How Rational Are Our Choices?

A rational person might take a few light reads when they go on vacation, but instead I chose to read Daniel Kahneman’s Thinking Fast and Slow. One downside to a Kindle is you don’t really get a sense of the physicality of a book. Kahneman, a cognitive psychologist, won the Nobel for economics in 2002. His book delves into his life’s research.

First, he describes the two different systems at play in our brains: 1) Fast thinking, which is automatic, subconscious, emotional, and requires very little effort. 2) Slow thinking which is conscious, requires much effort, is more logical, and is deliberate. He provides plenty of evidence of why we might overestimate human judgement, and in general, we do not make very rational choices. In test after test, human subjects mostly fail to think statistically and don’t do the math. The final part of his book discusses his research on happiness. Our minds on that topic are also divided. We can measure our happiness by our experiences, but what dominates our own perception of happiness is how we remember the peak and valleys of the pain and pleasures.

It’s not a light read like one of Malcolm Gladwell’s book that pieces together research of other people. Rather, it’s an intriguing account (and sometimes memoir) of his own research on how we think. I highly recommend it. Thinking Fast and Slow is a difficult book to summarize or review, so I’ll simply link to a couple of of them:

Here is the WSJ’s review and the NYTimes review.

There’s one simple math question in his book used as an example that I like:

A ball and a bat together cost $1.10. The bat cost a dollar more than the ball. How much does the ball cost?

Over 50% of Harvard and M.I.T. students got this wrong. Why? They did not bother to check. They relied on their intuition that happened to deceive them.

After writing about our divided brains with two systems, Kahneman says that these systems of thinking aren’t really separate but it’s important to be aware of those two systems. It’s amazing how irrational some of our own decisions are. Kahneman suggests that we approach our thoughts as an outsider at times. It will help us lower our overconfidence and reduce many of our own invisible biases. As we become more aware of how we think and when we should tap into deeper thinking, I hope we can help our students to do the same. 

Here’s a TED talk he gave a couple of years ago.

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2 thoughts on “How Rational Are Our Choices?

  1. Exceptional people are those whose intuition turns out to be correct. Many times we don’t have time to “think things through”. One example would be a successful general (the other kind rarely make it past Lieutenant).

    A little algebra would have helped with the “bat and ball” problem. It’s cleverly worded to deceive the unwary.

    The Amazon reviews suggest this might be an essential book to read. (But that’s just my “Fast Thinking ” mode).

  2. I think many people make irrational choices because they “feel good” doing it. An example would be smoking since everyone knows the health risks of that behaviour yet many still do it.

    There are many games where the optimal strategy isn’t the most rational one and vice versa. I would recommend you to look up game theory and some games such as “Prisoner’s Dilemma”, “Dollar Auction”, and “Guess 2/3 the Average”.
    http://en.wikipedia.org/wiki/List_of_games_in_game_theory

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