Rational Choice in an Uncertain World Quotes

“Imagine a life without uncertainty. Hope, according to Aeschylus, comes from the lack of certainty of fate; perhaps hope is inherently blind. Imagine how dull life would be if variables assessed for admission to a professional school, graduate program, or executive training program really did predict with great accuracy who would succeed and who would fail. Life would be intolerable—no hope, no challenge.

Thus, we have a paradox. While we all strive to reduce the uncertainties of our existence and of the environment, ultimate success—that is, a total elimination of uncertainty—would be horrific.

Knowing pleasant outcomes with certainty would also detract from life’s joy. An essential part of knowledge is to shrink the domain of the unpredictable. But while we pursue this goal, its ultimate attainment would not be at all desirable.”
― Reid Hastie, Rational Choice in an Uncertain World: The Psychology of Judgement and Decision Making

“Aristotle urged people to seek “the golden mean” between extremes, “moderation in all things” (which we interpret as including moderation in the pursuit of moderation). But why should this golden mean in general be desirable? Clyde Coombs and George Avrunin (1977) have enunciated a very simple principle that implies moderation: “Good things satiate and bad things escalate.”
― Reid Hastie, Rational Choice in an Uncertain World: The Psychology of Judgement and Decision Making

“A more serious consequence of the illusion of control is revealed in our preference for driving over flying. At least part of this irrational—from a survival point of view—habit is due to the fact that we “feel in control” when driving, but not when flying. The probability of dying in a cross-country flight is approximately equal to the probability of dying in a 12-mile drive— in many cases, the most dangerous part of the trip is over when you reach the airport (Sivak & Flannagan, 2003). Gerd Gigerenzer (2006) estimates that the post-9/11 shift from flying to driving in the United States resulted in an additional 1,500 deaths, beyond the original 3,000 immediate victims of the terrorist attacks.”
― Reid Hastie, Rational Choice in an Uncertain World: The Psychology of Judgement and Decision Making

“Sociologist Barry Glassner (1999) has documented many of the biases introduced by “If it bleeds, it leads” news reporting, and by the strategic efforts of special interest groups to control the agenda of public fear of crime, disease, and other hazards. Is an increase of approximately 700 incidents in 50 states over 7 years an “epidemic” of road rage? Is it conceivable that there is (or ever was) a crisis in children’s day care stemming from predatory satanic cults? In 1994, a research team funded by the U.S. government spent 4 years and $750,000 to reach the conclusion that the myth of satanic conspiracies in day care centers was totally unfounded; not a single verified instance was found (Goodman, Qin, Bottoms, & Shaver, 1994; Nathan & Snedeker, 1995). Are automatic-weapon-toting high school students really the first priority in youth safety? (In 1999, approximately 2,000 school-aged children were identified as murder victims; only 26 of those died in school settings, 14 of them in one tragic incident at Columbine High School in Littleton, Colorado.) The anthropologist Mary Douglas (Douglas & Wildavsky, 1982) pointed out that every culture has a store of exaggerated horrors, many of them promoted by special interest factions or to defend cultural ideologies. For example, impure water had been a hazard in 14th-century Europe, but only after Jews were accused of poisoning wells did the citizenry become preoccupied with it as a major problem.
But the original news reports are not always ill-motivated. We all tend to code and mention characteristics that are unusual (that occur infrequently). [...] The result is that the frequencies of these distinctive characteristics, among the class of people considered, tend to be overestimated.”
― Reid Hastie, Rational Choice in an Uncertain World: The Psychology of Judgement and Decision Making

“Decision making is a skill.”
― Reid Hastie, Rational Choice in an Uncertain World: The Psychology of Judgement and Decision Making

“We take the position that research - not anecdotes, not "plausible beliefs", not common sense, and not our everyday experience - should be the basis for understanding and evaluating our decision-making achievements and defeats.”
― Reid Hastie, Rational Choice in an Uncertain World: The Psychology of Judgement and Decision Making

“Cicero believed “luck” determined the success of gambling with essentially random devices. He also apparently understood that there was a relationship between the luck (odds) on a particular throw or set of throws and long-term frequencies. But Cicero was later executed, illustrating that rationality does not guarantee success; it only increases its likelihood. In fact, as pointed out earlier, opting for rationality when others do not can lead to social ostracism.”
― Reid Hastie, Rational Choice in an Uncertain World: The Psychology of Judgement and Decision Making

“Perhaps the fundamental precept of probabilistic analysis is the exhortation to take a bird’s-eye, distributional view of the situation under analysis (e.g., a dice game, the traffic in Boulder, crimes in Pittsburgh, the situation with that troublesome knee) and to define a sample space of all the possible events and their logical, set membership interrelations. This step is exactly where rational analysis and judgments based on availability, similarity, and scenario construction diverge: When we judge intuitively, the mind is drawn to a limited, systematically skewed subset of the possible events. In the case of scenario construction, for example, we are often caught in our detailed scenario—focused on just one preposterously specific outcome path.”
― Reid Hastie, Rational Choice in an Uncertain World: The Psychology of Judgement and Decision Making

“But what if current misery hindsightfully selects and reconstructs memories of childhood to be consistent with a miserable state today? Peter Lewinsohn and Michael Rosenbaum (1987) set out to answer this question with a rare prospective study of over a thousand citizen volunteers.
[...] The results were consistent with the hypothesis that recollection of one’s parents as rejecting and unloving is strongly influenced by current moods; negative recollections were not a stable characteristic of depression-prone people.
[...] This study of depression is important in that it casts doubt on the degree to which adult problems are caused by childhood ones. Given a biasing effect of mood on memory, people who are distressed as adults tend to remember distressing incidents in their childhood. And, if a person also believes that current problems have their roots in early life (perhaps because their therapist told them so), this view itself may serve as an organizing principle to produce even greater distortion of recall (remember the Conway & Ross [1984] study).”
― Reid Hastie, Rational Choice in an Uncertain World: The Psychology of Judgement and Decision Making

