Thinking, Fast and Slow

by Daniel Kahneman

A salient event that attracts your attention will be easily retrieved from memory. Divorces among Hollywood celebrities and sex scandals among politicians attract much attention, and instances will come easily to mind. You are therefore likely to exaggerate the frequency of both Hollywood divorces and political sex scandals. A dramatic event temporarily increases the availability of its category. A plane crash that attracts media coverage will temporarily alter your feelings about the safety of flying. Accidents are on your mind, for a while, after you see a car burning at the side of the road, and the world is for a while a more dangerous place. Personal experiences, pictures, and vivid examples are more available than incidents that happened to others, or mere words, or statistics. A judicial error that affects you will undermine your faith in the justice system more than a similar incident you read about in a newspaper.

Another scholar and friend whom I greatly admire, Cass Sunstein, disagrees sharply with Slovic’s stance on the different views of experts and citizens, and defends the role of experts as a bulwark against “populist” excesses. Sunstein is one of the foremost legal scholars in the United States, and shares with other leaders of his profession the attribute of intellectual fearlessness. He knows he can master any body of knowledge quickly and thoroughly, and he has mastered many, including both the psychology of judgment and choice and issues of regulation and risk policy. His view is that the existing system of regulation in the United States displays a very poor setting of priorities, which reflects reaction to public pressures more than careful objective analysis. He starts from the position that risk regulation and government intervention to reduce risks should be guided by rational weighting of costs and benefits, and that the natural units for this analysis are the number of lives saved (or perhaps the number of life-years saved, which gives more weight to saving the young) and the dollar cost to the economy. Poor regulation is wasteful of lives and money, both of which can be measured objectively. Sunstein has not been persuaded by Slovic’s argument that risk and its measurement is subjective. Many aspects of risk assessment are debatable, but he has faith in the objectivity that may be achieved by science, expertise, and careful deliberation. Sunstein came to believe ...

sciences

“The lawn is well trimmed, the receptionist looks competent, and the furniture is attractive, but this doesn’t mean it is a well-managed company. I hope the board does not go by representativeness.”

Subjects’ unwillingness to deduce the particular from the general was matched only by their willingness to infer the general from the particular.

predictions (both high and

Experts are led astray not by what they believe, but by how they think, says Tetlock. He uses the terminology from Isaiah Berlin’s essay on Tolstoy, “The Hedgehog and the Fox.” Hedgehogs “know one big thing” and have a theory about the world; they account for particular events within a coherent framework, bristle with impatience toward those who don’t see things their way, and are confident in their forecasts. They are also especially reluctant to admit error. For hedgehogs, a failed prediction is almost always “off only on timing” or “very nearly right.” They are opinionated and clear, which is exactly what television producers love to see on programs. Two hedgehogs on different sides of an issue, each attacking the idiotic ideas of the adversary, make for a good show. Foxes, by contrast, are complex thinkers. They don’t believe that one big thing drives the march of history (for example, they are unlikely to accept the view that Ronald Reagan single-handedly ended the cold war by standing tall against the Soviet Union). Instead the foxes recognize that reality emerges from the interactions

Sources of Power

analyses are intended to guide the authorities that commission public projects, by providing the statistics of overruns in similar projects. Decision makers

John Gottman, the well-known expert in marital relations, who observed that the long-term success of a relationship depends far more on avoiding the negative than on seeking the

Neuroeconomists

The

task

A brain region known to be associated with conflict and self-control (the anterior cingulate) was more active when subjects did not do what comes naturally—when they chose the sure thing in spite of its being labeled LOSE. Resisting the inclination of System 1 apparently involves conflict.

Milton Friedman, the leading figure in that school, expressed this view in the title of one of his popular books: Free to Choose.

In 2008 the economist Richard Thaler and the jurist Cass Sunstein teamed up to write a book, Nudge, which quickly became an international bestseller and the bible of behavioral economics.

choice

Whatever else it produces, an organization is a factory that manufactures judgments and decisions. Every factory must have ways to ensure the quality of its products in the initial design, in fabrication, and in final inspections. The corresponding stages in the production of decisions are the framing of the problem that is to be solved, the collection of relevant information leading to a decision, and reflection and review. An organization that seeks to improve its decision product should routinely look for efficiency