576.    Noise: A Flaw in Human Judgment

Rating:  ☆☆☆1/2

Recommended by:

Author:    Daniel Kahneman, Olivier Sibony, Cass R. Sunstein

Genre:   Non Fiction, Science, Business, Sociology, Economics, Psychology

454 pages, published May 18, 2021

Reading Format:   Book

Summary

In Noise, Economist, Social Scientist and Nobel prize winner Daniel Kahneman, along with Olivier Sibony and Cass Sunstein, explore the concept of noise, i.e. why most people make bad judgments, and how to correct for it.​  Noise is the variation in outcomes due to human decision making.  For example, when two different claims adjusters at the same insurance company come to radically different conclusions on the value of the same claim.  While noise contributes to significant errors in a diverse spectrum of fields, the individuals and organizations making decisions are usually unaware of the role played by chance in their judgments and in their actions.

Quotes 

“To understand error in judgment, we must understand both bias and noise.”

 

“wherever there is judgment, there is noise—and more of it than you think.”

 

“Bias and noise—systematic deviation and random scatter—are different components of error.”

 

“Judgment can therefore be described as measurement in which the instrument is a human mind.”

 

“There is at least one source of occasion noise that we have all noticed: mood.”

 

“When physicians are under time pressure, they are apparently more inclined to choose a quick-fix solution, despite its serious downsides.”

 

“Averaging two guesses by the same person does not improve judgments as much as does seeking out an independent second opinion. As Vul and Pashler put it, “You can gain about 1/10th as much from asking yourself the same question twice as you can from getting a second opinion from someone else.” This is not a large improvement. But you can make the effect much larger by waiting to make a second guess.”

 

“When Vul and Pashler let three weeks pass before asking their subjects the same question again, the benefit rose to one-third the value of a second opinion.”

 

 “Herzog and Hertwig then averaged the two estimates thus produced. Their technique, which they named dialectical bootstrapping, produced larger improvements in accuracy than did a simple request for a second estimate immediately following the first. Because the participants forced themselves to consider the question in a new light, they sampled another, more different version of themselves—two “members” of the “crowd within” who were further apart. As a result, their average produced a more accurate estimate of the truth. The gain in accuracy with two immediately consecutive “dialectical” estimates was about half the value of a second opinion.”

 

 “A study of thousands of juvenile court decisions found that when the local football team loses a game on the weekend, the judges make harsher decisions on the Monday (and, to a lesser extent, for the rest of the week). Black defendants disproportionately bear the brunt of that increased harshness. A different study looked at 1.5 million judicial decisions over three decades and similarly found that judges are more severe on days that follow a loss by the local city’s football team than they are on days that follow a win.”

 

 “Vul and Pashler drew inspiration from the well-known phenomenon known as the wisdom-of-crowds effect: averaging the independent judgments of different people generally improves accuracy. In 1907, Francis Galton, a cousin of Darwin and a famous polymath, asked 787 villagers at a country fair to estimate the weight of a prize ox. None of the villagers guessed the actual weight of the ox, which was 1,198 pounds, but the mean of their guesses was 1,200, just 2 pounds off, and the median (1,207) was also very close. The villagers were a “wise crowd” in the sense that although their individual estimates were quite noisy, they were unbiased. Galton’s demonstration surprised him: he had little respect for the judgment of ordinary people, and despite himself, he urged that his results were “more creditable to the trustworthiness of a democratic judgment than might have been expected.”

 

“Most organizations prefer consensus and harmony over dissent and conflict. The procedures in place often seem expressly designed to minimize the frequency of exposure to actual disagreements and, when such disagreements happen, to explain them away.”

 

“Some judgments are biased; they are systematically off target. Other judgments are noisy, as people who are expected to agree end up at very different points around the target. Many organizations, unfortunately, are afflicted by both bias and noise.”

 

“In a negotiation situation, for instance, good mood helps. People in a good mood are more cooperative and elicit reciprocation. They tend to end up with better results than do unhappy negotiators.”

 

“On the other hand, a good mood makes us more likely to accept our first impressions as true without challenging them.”

 

“As you can guess, this is a test of the readers’ vulnerability to stereotypes: do people rate the essay more favorably when it is attributed to a middle-aged man than they do when they believe that a young woman wrote it? They do, of course. But importantly, the difference is larger in the good-mood condition. People who are in a good mood are more likely to let their biases affect their thinking.”

 

“Inducing good moods makes people more receptive to bullshit and more gullible in general; they are less apt to detect deception or identify misleading information. Conversely, eyewitnesses who are exposed to misleading information are better able to disregard it—and to avoid false testimony—when they are in a bad mood.”

 

“However, when the subjects were placed in a positive mood—induced by watching a five-minute video segment—they became three times more likely to say that they would push the man off the bridge. Whether we regard “Thou shalt not kill” as an absolute principle or are willing to kill one stranger to save five should reflect our deepest values. Yet our choice seems to depend on what video clip we have just watched.”

 

“A study of nearly seven hundred thousand primary care visits, for instance, showed that physicians are significantly more likely to prescribe opioids at the end of a long day.”

My Take

While Noise is a bit on the dense side, it did introduce me to some new concepts and change the way I look at the world.  For a non-fiction book, that is high praise.