“Another situation in which we attend to base rates occurs if people ascribe some causal significance to discrepant rates. When they can see the causal relevance of the base rates, they often incorporate them into their reasoning. For example, the belief that one bus company has more accidents than another because its drivers are more poorly selected and trained will influence mock jurors to take this difference in accident rates into account in evaluating eyewitness testimony; but belief that a bus company has more accidents simply because it is larger will not. Study after study has shown that when these rates are merely statistical as opposed to causal, they tend to be ignored. Exactly the same effect seems to occur in real courtrooms; naked statistical evidence is notoriously unpersuasive.”
― Reid Hastie, Rational Choice in an Uncertain World: The Psychology of Judgement and Decision Making

“Results of a recent survey of 74 chief executive officers indicate that there may be a link between childhood pet ownership and future career success. Fully 94% of the CEOs, all of them employed within Fortune 500 companies, had possessed a dog, a cat, or both, as youngsters.

The respondents asserted that pet ownership had helped them to develop many of the positive character traits that make them good managers today, including responsibility, empathy, respect for other living beings, generosity, and good communication skills. For all we know, more than 94% of children raised in the backgrounds from which chief executives come had pets, in which case the direction of dependency would be negative. Maybe executive success is really related to tooth brushing during childhood. Probably all chief executives brushed their teeth, at least occasionally, and we might imagine the self-discipline thus acquired led to their business success. That seems more reasonable than the speculation that “communication skills” gained through interacting with a childhood pet promote better relationships with other executives and employees.”
― Reid Hastie, Rational Choice in an Uncertain World: The Psychology of Judgement and Decision Making

“As Richard Nisbett and Lee Ross (1980) point out, rationally defensible deductive logic involves a specification from the universal to the particular (“All men are mortal, therefore Robyn Dawes is mortal.”), but much less reliable inductive logic involves generalization from the particular to the universal (“This one Jewish merchant is dishonest, therefore all Jewish merchants are dishonest.”). However, we are prone to do the exact opposite: we under-deduce and over-induce.”
― Reid Hastie, Rational Choice in an Uncertain World: The Psychology of Judgement and Decision Making

“Experts have been revered—and well paid—for years for their “It is my opinion that ... ” judgments. As James March has stated, however, such reverence may serve a purely social function. People and organizations have to make decisions, often between alternatives that are almost equally good or bad. What better way to justify such decisions than to consult an expert, and the more money he or she charges, the better. “We paid for the best possible medical advice,” can be a palliative for a fatal operation (or a losing legal defense), just as throwing the I Ching can relieve someone from regretting a bad marriage or a bad career choice. An expert who constructs a linear model is not as impressive as one who gives advice in a “burst” of intuition derived from “years of experience.” (One highly paid business expert we know constructs linear models in secret.) So we value the global judgment of experts independently of its validity.

But there is also a situational reason for doubting the inferiority of global, intuitive judgment. It has to do with the biased availability of feedback. When we construct a linear model in a prediction situation, we know exactly how poorly it predicts. In contrast, our feedback about our own intuitive judgments is flawed. Not only do we selectively remember our successes, we often have no knowledge of our failures—and any knowledge we do have may serve to “explain” them (away). Who knows what happens to rejected graduate school applicants? Professors have access only to accepted ones, and if the professors are doing a good job, the accepted ones will likewise do well—reinforcing the impression of the professors’ good judgment. What happens to people misdiagnosed as “psychotic”? If they are lucky, they will disappear from the sight of the authorities diagnosing them; if not, they are likely to be placed in an environment where they may soon become psychotic. Finally, therapy patients who commit suicide were too sick to begin with—as is easily supported by an ex post perusal of their files.”
― Reid Hastie, Rational Choice in an Uncertain World: The Psychology of Judgement and Decision Making

“A popular misconception is that decision analysis is unemotional, dehumanizing, and obsessive because it uses numbers and arithmetic in order to guide important life decisions. Isn’t this turning over important human decisions “to a machine,” sometimes literally a computer — which now picks our quarterbacks, our chief executive officers, and even our lovers? Aren’t the “mathematicizers” of life, who admittedly have done well in the basic sciences, moving into a context where such uses of numbers are irrelevant and irreverent? Don’t we suffer enough from the tyranny of numbers when our opportunities in life are controlled by numerical scores on aptitude tests and numbers entered on rating forms by interviewers and supervisors? In short, isn’t the human spirit better expressed by intuitive choices than by analytic number crunching?

Our answer to all these concerns is an unqualified “no.” There is absolutely nothing in the von Neumann and Morgenstern theory — or in this book — that requires the adoption of “inhumanly” stable or easily accessed values. In fact, the whole idea of utility is that it provides a measure of what is truly personally important to individuals reaching decisions. As presented here, the aim of analyzing expected utility is to help us achieve what is really important to us. As James March (1978) points out, one goal in life may be to discover what our values are. That goal might require action that is playful, or even arbitrary. Does such action violate the dictates of either rationality or expected utility theory? No. Upon examination, an individual valuing such an approach will be found to have a utility associated with the existential experimentation that follows from it. All that the decision analyst does is help to make this value explicit so that the individual can understand it and incorporate it into action in a noncontradictory manner.”
― Reid Hastie, Rational Choice in an Uncertain World: The Psychology of Judgement and Decision Making