Elbe New Writ Eames

Elbe New Writ Eames .Book l Review Novembei 2Z 2011 Two Brains Running In the conflict between intuitive and rational decision-making, which side wins? BY JIM HOLT I N 2002, Daniel Kahneman won the Nobel in economic science. What made this unusual — indeed, unique in the history of the-prize — is that Kahneman is a psychologist. Specifically, he Is one-half of a pair of psychologists who. beginning in the early 19/05, set out to dismantle an entity long dear to economic theorists: that arch-rational deciiion maker known as Homo economic- •us, The other half of the dismantling duo. Antos lVersky, died In 19% at the age of 59. Had Tversky lived, he would certainly have shared the Nobel with Kahneman, his longtime collaborator and dear friend. Human Irrationality is Kahneman's great theme. That are essentially three phases to his career In the first, he and Tversky did a series of ingenious experiments that revealed twenty or so "cognitive baser — unconscious MMHG. FAST ASO SLOW By Daniel Kenna 499 pp. Fury. Straus & Giant. $30. errors of reasoning that distort our judgment of the world. Typical of these is the 'anchoring effect": our tendency to be influenced by irrelevant numbers that we happen to be exposed to. (In one experiment, for instance, experienced German judges were inclined to give a shoplifter a Ion ger sentence if they had just rolled a pair of dice loaded to give a high number.) In the second phase, Kahneman and TVersky showed that people making decisions under uncertain conditions do not behave in the way that eco nomic models have traditionally assumed; they do not "maximize utility' The two then d ....Iusa.d an alterna- tive account of decision making, one more faithful to hu- man psychology, which they called "prospect theory.' (It was for this achievement that Kalmernan was awarded the Nobel) In the third phase of his carver, mainly after the death of Wersky, Kaluwman has delved into %Sonic psychology': the science of happiness. its nature and its causes. His findings in this area have proved disquiet- ing — and not just because one of the key experiments involved a deliberately prolonged colonoscopy. "Thinking, Fast and Slow- spans all three of these phas- es. It is an astonishingly rich book: lucid, profound, fulf of intellectual surprises and self-help value. It is consistent- ly entertaining and frequently touching, especially when Kahneman is recounting his collaboration with Tversky. ("The pleasure we found in working together made us exceptionally patient; it is much easier to Strive for per- fection when you are never bored?) So impressive is its vision of flawed human reason that the New York Times columnist David Brooks recently declared that Kahne- man and ryerslirs work "will be remembered hundreds of years from now; and that it is 'a crucial pivot point in the way we see ourselves; They are. Brooks said, 'like the Lewis and Clark of the mind' Now, this worries me a bit A leitmotif of this book is overconfidence. All of us, and especially experts, are prone to an exaggerated sense of how well we under- stand the world — so Kahneman reminds us. Surely, he himself is alert to the perils of overconfidence. Despite all the cognitive biases, fallacies and illusions that he and TWfskY (along with other researchers) Purport to have discovered in the last few decades, he fights shy of the bold claim that humans are fundamentally irrational. Or Goes he? "Most of us are healthy most of the time, and Nalltat's new book "Why Does the World Exist?.; wU be put:tithednextspring. most of our judgments and actions are appropnate most of the time; Kahneman writes In his introduction Yet, just a few pages later, be observes that the work he did with Tversky 'challenged' the idea, orthodox among social sci- entists in the I970s, that 'people are generally rational; The two psychologists discovered 'systematic errors in the thinkuµ of normal people': errors wising not from the corrupting ellecis of wooden: but built into our evolved cognitive machinery. Although Kahneman draws only modest policy implications(e.g,coritracts should be stated in clearer language), others — perhaps overconfidently? — go Much further. Brooks. for example, has argued that Kahneman and Trotsky's work illustrates 'the limits of so- cial policy": in particular. the folly of government action to fight joblessness and turn the Li.vieniw around. Such sweeping conclusions, even if they are not en- dorsed by the author, make me frown. And :frowning — as one learns on Page 152 of this book — activates the skeptic within us: what Kahneman calls 'System 2.* Just putting on a frown. experiments show, works to reduce overconfidence; it causes us to be more analytical. more vigilant in our thinking; to question stones that we would otherwise unreflectively accept as true because they are facile and coherent. And that is why I frowningly gave this extraordinarily interesting book the most skeptical reading I could. System 2, in Kahnernan's scheme, is our stow, deliber- ate. analytical and consciously effortful mode of reason- ing about the world. System I. by contrast is our last, automatic_ intuitive and largely unconscious mode. It is System I that detects hostility in a voice and effortlessly completes the phrase "bread ant " It is System 2 that swings into action when we have to fill out a to form or park a car in a narrow space. (As Kahneman and others have found. there is an easy way to tell how engaged a person's System 2 is during a task; just look into his or her eyes and note how dilated the pupils are.) More generally, System I uses association and meta• phor to produce a quick and dirty draft of reality. which System 2 draws on to arrive at explicit beliefs and rea• EFTA01128843 sorted choices. System I proposes, System 2 &snow& So System 2 would seem to be the boss, right? In principle, yes. But System 2, in addition to being more deliberate and rational. Ls also lazy. And it tires easily. (The vogue term for this is 'ego depletion;) lbo often, Instead of slowing things down and analyzing them, System 2 is content to accept the easy'but unreliable story about the world that System) feeds to it. 