Thinking fast and Slow
We human beings can’t stop thinking. If everything is dependent
on the way we think, the ‘Thinking’ needs thinking. This book presents
understanding of judgments and the decision making processes shaped by
psychological discoveries of recent decades. We need thinking while perceiving,
analyzing, deciding and judging. This book exposes lot of flaws in the routine thinking
and gives us an opportunity to use better ways while thinking.
Daniel has mentioned
two systems in the mind, System 1 and System 2.
System 1 operates
automatically and quickly, with little or no effort and no sense of voluntary
control. Try to fill in the blanks.
“Ganpati Bappa _____ ? ,
2 x 2 = ___ ?,
The answers to the two questions are given by system 1 of
our thinking. The answers almost came automatically to our mind. System 1 is
involved in all the perceptions we carry, judgements we make, association we do
in our thinking process. System 2 allocates attention to the effortful mental
activities that demand it, including complex computations. The operations of
System 2 are often associated with the subjective experience of agency, choice,
and concentration. Although System 2 believes itself to be where the action is,
System 1 is the hero of this book.
System 1 happens because of the data of previous similar
experiences oscillating in the forefront of our memory. In this process we end
up not only making wrong observations but also falling in the trap of
illusions. We’ve been seeing many visual illusion pictures in our childhood
that surprised us. Daniel has highlighted a commonly experienced process called
Cognitive illusion.
Cognitive illusion
Quite often we attentively listen to our friend A, who makes
us believe how another common friend Mr.B betrayed him. Many a times while
listening to the grievances of person like Mr. A, we quickly and automatically
assume that the third person Mr. B is at fault. That’s Cognitive illusion. This
is common in gossips. Whenever such incident happens we need to understand that
System 1 is in action and there is a need of System 2 to come in action.
System 2 needs energy
When we use System 2 the pupils in our eyes dilate. Much like the electricity meter outside our
house or apartment, the pupils offer an index of the current rate at which
mental energy is used and as we become skilled in a task, its demand for energy
diminishes.
Avoid doing two or more works simultaneously whenever system
2 is in use.
Concentration is important in everything we do. All Daniel
wants to say is to ensure that we do not miss parallel happenings that could be
equally important. When engaged in a mental sprint, we may become effectively
blind.
Watch the short video in the given link… https://youtu.be/vJG698U2Mvo.
The most dramatic demonstration was offered by Christopher
Chabris and Daniel Simons in their book The Invisible Gorilla. The gorilla
study illustrates two important facts about our minds: we can be blind to the
obvious, and we are also blind to our blindness.
We tend to use system 1, when system 2 should be in use.
Consider a simple Math question. A pen and an eraser costs Rs.11. The cost of the pen is Rs.10 more than that of the eraser. What’s the cost of one eraser?
The answer is not Re.1.
Another interesting point made by
Daniel through his experiments is that when we people have to make a choice
between self-control and immediate benefits, we prefer immediate benefits. For
example, 63% of the intuitive respondents say they would prefer to get Rs. 5000 this month rather
than Rs.
Ego depletion:
Ego depletion is reason for the lack
of self-control we have Ego
depletion is a psychological theory that describes the decline in self-control after doing a task that requires self-control.
Ego depletion occurs when a
person’s self-control resources are used up, making it harder to exercise self-control
later on. This can happen when a person is constantly using self-control
without a break. The nervous system consumes more glucose than most other parts
of the body, and effortful mental activity appears to be especially expensive
in the currency of glucose. Intuitive errors are normally much more frequent
among ego-depleted people, and the drinkers of Splenda (A high intensity sweetener)
showed the expected depletion effect.
Solving tough problems.
While thinking we often think
much more than we want or need. Daniel calls this excess computation, the
mental shotgun. (A shotgun has no specific target). It is impossible to aim at
a single point with a shotgun because it shoots pellets that scatter, and it
seems almost equally difficult for System 1 not to do more than System 2
charges it to do.
Substituting Questions is an art
of solving complex questions. If a question seems to be tough, means the
question isn’t correctly framed for you. Rephrase it and see.
·Target Question: In how many different ways can I select 4 oranges from available 5 orangesSimplified Question: In how many different ways can I reject 1 orange from available 5 oranges?
·Target Question: How much would you contribute to save an endangered species?Simplified Question: How much emotion do I feel when I think of dying dolphins?
·Target Question: How happy I am?Simplified /Heuristic Question: What’s my mood?
The mental shotgun makes it easy
to generate quick answers to difficult questions without imposing much hard
work on your lazy System 2.
What You See is All There is (Wysiati)
My son, Naman forced us to visit
the newly opened Belgian Waffle in our vicinity. We tried something called Red
velvet. None of us liked the taste. Our family again tried the same outlet
after a month. We again didn’t like the taste and we suggested our friends to
abstain from Belgian waffle.
