Daniel Kahneman earned the Nobel Prize in economics for the years of work he did with Amos Tversky (who died before the prize was given). Over years, sustained by curiosity and Tversky’s humor, these two and others investigated that age old economics question, what do people want? That old operating assumption, people as rational actors, hasn’t ever been confirmed.
System 1 vs System 2
System 1 thinking operates automatically and quickly with little or no effort and no sense of voluntary control.
System 2 allocates attention to the effortful mental activities that demand it, including complex computations. The operations of System 2 are often associated with the subjective experience of agency, choice, and concentration.
Given this image
even when we know that both segments are the same length, our intuitive self, System 1 still sees the bottom line as longer.
Given the math problem,
A bat and ball cost $1.10.
The bat costs one dollar more than the ball.
How much does the ball cost?
System 1, our intuitive thinking, produces a cost of 10 cents.
How often does our System 2 thinking, which does the checking, get called into play? It only takes a few seconds in this example. More than half of students at Harvard, MIT, and Princeton failed to check their System 1 response. At less selective colleges, failure to check exceeded 80%.
It really doesn’t matter to us much how much the bat costs. But how much effort do most people allocate to issues we do care about, such as the financial integrity of our nation, or climate change?
Answering the wrong question
Often people answer irrelevant questions, or questions very different from what was asked. For example, years ago a chief investment officer of a large financial firm invested tens of millions of dollars in Ford. The question for stock investment is this: is the stock underpriced? The question he answered was this: do I like the product?
And what do you think?
I will prepare a few blogs as I make my way through the book. There are still a few more hundred pages.
a nickel
Yup. And apparently, those willing to check themselves on the small are more willing to check themselves on the large (although this doesn’t mean that there aren’t huge areas of self-blindness from other causes).
When I was a kid, I did brain teasers all the time. My father, a clinical psychology professor with a Phd in child psychology, got me started. He brought me home worksheets, comic books and paperback books full of brain teasers, including the one above. One thing I learned was to look at every possible angle of a problem and that the obvious was usually not the answer.
The paradigm for problem solving I learned was: 1)Identify the problem – this goes along with answering the right question, i.e. make sure you know what the question is. 2)Brain storm, come up with possible solutions. I find that almost no one does this correctly. One rule of brain storming is no evaluation, just come up with ideas. Almost everyone wants to evaluate right off the bat. 3)Select and implement a solution. 4)Evaluate the results. I find almost no one does this either.
I look forward to reading your posts on this. I love learning about approaches to problem solving.
Problem solving, fun!
This book is not about problem solving; it’s about the problems of how we think, and when we think, and what interferes with thinking or substitutes for thinking. The gist is that we think we think more than we actually think.
We discuss great political matters under an assumption that we have actually reasoned our way to our position. I often hear both sides present “logical” arguments that work for the convinced, but don’t persuade those who were neutral or hostile to the ideas. So what were we thinking?
It’s all related. How we think, or don’t, influences the daily challenges we face. I’ll intentionally do something, usually inconsequential, differently or other than the norm just to try to keep my brain from getting in a rut.
The entrance to our parking lot at work has the card activated gates. Some days we have visitors who don’t have cards and we leave the gates permanently up all day. It is easier to enter the parking lot on those days by taking the “out” side, which I do. I’ve yet to see a single other person go in the out. It seems to me it’s important to step outside the bounds ever so often. I marvel that so few seem to.