Noise: A Flaw in Human Judgment

by Daniel Kahneman

In short, decision makers like to listen to their gut, and most seem happy with what they hear. Which raises a question: what, exactly, do these people, who are blessed with the combination of authority and great self-confidence, hear from their gut? One review of intuition in managerial decision making defines it as “a judgment for a given course of action that comes to mind with an aura or conviction of rightness or plausibility, but without clearly articulated reasons or justifications—essentially ‘knowing’ but without knowing why.” We propose that this sense of knowing without knowing why is actually the internal signal of judgment completion that we mentioned in chapter 4. The internal signal is a self-administered reward, one people work hard (or sometimes not so hard) to achieve when they reach closure on a judgment.