Noise: A Flaw in Human Judgment

by Daniel Kahneman

general mental ability (GMA, the term now used in preference to intelligence quotient, or IQ).

“GMA predicts both occupational level attained and performance within one’s chosen occupation and does so better than any other ability, trait, or disposition and better than job experience.”

grit, defined as perseverance and passion in the pursuit of long-term goals.

Doctors, judges, or senior underwriters are much more educated than the general population and highly likely to score much higher on any measure of cognitive ability.

You might reasonably believe that high GMA makes little difference among them—that it is merely the entry ticket into the pool of high achievers, not the source of achievement differences within that pool. This belief, although widespread, is incorrect.

there are high-GMA individuals in lower-level occupations but almost no people with below-average GMA among lawyers, chemists, or engineers.

mental ability is apparently a necessary condition for gaining access to high-status professions.

not only does the difference in GMA matter between the 99th percentile and the 80th or 50th, but it still matters—a lot!—between the 99.88th percentile and the 99.13th.

cognitive reflection test (CRT),

CRT questions attempt to measure how likely people are to override the first (and wrong) answer that comes to mind

Lower CRT scores are associated with many real-world judgments and beliefs, including belief in ghosts, astrology, and extrasensory perception. The scores predict whether people will fall for blatantly inaccurate “fake news.”

The CRT is seen by many as one instrument to measure a broader concept: the propensity to use reflective versus impulsive thought processes.

People with a high need for cognition tend to be less susceptible to known cognitive biases.

Adult Decision Making Competence scale,

Halpern Critical Thinking Assessment,

The only measure of cognitive style or personality that they found to predict forecasting performance was another scale, developed by psychology professor Jonathan Baron to measure “actively open-minded thinking.” To be actively open-minded is to actively search for information that contradicts your preexisting hypotheses. Such information includes the dissenting opinions of others and the careful weighing of new evidence against old beliefs.

actively open-minded thinking goes beyond that. It is the humility of those who are constantly aware that their judgment is a work in progress and who yearn to be corrected.

this thinking style characterizes the very best forecasters, who constantly change their minds and revise their beliefs in response to new information.

some judges are going to be better than their equally qualified and experienced peers. If they are better, they are less likely to be biased or noisy. Among many things that explain these differences, intelligence and cognitive style matter. Although no single measure or scale unambiguously predicts judgment quality, you may want to look for the sort of people who actively search for new information that could contradict their prior beliefs, who are methodical in integrating that information into their current perspective, and who are willing, even eager, to change their minds as a result.

The personality of people with excellent judgment may not fit the generally accepted stereotype of a decisive leader. People often tend to trust and like leaders who are firm and clear and who seem to know, immediately and deep in their bones, what is right.

“Intelligence is only part of the story, however. How people think is also important. Perhaps we should pick the most thoughtful, open-minded person, rather than the smartest one.”

optimism bias.

Ex ante or preventive debiasing interventions fall in turn into two broad categories.

nudges,

A different type of ex ante debiasing involves training decision makers to recognize their biases and to overcome them.

boosting;

Decades of research have shown that professionals who have learned to avoid biases in their area of expertise often struggle to apply what they have learned to different fields.

The challenge of learning to overcome a bias is to recognize that a new problem is similar to one we have seen elsewhere and that a bias that we have seen in one place is likely to materialize in other places.

status quo bias,

planning fallacy

bias blind spot.

decision observer, someone who watches this group and uses a checklist to diagnose whether any biases may be pushing the group away from the best possible judgment.

We certainly do not recommend that you make yourself a self-appointed decision observer. You will neither win friends nor influence people.

devil’s advocate inside the team and may quickly run out of political capital.

To be effective, decision observers need some training and tools. One such tool is a checklist of the biases they are attempting to detect. The case for relying on a checklist is clear: checklists have a long history of improving decisions in high-stakes contexts and are particularly well suited to preventing the repetition of past errors.

In the United States, federal agencies must compile a formal regulatory impact analysis before they issue expensive regulations designed to clean the air or water, reduce deaths in the workplace, increase food safety, respond to public health crises, reduce greenhouse gas emissions, or increase homeland security. A dense, technical document with an unlovely name (OMB Circular A-4) and spanning nearly fifty pages sets out the requirements of the analysis. The requirements are clearly designed to counteract bias. Agencies must explain why the regulation is needed, consider both more and less stringent alternatives, consider both costs and benefits, present the information in an unbiased manner, and discount the future appropriately.

response, federal officials produced a simple checklist, consisting of just one and one-half pages, to reduce the risk that agencies will ignore, or fail to attend to, any of the major requirements.

a checklist is not an exhaustive list of all the biases that can affect a decision; it aims to focus on the most frequent and most consequential ones.

decision hygiene. When you wash your hands, you may not know precisely which germ you are avoiding—you just know that handwashing is good prevention for a variety of germs

Hygiene measures can be tedious. Their benefits are not directly visible; you might never know what problem they prevented from occurring. Conversely, when problems do arise, they may not be traceable to a specific breakdown in hygiene observance.

Just like handwashing and other forms of prevention, decision hygiene is invaluable but thankless.

Noise is an invisible enemy, and preventing the assault of an invisible enemy can yield only an invisible victory.

Henry Faulds, a Scottish physician, published the first scientific paper suggesting the use of fingerprints as an identification technique.

wherever there is judgment, there must be noise.

occasion noise: the variability between the judgments of the same experts looking at the same evidence twice.

When seeing the prints for the second time, some of the examiners were exposed to additional biasing information about the case.

Dror called this experiment a test of the experts’ “biasability,” because the contextual information supplied activated a psychological bias (a confirmation bias) in a given direction. Indeed, the examiners turned out to be susceptible to bias.

The effect of biasing information is not restricted to the examiner’s conclusion (identification, inconclusive, or exclusion). Biasing information actually changes what the examiner perceives,

the forensic confirmation bias.

asymmetrical cost of possible errors. Because of the very high credibility of fingerprinting, an erroneous identification can have tragic effects. Other types of error are less consequential.