Less we thought of trying some
other eatable. Also we were blind to the thought that the baked biscuits my
family didn’t like can be liked by my friends because of the difference in
taste and choice. As a matter of fact Belgian Waffle in our locality is doing
good business. The refusal to see the
other aspects before making a decision is “WYSIATI”
System 1 has a habit of hurrying
up to make conclusions. The measure of success for System 1 is the coherence of
the story it manages to create. The amount and quality of the data on which the
story is based are largely irrelevant. When information is scarce, which is a
common occurrence, System 1 operates as a machine for jumping to conclusions.
Consider the following: “Will Mr. X be a good leader? She is intelligent and
strong…” An answer quickly came to your mind, and it was yes! You picked the
best answer based on the very limited information available, but you jumped the
gun. What if the next two adjectives were corrupt and cruel?
When we avoid to respond
immediately to something we allow System 2 play its role to build up a better
opinion and, probably, inform us that we need more quality information to make a better
decision.
The law of small numbers.
Average of Large samples are more
precise than small samples. Small samples yield extreme results more often than
large samples do. Which is why we see extreme cases in rural areas. Average
result of one school, is better than the average result of some other. Before
jumping on the conclusion the difference in the total number of students in the
two schools must be seen.
Anchoring
Anchoring effect has influence of
priming. It’s called Anchoring as adjustment. Suggestion is a priming effect. If
I have to guess the per capita income of Nasik which I am not aware of I will
build my answer around the answer prompted by my friend.
Priming Effect:
Try to say ‘Silk’ 5 times in
three seconds and immediately answer this question, “What does cow drink?”
The answer is milk in most of the
cases and that’s wrong. This is priming effect.
When Barack Obama was thinking about running for President, his
supporters wrote many words trying to dispel the misconception that Obama was a
Muslim. But the more they tried to remove this belief, the more it persisted.
People forgot the argument, and just remembered, subconsciously, the words “Obama”
and “Muslim”. Obama supporters instead started writing about Obama’s Christian
beliefs and his church attendance. That helped
Availability Heuristics (Speaking of Availability)
I was waiting for my kids to grow
up to use bi-cycle to go to school. Now when they are adept enough, I declined
the idea of sending them on cycle. Why? Because there was a serious accident on
the same road in the recent past. Connecting two events of this type without
considering the probability of its happening is ‘Availability Heuristics.’
We underestimates the risks of
indoor pollution because there are few media stories on them. That’s an
availability effect. We should look at the statistics.” Similarly a person
watching too many spy movies notices conspiracies everywhere. Even the
businessmen who undergo several successes in a row neglect the thought of
failure. The availability bias is makes them overconfident.”
Regression to the mean.
Is carrot better or the stick in
improving the performance? Daniel says that it does not matter much in most of
the cases. An experiment was done in which a circle was drawn on the floor and
participants were asked to throw a chalk without seeing the circle. They were
standing with their backs towards the circle. A good shot was mostly followed
by not so good and vice versa. Poor performance was typically followed by
improvement and good performance by deterioration, without any help from either
praise or punishment.
Complacency leading to dip and
gritty determination leading to success the next year is true in most cases. In
the cases where luck is a big factor, good luck leads to big success and good
luck normally is followed by not so well and vice versa. Which is why hitting
back to back centuries is rare even in the cases of top cricketers.
Exaggerated Emotional Coherence (Halo Effect)
If you like the president’s
politics, you probably like his voice and his appearance as well. The tendency
to like (or dislike) everything about a person—including things you have not
observed—is known as the halo effect.
At times we know nothing about
this person’s management skills. All we go by is the halo effect from a good
presentation.
Indeed, the halo effect is so
powerful that we blame external factors responsible for the failure of the
person whom we admire. In Nasik ask anybody about “Ichha-mani temple at
Gangapur road”, you will get many successful stories to hear. The belief is that
your wishes get completed if you visit this temple. Even when a wish does not
get fulfilled in ten visits the devotees come again with a new wish, the next
time. That’s Halo effect.
Because of the halo effect, we
get the causal relationship backward: we are prone to believe that the firm
fails because its CEO is rigid, when the truth is that the CEO appears to be
rigid because the firm is failing. This is how illusions of understanding are
born.
Sunk Cost fallacy:
Somewhat in extension to hallo
effect is the Sunk cost fallacy. We are making an additional investment because
we do not want to admit failure. Spending some extra time on an unsolved problem
to get it solved is also an instance of the sunk-cost fallacy.
Optimism and the way to reduce overconfidence.
If you were allowed one wish for your child, seriously
consider wishing him or her optimism. Optimists are normally cheerful and
happy, and therefore popular; they are resilient in adapting to failures and
hardships, their chances of clinical depression are reduced, their immune
system is stronger, they take better care of their health, they feel healthier
than others and are in fact likely to live longer. But there should be distinct
difference between Optimism and overconfidence. To reduce overconfidence we
should conduct a pre-mortem session. Someone may come up with a threat we have
neglected.
Questions like “Find out two big ways the project
can fail?” reduces overconfidence.
