Daniel Kahneman, RIP…
Here is a WaPo obituary. For the curious, here is my (earlier) Conversation with Daniel Kahneman. Here are earlier posts on him.
Daniel Kahneman: ‘Everything I’ve done has been collaborative’
As I wave my plate of paella in front of the webcam, Daniel Kahneman drops the bombshell.
“I have had my lunch.”
Awkward.
A lunch over Zoom was never an especially appetising prospect, and perhaps it was too much to expect Kahneman to play along. He is, after all, 87 years old, a winner of the Nobel Memorial Prize in economics — despite being a psychologist — and, thanks to the success of his 2011 book Thinking, Fast and Slow, vastly more famous than most of his fellow laureates. For the sake of form I ask him to describe the lunch. “Well, I had sashimi salad and shumai from a restaurant, and to be absolutely complete and precise, I had a baked apple which I baked myself.” He raises his chin in defiance, then smiles impishly. “And that was my lunch. It was fine. Not exceptional, but it was fine.” I set my paella to one side; I am somewhat relieved. A webcam lunch promised to be as cognitively taxing as the time the FT asked me to interview the Freakonomics co-author Steven Levitt while losing to him at poker, or teach Kahneman’s biographer Michael Lewis a board game while interviewing him about The Big Short. Kahneman turns the tables on me and asks if I enjoy the challenge of juggling such tasks with an interview. Suddenly there is a slight hint of the psychotherapist about him, reinforced by his charmingly gentle Israeli accent, which is distinct even after decades living in North America. Kahneman’s life and career defy summary. He was born while his mother was visiting Tel Aviv in 1934; his family lived in Paris and, as Jews, spent the war on the run and survived several close brushes with the Third Reich. His father died in 1944, of natural causes, and the family moved to Jerusalem in 1946. Kahneman trained as a psychologist and became, in Lewis’s words, “a spectacularly original connoisseur of human error”. He formed an intense, productive and tempestuous intellectual partnership with Amos Tversky. The two men worked on judgment, decision-making and risk, laying the foundations for what became known as behavioural economics — and for Kahneman’s Nobel in 2002, after Tversky’s early death. His fame has only grown since then, partly as behavioural economics has become fashionable, partly because his own work moved into another popular field, the psychology of wellbeing, and largely as the result of the blockbuster success of Thinking, Fast and Slow.
I tell him that, courtesy of that book, I have already had a memorably wonderful meal in his company. A few years ago, while travelling on business, I found myself a table for one in a Munich beer hall. I ate too many sausages and too much potato salad, drank a couple of excellent beers, and all while reading Thinking, Fast and Slow. It was one of those moments when you find yourself making a mental note that you are having a wonderful time.
Kahneman looks delighted. “I take that as a compliment, that I added to the food.” That book described the mind’s “System 1” and “System 2”. System 1 is intuitive, effortless, while System 2 requires conscious, deliberate and effortful calculation.
I ask why the book was such a publishing phenomenon. Kahneman gives credit to his editor and also to the way the argument of the book was framed early on, with the two types of thinking described as though they were tiny decision-making agents inside each person’s brain. “This is appealing in two ways. It corresponds to an experience people have, that some thoughts happen to them and other thoughts they produce. And the idea of presenting it as agents.” Kahneman admits that this presentation violates the traditions of academic psychology: you’re not supposed to appeal to homunculi inside the brain. It is just a metaphor, but some professional psychologists hate it. “And the people who don’t like it feel free to despise it.”
But mostly Kahneman credits chance for the success of Thinking, Fast and Slow. Sometimes a book catches on and its popularity becomes a self-reinforcing loop. Things could easily have turned out differently. It is a modest claim, but it does neatly lead us to his new book, Noise, written with Olivier Sibony, a business school professor and former McKinsey partner, and Cass Sunstein, who is a law professor, co-author of Nudge and has been an official in both the Obama and Biden administrations.
There is a medication for noise. I mean, if you average many judgments, noise will go down Kahneman has spent much of his life studying bias in decision-making, but noise is the other source of error. If you imagine firing arrows at a paper target, bias would be a systematic tendency for the arrows to land (say) below the bullseye. Noise would be a tendency for the arrows to err in any direction, purely at random. In some ways, noise is easier to detect. You can measure it from the back of the target, without knowing where the bullseye is. And yet noise is often overlooked. From the viewpoint of a social scientist, this oversight is understandable. Bias feels like the thing to observe, while noise is the fog obscuring the view.
Experimental methods are designed to remove noise to allow bias to be measured more clearly. But noise is not merely an obstacle to scientific inquiry: it has real-world effects too. Kahneman and his colleagues point to insurance underwriters, judges, child-custody case managers, recruiters, patent examiners and forensic scientists, all of whom act in a way that varies from one professional to another, and between different situations, effectively at random. It is not a problem to be assumed away. So why do we pay so little attention to noise and so much attention to bias? The problem, says Kahneman, is that we think causally, about individual cases.
You can observe bias in an individual case, but to observe noise one must measure — or at least imagine — multiple cases playing out in different ways. Can we reduce noise, I ask? Certainly. “There is a medication for noise. I mean, if you average many judgments, noise will go down . . . if the judgments are independent, that’s guaranteed.” But getting a second and a third opinion is expensive. And we often unconsciously suppress evidence of noise. “People prefer their sources of information to be highly correlated. Then all the messages you get are consistent with each other and you’re comfortable.”
For example, when professors mark student exam booklets, they will often let the student’s performance on the first essay influence their judgment of the second and the third. Kahneman advises a different procedure.
Thinking, Fast and Slow and Noise have been packaged to appear as siblings