The Undoing Project: A Friendship That Changed Our Minds

by Michael Lewis

He suggested a new definition of the nerd: a person who knows his own mind well enough to mistrust it.

The question the Israeli military had asked him—Which

Which personalities are best suited to which military roles?—had turned out to make no sense. And so Danny had gone and answered a different, more fruitful question: How do we prevent the intuition of interviewers from screwing up their assessment of army recruits? He’d been asked to divine the character of the nation’s youth. Instead he’d found out something about people who try to divine other people’s character: Remove their gut feelings, and their judgments improved. He’d been handed a narrow problem and discovered a broad truth.

People mistook even a very small part of a thing for the whole. Even statisticians tended to leap to conclusions from inconclusively small amounts of evidence.

The power of the belief could be seen in the way people thought of totally random patterns—like, say, those created by a flipped coin. People knew that a flipped coin was equally likely to come up heads as it was tails. But they also thought that the tendency for a coin flipped a great many times to land on heads half the time would express itself if it were flipped only a few times—an error known as “the gambler’s fallacy.”

Even people trained in statistics and probability theory failed to intuit how much more variable a small sample could be than the general population—and that the smaller the sample, the lower the likelihood that it would mirror the broader population.

The world’s not just a stage. It’s a casino, and our lives are games of chance. And when people calculate the odds in any life situation, they are often making judgments about similarity—or (strange new word!) representativeness.

They had a hunch that people, when they formed judgments, weren’t just making random mistakes—that they were doing something systematically wrong.

We are exposed to a lifetime schedule in which we are most often rewarded for punishing others, and punished for rewarding.

They greatly overestimated the odds that they had assigned to what had actually happened. That is, once they knew the outcome, they thought it had been far more predictable than they had found it to be before, when they had tried to predict it. A few years after Amos described the work to his Buffalo audience, Fischhoff named the phenomenon “hindsight bias.”

In his talk to the historians, Amos described their occupational hazard: the tendency to take whatever facts they had observed (neglecting the many facts that they did not or could not observe) and make them fit neatly into a confident-sounding story:

“He who sees the past as surprise-free is bound to have a future full of surprises.”

A false view of what has happened in the past makes it harder to see what might occur in the future.

A part of good science is to see what everyone else can see but think what no one else has ever said.

“That was the moment I gave up on decision analysis,” said Danny. “No one ever made a decision because of a number. They need a story.”

When they made decisions, people did not seek to maximize utility. They sought to minimize regret.

They collected great heaps of data: choices people had actually made. “Always keep one hand firmly on data,” Amos liked to say. Data was what set psychology apart from philosophy, and physics from metaphysics.

When choosing between sure things and gambles, people’s desire to avoid loss exceeded their desire to secure gain.

For most people, the happiness involved in receiving a desirable object is smaller than the unhappiness involved in losing the same object.”

This one they called “framing.” Simply by changing the description of a situation, and making a gain seem like a loss, you could cause people to completely flip their attitude toward risk, and turn them from risk avoiding to risk seeking.

People did not choose between things. They chose between descriptions of things.

Imagination wasn’t a flight with limitless destinations. It was a tool for making sense of a world of infinite possibilities by reducing them. The imagination obeyed rules: the rules of undoing. One rule was that the more items there were to undo in order to create some alternative reality, the less likely the mind was to undo them.