I was hoping that Michael Lewis’s new book, The Undoing Project: A Friendship That Changed Our Minds, would offer up a bit of post-election escapism. In the book, which is published by W.W. Norton & Company and came out today, Lewis tells the story of Danny Kahneman and Amos Tversky, two Israeli psychologists whose friendship and collaboration changed the way we look at human behavior forever.
Together, the extroverted Tversky and much more withdrawn Kahneman effectively rewrote the rules of psychology, developing behavioral economics, a subfield concerned with human biases in perception and decision-making. By asking countless respondents a never-ending series of questions involving everything from estimates of various figures to their preferences between two bets with different odds and payouts, the researchers realized that all over the place, fields like psychology and economics were operating under false assumptions about how people make judgments and decisions — in many cases because the models in use assumed humans to be more rational and better at calculating than we really are.
It would be hard to imagine an area of psychology with more practical applications: Anywhere human beings make judgments or decisions, behavioral economics matters. Kahneman laid out most of his life’s work in the sensational 2011 book Thinking, Fast and Slow, which is a must-read for anyone interested in behavioral science. In The Undoing Project, Lewis dives deeply into the extremely passionate and sometimes-fraught friendship that spawned that work, tracing the relationship and how Kahneman and Tversky influenced everything from Israeli military policy to how doctors make life and death diagnoses.
It’s a fantastic read, and I relished the opportunity to drift away from the troubled contemporary real world as I read about some of the most important psychological research produced in the 20th century. That is, until I hit this paragraph in the latter part of the book:
In late 1973 or early 1974, Danny gave a talk, which he would later deliver more than once, and which he called “Cognitive Limitations and Public Decision Making.” It was troubling to consider, he began, “an organism equipped with an affective and hormonal system not much different from that of the jungle rat being given the ability to destroy every living thing by pushing a few buttons.” Given the work on human judgment that he and Amos had just finished, he found it further troubling to think that “crucial decisions are made, today as thousands of years ago, in terms of the intuitive guesses and preferences of a few men in positions of authority.” The failure of decision makers to grapple with the inner workings of their own minds, and their desire to indulge their gut feelings, made it “quite likely that the fate of entire societies may be sealed by a series of avoidable mistakes committed by their leaders.”
At this stage in their careers, Kahneman and Tversky imagined that they, and the researchers who would follow them, could play a key role in advising decision-makers of the limitation of their own perceptions and gut impulses. They hoped, as Lewis puts it, “that their work on human judgment would find its way into high-stakes real-world decision making,” in the form of a new science called decision analysis.
Just a few hours before I got to this part, Donald Trump had taken to Twitter to start griping about Chinese trade policy and its military presence in the South China Sea. Why? Who knows. Was it part of a concerted strategy involving the State Department or other experts? Almost certainly not. Based on what we know of Trump and his personality, this seemed to be the “affective and hormonal system” at its worst. As has so often been the case, Trump refused to allow any barrier between his brain and his tweeting thumbs. Now that he’s president-elect, these sorts of tweets will have consequences. The passage jumped off the page at me, screaming TRUMP! TRUMP! TRUMP! in blood red. Jungle-rat brain, indeed …
Kahneman is right, of course, that “the fate of entire societies may be sealed by a series of avoidable mistakes committed by their leaders.” The parent of all these mistakes, at least arguably, is overconfidence in one’s own abilities and perception. Here the divide between Trump and Barack Obama is profound. Say what you will of Obama, he recognized human fallibility: The first president to express active interest in applying cutting-edge behavioral science to his role as chief executive, Obama famously told Lewis that he had decided to wear only two colors of suits to cut down on the potential for “decision fatigue” — a concept straight from the decision-science literature (though part of a cluster of findings facing replication issues) — to color his judgments. Obama also launched the so-called Social and Behavioral Sciences Team, the homepage of which prominently displays this quote from the president: “A growing body of evidence demonstrates that behavioral science insights — research findings from fields such as behavioral economics and psychology about how people make decisions and act on them — can be used to design government policies to better serve the American people …”
Not all leaders are this interested in understanding human biases and how to account for them, unfortunately, as Kahneman and Tversky would soon find out. “Exactly how some decision analyst would persuade any business, military, or political leader to allow him to edit his thinking was unclear,” explained Lewis. It’s a challenging proposition given that “important people didn’t want their gut feelings pinned down, even by themselves.” Soon, Kahneman and Tversky realized that they “found decision analysis promising but ultimately futile,” and moved on to other ways to try to nudge elite decision-making in the correct direction.
Kahneman and Tversky still had many brilliant insights ahead of them, among them so-called prospect theory, their single biggest and likely longest-lasting contribution to our understanding of human decision-making, which netted Kahneman a Nobel Prize in economics in 2002 (Tversky died in 1996, but the Nobel announcement notes his importance in developing the theory with Kahneman). And as the Obama example shows, smart leaders have, in fact, embraced many of these findings. But it’s hard not to wince at the realization that despite all the evidence we now have to the contrary, many leaders are wrongly convinced their own gut impulses and judgments are enough. I suspect we’ll be doing a lot of such wincing in the years to come.