Daniel Kahneman: ‘What would I eliminate if I had a magic wand? Overconfidence’


David Shariatmadari in The Guardian (Photograph: Richard Saker):

His 2011 book, Thinking, Fast and Slow, a primer on a career’s worth of psychological inquiry, won the US National Academy of Sciences book award, and the enthusiastic approval of his peers. It tells the story of “two systems” of thought, one automatic and intuitive, the realm of systematic biases, the other conscious and deliberative. It is a challenging work, clearly written but stuffed even so with difficult problems and counter-intuitive explanations. Despite that, it has sold millions of copies around the world. Nassim Nicholas Taleb, professor of risk engineering and author of The Black Swan, places it “in the same league asThe Wealth of Nations by Adam Smith and The Interpretation of Dreams by Sigmund Freud”.

What’s fascinating is that Kahneman’s work explicitly swims against the current of human thought. Not even he believes that the various flaws that bedevil decision-making can be successfully corrected. The most damaging of these is overconfidence: the kind of optimism that leads governments to believe that wars are quickly winnable and capital projects will come in on budget despite statistics predicting exactly the opposite. It is the bias he says he would most like to eliminate if he had a magic wand. But it “is built so deeply into the structure of the mind that you couldn’t change it without changing many other things”.

The same applies to our habit of predicting stereotypical outcomes at the expense of what’s known about the world. When told of a student, Tom, who has a preference for neat and tidy systems and a penchant for sci-fi, most of us guess that he’s studying computer sciences and not a humanities subject. This is despite the fact that the group studying the latter is far larger. “Think of it this way. A form of stereotyping is involved in understanding the world. So I have a stereotype of a table, I have a stereotype of chairs. Now when you start having stereotypes of social groups, it’s the human mind at work. It’s not a different mind. It’s what you need to get around in the world.” You can slow down and become aware of this, Kahneman believes, but the underlying mechanism isn’t going to change.

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