'Although System 2 believes itself to be where the action is; Kabneman writes. 'the automatic System I is the hero of this book' System 2 is especially quiescent, It seems, when your mood H a happy one. A Tibia pap, the skeptical reader might wonder how seno. to take all this talk of System I and System 2. Are they actually a pair of little agents in our head, each with its distinctive personal- ty? Not really, Says Kahneman Rather, they are 'Useful fictions" — usefial because they help explain the quirks of the human mind: To see how, consider what Kahneman calls the 'best- known and most controversial' of the experiments he and Tversky did together:- "the Linda problem? Partici- pants in the experiment were told about. an imaginary young woman named Linda, who is single, outspoken and very bright, and who, as a student. was deeply concerned with issues of discrimination and social justice. The par- ticipants were then asked which was more probable: (I) Linda is a bank teller. Or (2) Linda is a bank teller and is active In the feminist movement. The overwhelming re- sponse was that (2) was more probable; in other words. that given the background information furnished. "femi- nist bank teller' was more likely than 'bank teller.' This Is, of course, a blatant violation of the laws of probabil- ity. (Every feminist bank teller Ls a bank teller; adding a detail can only lower the probability) Yet even among students in Stanford's Graduate School of Business, who had extensive training in probability, 85 percent flunked the Linda problem One student, Informed that she had committed an elementary logical blunder, responded, 'I thought you just asked for my opinion." What has gone wrong here? An easy question (how co- herent is the narrative?) is substituted for a more difficult one (how probable is it?). And this, according to Kahne- man, is the source of many of the biases that infect our thinking. System I jumps to an intuitive conclusion based on a 'heuristic' — an easy but imperfect way of answer- ing hard questions — and System 2 lazily endorses this heuristic answer without bothering to scrutinize whether it is logical. Kahneman describes dozens of such experimentally demonstrated breakdowns in ratlonalny — 'base-rate neglect; "availability cascade," 'the illusion of validity' and so on. The cumulative effect is to make the reader despair for human reason. Are we really so hopeless? Think again of the Linda problem. Even the great evolutionary biologist Stephen Jay Gould was troubled by it As an expert in probabil- ity he knew the right answer, yet he wrote that 'a little homunculus in my head continues to jump up and down. shouting at me — 'But shecan't just be a bank teller; read the description*" It was Goad's System I, Kabneman as- sures us, that kept shouting the wrong answer at him. But perhaps something more subtle is going on. Our every- day conversation takes place against a rich background of unstated expectations — what linguists call "Impti. catures? Such implicatures can seep Into psychological experiments. Given the expectations that facilitate our conversation, It may have been quite reasonable for the participants in the experiment to take 'Linda Is a bank clerk' to imply that she was not in addition a feminist. If so, their answers weren't really fallacious. This might seem a minor point. But it applies to sev- eral of the biases that Kabneman and Trersky, along with other investigators, purport to have discovered in formal experiments. In more natural settings — when we are de- tecting cheaters rather than solving logic puzzles; when we are reasoning about things rather than symbols: when we are assessing raw numbers rather than percent- ages— people are fax less likely to make the same errors. So, at least, much subsequent research suggests. Maybe we are not so irrational after all Some cognitive biases, of course, are flagrantly exhib- ited even in the most natural of settings. Take what Kah- neman calls the 'planning fallacy': our tendency to over- estimate benefits and underestimate costs, and hence foolishly to take on risky projects. In 2002, Americans re- modeling their kitchens, for example, expected the job to cost $18,658 on average, but they ended up paying $58,768. The planning fallacy is -only one of the manifestations of a pervasive optimistic bias,' Kahneman writes, which 'may well be the most significant of the cognitive biases' Now, in one sense, a bias toward optimism is obviously bad, since it generates false beliefs — like the belief that we are In control, and not the playthings of luck. But with- out this 'illusion of controL' would we even be able to get out of bed in the morning? Optimists are more pay- The two psychologists discovered `systematic errors in the thinking of normal people.' chologically resilient. have stronger Immune systems, and live longer on average than their more reality-based counterparts. Moreover, as Kahneman notes, exagger- ated optimism serves to protect both individuals and or- ganizations from the paralyzing effects of another bias, 'loss aversion': our tendency to fear losses