Loss aversion.
Extreme loss aversion makes some
of us turn down many favorable opportunities. I remember turning down 15+ offers
made by the agents in the process of buying couple of acres of land. I was over
protective. Unknowingly I kept on seeing some or the other lacuna, to turn down
the offers just to ensure that I do not lose my hard earned money. Now I realize
that it was Loss aversion that disallowed me to complete good deals.
I realized that people like me weigh losses
about twice as much as gains and after reading this book I have realized that
it is normal. Many reforms do not pass simply because people who stand to lose
fight harder than those who stand to gain.”
On a toss of a coin, one would
get 200 if one wins and lose 100 if loses. Most people will reject the offer
because of loss aversion. One needs
to think like a trader! You win a few, you lose a few.”
Endowment effect:
Diminishing marginal utility: the
more leisure we have, the less we care for an extra day of it, and each added
day is worth less than the one before. Similarly, the more income we have, the
less we care for an extra lakh, and the amount we are willing to give up for an
extra day of leisure increases.
|
Probability (%) |
0 |
1 |
2 |
5 |
10 |
20 |
50 |
|
Decision Weight |
0 |
5.5 |
8.1 |
13.2 |
18.6 |
26.1 |
42.1 |
|
Probability (%) |
80 |
90 |
95 |
98 |
99 |
100 |
|
Decision Weight |
60.1 |
71.2 |
79.3 |
87.1 |
91.2 |
100 |
A. 61% chance to win Rs.520,000 OR 63% chance to win Rs.
B. 98% chance to win Rs.520,000 OR 100% chance to win Rs.
Most of us take
the left of A and the right of B.
Disposition Effect:
Mr. A, staying in Nasik has
purchased a ticket to watch cricket match in Mumbai. Mr. B, also a Nasikite and
an equally avid cricket fan has got a ticket, free of cost from his friend.
Both A and B were about to leave Nasik for Mumbai, when they got the weather
forecast, warning a heavy rain.
Mr. A will not just feel more
disappointed, chances of he taking the risk to reach Mumbai are much more than
those of Mr. B. Mr. A gets a feeling of a loser —a bias that has been given an
opaque label: the disposition effect.
To implement this rational
behavior, System 2 would have to be aware of the counterfactual possibility:
“Would I still drive into this rainstorm if I had gotten the ticket free from a
friend?” It takes an active and disciplined mind to raise such a difficult
question. A rational decision maker is interested only in the future
consequences of current investments. Justifying earlier mistakes is not among
the Econ’s concerns. The decision to invest additional resources in a losing
account, when better investments are available, is known as the sunk-cost
fallacy, a costly mistake that is observed in decisions large and small.
Driving into heavy rain because one paid for tickets is a sunk-cost error. Hanging
on to a stock just to avoid closing our mental account at a loss is also a disposition
effect. The sunk-cost fallacy keeps people for too long in poor jobs, unhappy
marriages, and unpromising research projects.
Joint evaluation:
Rahul is 5ft tall and Anand is 5.1 feet tall.
Although Anand is taller but the age needs to be considered before the
judgment. What if Rahul is 6yrs old whereas Anand is 16 years of age? When you
see cases in isolation, you are likely to be guided by an emotional reaction of
System 1.
A contrast example. While interviewing a set of 10
candidates often we find one of them the best because the others are not as
good as she is. The question should be, “Do we need to select the best out of
the available lot or we want a candidate matching the required criterion?”
Two selves
Out of ‘Bad experience and ‘Bad memory’, the latter
is what keeps us unhappier. Keeping hands in extremely cold water for 30secs
will have more impact than keeping it for 60secs if the peak is at 30secs. Our
brain remembers the stimulus or the jerk. ‘The mouse getting scared of light’
experiment suggests the same. The experiencing self is the one that answers the
question: “Does it hurt now?” The remembering self is the one that answers the
question: “How was it, on the whole?”
Listening raptly to a long symphony on a disc that
was scratched near the end, producing a shocking sound, and he reported that
the bad ending “ruined the whole experience”. But the experience was not
actually ruined, only the memory of it.
We give the good and the bad part of your
experience equal weight, although the good part lasted ten times as long as the
other. This is a bad case of duration
neglect. The practice of visiting an old person, who is counting her last
breaths is duration neglect.
What we learn from the past is to maximize the
qualities of our future memories, not necessarily of our future experience.
This is the tyranny of the remembering self.
The Focusing
Illusion
“When do we get pleasure from our car?” The answer
to this question may surprise you, but it is straightforward: we get pleasure
(or displeasure) from our car when we think about our car, which is probably
not very often. Under normal circumstances, we do not spend much time thinking
about our car when we are driving it. We think of other things as we drive, and
our mood is determined by whatever we think about.
Disclaimer.
The summary of this wonderful book written by
Daniel is just an attempt to preserve good points. In the process I have used
my experiences, observations, discretions and foresights to land on a point.
Vinay Wagh
Bulls Eye.
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