6. I only wish Kahneman had given more credit to his great precursor Francis Bacon, and his theory of four types of mental “idols”. Since Bacon did no follow his own experimental prescription – as Kahneman does – the theory is only a picturesque and suggestive typology. It could have served as a warning to his successors in the scientifis project, but was forgotten.

  7. Mark:

    I’ll be interested to hear whether you come to share my sense that Kahneman draws too many hard-and-fast conclusions from what remains a fairly small sample of experiments (the findings of some of which, e.g., the endowment-effect experiments have been challenged on methodological grounds).

    I also was troubled that he never asked, let alone answered a fundamental question raised by his thesis: Do people expend more cognitive resources on problems as the stakes rise (assuming they have the time to cogitate)?

    Best.

    Dan

    1. This is an area of current research at the intersections of cognitive psych, comparative psych and neuroscience. Books are always out-of-date.

  8. Cass Sunstein, who recently ran the Office of Information and Regulatory Affairs in D.C., draws heavily on Kahnemann in his books ‘Nudge’ (2008)(with Richard Thaler) and the recent sequel, ‘Simpler’. He has been trying to get regulators to use behavioral analysis to figure out how to get people to do desirable things without actually forcing them by law to do so. As someone who works in law reform, I have found both Kahnemann and Sunstein very stimulating.

    1. I am just a bystander and not a regulator or economist, but I’ve been wondering lately, does anyone try to apply the HOPE style instant feedback to regulation? And what if you added carrots to it, and not just sticks? I ask because I hear a lot about how businesses are overregulated, but when you ask, okay what would you get rid of?, you get an answer like, well the wage and hour laws are too strict.

      Of course, no one’s going to get rid of those, since there’s evidence that in small businesses, workers are getting ripped off right and left. Whereas, bigger established companies mostly figured out how not to do that and still make money. But do they get any reward for that? Any letup in some annoying but not so crucial reporting requirement? I just wonder, which parts of regulations are just annoying, and which ones are essential? The eternal question I guess. But people seem sincerely to feel frazzled and hassled in California at least, if not actually overtaxed. They just *feel* that way. (I’ve not been sold on the overtaxedness, at any rate.) But the frustration/hassle factor seems real enough. And if you’re not someone who’s breaking the rules, couldn’t there be some non-monetary reward for that? Just my armchair wonderings.

  9. MK – I found it one of the great books of the last ten years. Wait till you get to “WYSIATI.” My favorite part, along with the aforementioned cockroach/bowl of cherries observation which is the equal of many of the great sayings in history.

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