more than we value gains. It was exaggerated optimism that John May- nard Keynes had in mind when he talked of the 'animal spirits* that drive capitalism. Even if we could rid ourselves of the biases and illusions identified In this book — and Kahneman, citing his own lath of progress In overcoming them, doubts that we can — it is by no means clear that this would make our lives go better. And that raises a fundamental question: What is the point of rationality? We are, after all. Darwinian survivors. Our everyday reasoning abilities have evolved to cope efficiently with a complex and dynamic environ- ment. They are thus likely to be adaptive in this environ- ment. even if they can be tripped up in the psychologist's somewhat artificial experiments. Where do the corms of rationality come from, it they are not an idealization of the way humans actually reason in their ordinary lives? Asa species, we can no more be pervasively biased in our judgments than we can be pervasively ungrammatical in our use of language —or so critics cif research like ICahne- man and Tversky's contend. Kalinetrian never grapples philosophically with the na- ture of rationality. He does, however, supply a fascinating account of what might be taken to be its goal: happiness. What does it mean to be happy? When Kahneman first tor* up this question. In the mid 1990s. most happiness research relied on asking people how satisfied they were with their life on the whole. But such retrospective as- sessments depend on memory. which is notoriously un- reliable. What if, instead, a person's actual experience of pleasure or pain could be sampled from moment to mo- ment. and then summed up over time? Kahneman calls this "experienced' well.being, as opposed to the "remem- bered' well-being that researchers had relied upon. And he found that these two measures of happiness diverge in surpnsmg ways. What makes the 'experiencing self' happy is not the same as what makes the 'remembering self' happy. In particular, the remembering self does not care about duration — how long a pleasant or unpleasant experience lasts. Rather, it retrospectively rates.an expe- rience by the peak level of pain or pleasure in the course of the experience, and by the way the experience ends These two quirks of remembered happiness — "dura. tion neglect' and the 'peak-end rule" — were strikingly illustrated in one of Kahnentana more harrowing experi- ments. two groups of patients were to undergo painful colonoscopies. The patients in Group A got the normal procedure. So did the patients in Group B. except — with- out thee being told — a few extra minutes of mild discom- fort were added after the end of the examination. Which group suffered more? Well. Group B endured all the pain that Group A did, and then some. But since the prolong- ing of Group B's oalonoscopies meant that the procedure ended less painfully, the patients In this group retrospec- tively minded it less. (In an earlier research paper though not in this book, Kahneman suggested that the extra discomfort Group B was subjected to in the experiment might be ethically justified if It Increased their willing- ness to come back for a follow-up!) As with coknoscopies, so too with life. It is the remem- bering self that calls the shots, not the experiencing self Kahneman cites research showing, for example, that a college student's decision whether or-not to repeat a spring-break vacation is determined by the peak-end rule applied to the previous vacation, not by how fun (or mis- erable) it actually was moment by moment. The remem- bering self exercises a sort of 'tyranny' over the voice- less experiencing self. 'Odd as it may seem,' Kahneman writes, - I am my remembering sell, and the experiencing self, who does my living, is like a stranger to me' K y AHNEMAN'S conclusion, radical as it sounds, may not go far enough. There may be no expo, riencing sell at all. Brain-scanning experiments Rafael MaLsch and his colleagues at the Weiz- mann Institute in Israel, for instance, have shown that when subjects are absorbed in an experience, like watch- ing the 'The Good. the Bad, and the Ugly: the parts of the brain associated with sell consciousness are not merely quiet. they're actually shut down ('inhibited') by the rest of the brain. The self seems simply to disappear. Then who exactly is enjoying the film? And why should such egokss pleasures enter into the decision calculus of the remembering self? Clearly, much remains to be done in hedonic psycho) ogy. But Kahneman's conceptual innovations have laid the foundation for many of the empirical findings he re- ports in this book: that while French mothers spend less time with their children than American mothers, they enjoy It more; that headaches are hedonically harder on the poor; that women who live alone seem to enjoy the same level of well-being as women who live with a mate; and that a household income of about 575.000 in high-cost areas of the country is sufficient to maximize happiness. Policy makers interested In lowering the misery index of society will find much to ponder here. . By the time I got to the end of "Thinking, Fast and Slow," my skeptical frown had long since given way to a gran of intellectual satisfaction. Appraiiing the book by the peak- end rule, I overconfidently urge everyone to buy and read it. But for those who are merely interested in Kahnernana takeaway on the Malcolm Gladwell question it is this: If you've had 10.000 hoursof training in a predictable, rapid- feedback environment — chess, (refighting, anesthesiol- ogy — then blink In al/ other cases, think U THE HEW YORK TIMES BOOK REVIEW Ir EFTA01128844