El enigma de la experiencia frente a la memoria - The riddle of experience vs. memory. Daniel Kahneman

Don’t Blink! The Hazards of Confidence. Daniel Kahneman

Many decades ago I spent what seemed like a great deal of time under a scorching sun, watching groups of sweaty soldiers as they solved a problem. I was doing my national service in the Israeli Army at the time. I had completed an undergraduate degree in psychology, and after a year as an infantry officer, I was assigned to the army’s Psychology Branch, where one of my occasional duties was to help evaluate candidates for officer training. We used methods that were developed by the British Army in World War II.

One test, called the leaderless group challenge, was conducted on an obstacle field. Eight candidates, strangers to one another, with all insignia of rank removed and only numbered tags to identify them, were instructed to lift a long log from the ground and haul it to a wall about six feet high. There, they were told that the entire group had to get to the other side of the wall without the log touching either the ground or the wall, and without anyone touching the wall. If any of these things happened, they were to acknowledge it and start again.

A common solution was for several men to reach the other side by crawling along the log as the other men held it up at an angle, like a giant fishing rod. Then one man would climb onto another’s shoulder and tip the log to the far side. The last two men would then have to jump up at the log, now suspended from the other side by those who had made it over, shinny their way along its length and then leap down safely once they crossed the wall. Failure was common at this point, which required starting over.

Read full in The New York Times.

Is self-knowledge overrated? Jonah Lehrer

Daniel Kahneman, a Nobel Prize-winning psychologist and the author of the new book “Thinking, Fast and Slow,” changed the way people think about thinking by asking them questions. They weren’t trick questions, either. Instead, Kahneman relied almost exclusively on straightforward surveys, in which he described various scenarios. Here’s a sample:

The U.S. is preparing for the outbreak of an unusual Asian disease, which is expected to kill 600 people. Two alternative programs to combat the disease have been proposed. If program A is adopted, 200 people will be saved. If program B is adopted, there is a one-third probability that 600 people will be saved and a two-thirds probability that no people will be saved. Which of the two programs would you favor?

When Kahneman put this question to a few hundred physicians, seventy-two per cent chose option A, the safe-and-sure strategy. Most doctors would rather save a certain number of people for sure than risk the possibility that everyone might die.

Now consider this scenario:

The U.S. is preparing for the outbreak of an unusual Asian disease, which is expected to kill 600 people. Two alternative programs to combat the disease have been proposed. If program C is adopted, 400 people will die. If program D is adopted, there is a one-third probability that nobody will die and a two-thirds probability that 600 people will die. Which of the two programs would you favor?

The two different hypotheticals, of course, examine identical dilemmas: saving one-third of the population is the same as losing two-thirds. And yet, doctors reacted very differently depending on how the question was framed. When the possible outcomes were stated in terms of deaths (and not survivors), physicians were suddenly eager to take chances: seventy-eight per cent chose option D.

Read full in The New Yorker.

The Science of Irrationality. Jonah Lehrer

Here's a simple arithmetic question: "A bat and ball cost $1.10. The bat costs $1 more than the ball. How much does the ball cost?"

The vast majority of people respond quickly and confidently, insisting the ball costs 10 cents. This answer is both incredibly obvious and utterly wrong. (The correct answer is five cents for the ball and $1.05 for the bat.) What's most impressive is that education doesn't really help; more than 50% of students at Harvard, Princeton and the Massachusetts Institute of Technology routinely give the incorrect answer.

Daniel Kahneman, a Nobel Laureate and professor of psychology at Princeton, has been asking questions like this for more than five decades. His disarmingly simple experiments have profoundly changed the way that we think about thinking. While philosophers, economists and social scientists had assumed for centuries that human beings are rational agents, Mr. Kahneman and his scientific partner, the late Amos Tversky, demonstrated that we're not nearly as rational as we like to believe.

When people face an uncertain situation, they don't carefully evaluate the information or look up relevant statistics. Instead, their decisions depend on mental short cuts, which often lead them to make foolish decisions. The short cuts aren't a faster way of doing the math; they're a way of skipping the math altogether.

Read full in The Wall Street Journal.

Adam Smith Kahneman. Donald Boudreaux

David Brooks properly applauds Daniel Kahneman, the late Amos Tversky, and other behavioral economists (“Who You Are,” Oct. 21).  But it’s untrue that “Before Kahneman and Tversky, people who thought about social problems and human behavior tended to assume that we are mostly rational agents.”

While too many economists – from George Stigler on the right to Paul Samuelson on the left – committed the methodological offense of assuming a wholly unreasonable degree of human reasonableness, the single most significant economist of all time did not: Adam Smith.  One can’t read Smith’s works without recognizing that the father of economics was acutely aware that people’s mental processes routinely deviate from what later economists defined as “rational.”*

And the fact that Smith was a behavioral economist long before behavioral economics was cool is significant.  It reveals that an understanding of human foibles, passions, and cognitive quirks does not (contrary to today’s irrational presumption) necessarily strengthen the case for greater government intervention.  Smith, remember, strongly advocated keeping markets free.  He did so not because free markets are perfect or because individuals are “rational,” but because free markets are less imperfect than regulated ones and because he wisely distrusted any of us disposition-effected, loss-averting, confirmation-biased, hyperbolic-discounting, and otherwise foible-infected humans with the power to order each other about.

Read full letter in Cafe Hayek.