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Sunday, August 19, 2012

Thinking Fast, Thinking Slow

One of these days, I plan on compiling a list of (non-fiction) books I think everyone should read. Rod Stark's "The Rise of Christianity"will almost certainly be on the list as will Michael Sandel's "Justice" and Michael Lewis's "Money Ball." Another one that will probably make the list (although I haven't finished it yet) is Nobel Prize winner, Daniel Kahneman's, "Thinking, Fast and Slow." It is a bit long, but it is, for the most part, readable, entertaining, and interesting. His recounting of various psychological and social psych experiments are fun to read, and his distinction between what he and others refer to as System 1 and System 2 thinking (and its consequences) is something everyone should know about. All of us would make fewer errors in judgment if we were just aware of how our brain works. Here's a brief description of the two systems:

System 1 is fast, automatic, impulsive, unconscious, intuitive, and is sometimes referred to as the implicit, experiential, associative, or heuristic system. It controls instinctive behaviors that are innately programmed into us and tends to solve problems by relying on prior knowledge and belief. System 2, by contrast, is deliberate and reflective and is sometimes referred to as the explicit, rule-based, rational, or analytic system. It is slower than System 1, but unlike System 1, it is capable of abstract though and is what many of us use when we're asked to solve complex problems. System 2 thinking is valuable, but it involves hard work, is generally slow, and can be wuite tiring, which is why we often rely on System 1.

Most of the time System 1 is efficient and reliable. For example, it is virtually flawless when it comes to understanding one's own language. When someone is speaking to us (in our own language), we cannot help but understand what they're saying. Even if we don't want to, we still understand. This is generally a good thing, because when it comes to conversing with others, we don't want to have to analyze every word that others utter in order to understand what they're saying.

However, System 1 is gullible--it's prone to believe just about anything--and its intuitions are sometimes wrong, which is why we sometimes need System 2 to jump into the mix and as a corrective. Take, for instance, the following puzzle:
  • A ball and bat cost $1.10
  • The bat costs one dollar more than the ball.
  • How much does the ball cost?
What is interesting about this puzzle is that the answer it typically evokes (from System 1) is wrong. For most folks, the answer that initially comes to mind is $.10 (i.e., 10 cents), but if you do the math, the answer is actually $.05. Even those who come up with the correct answer, probably had to resist giving into the intuitive one (unless they heard it before). As Kahneman puts it, "It is safe to assume that the intuitive answer also came to the mind of those who ended up with the correct number--they somehow managed to resist the intuition."

Now consider the following two riddles:
  • If it takes 5 machines, 5 minutes, to make 5 pretzels, how many minutes does it take 100 machines to make 100 pretzels?
The intuitive answer is 100, but the correct answer is 5.
  • In a lake, there's a patch of lily pads. Every day, the patch doubles in size. If it takes 48 days for the patch to cover the entire lake, how long would it take for the patch to cover half of the lake?
The intuitive answer is 24, but the correct answer is 47.

Both of these questions are a little tougher, but just like the bat and ball puzzle, we need System 2 to resist our initial conclusion in order to arrive at the correct answer. Unfortunately, researchers have found that System 2 can be lazy and will often not kick in when we're tired or unaware that it's needed. For example, studies have found that people are more likely to believe the claims of advertisers when they're tired than when they're not (remember, System 1 is gullible and prone to believe just about anything). This is not an issue when System 2 is activated, but when we're tired, it is hard to activate.

Kahneman is a psychologist, but he won the Nobel Prize in Economics because his research has challenged some of the underlying assumptions of classical economic theory. I'll no doubt return to his book in the future. His discussions of priming, anchoring, and the law of small numbers are fascinating. Those stories, however, are for another time.

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