Friday, November 15, 2013

"Understanding the Workings of Our Minds" (Kahneman does a cameo)

I stopped by Irving Wladawsky-Berger's corner of the www to see if he had any comments on IBM's decision to make Watson publicly available on the internet. Nothing yet but he does have this post up:
Advances in technology, big data and analytics hold the promise to significantly augment our judgement and expertise and help us make smarter, more effective decisions.  But, as we contemplate these exciting innovations, it’s good to take a step back and ask ourselves a few basic questions: How do we make decisions in the first place? What goes on in our minds when we are making decisions, from the simplest to the most complex? 
I heard a fascinating talk by Daniel Kahneman that directly addressed these questions at the IBM Cognitive Systems Colloquium which I attended last month.  Kahneman is Professor of Psychology Emeritus at Princeton University and Senior Scholar at the Woodrow Wilson School.  In 2002, he was awarded the Nobel Prize in Economics “for having integrated insights from psychological research into economic science, especially concerning human judgment and decision-making under uncertainty.” 

The talk was based on his 2011 bestseller Thinking, Fast and Slow.  The book explains the major discoveries by psychologists and cognitive scientists over the past several decades that have led to our current understanding of judgement and decision-making.  In particular, it describes the pioneering work of Kahneman and his long time collaborator Amos Tversky, who died in 1996. 
In the 1970s, the prevailing view among social scientists was that people are generally rational and in control of the way they think and make decisions.  It was thought that people only departed from rational behaviors because powerful emotions like fear, hatred or love distorted their judgement.  Then in 1974, Kahneman and Tversky published Judgement under Uncertainty: Heuristics and Biases, an article that challenged these assumptions.  In a series of experiments, they demonstrated that human behavior often deviated from the predictions of the previous rational models, and that these deviations were due to the machinery of cognition, that is, to the biases and mental shortcuts or heuristics that we use for making everyday decisions, rather than to our emotional state.

The book’s central thesis is that our mind is composed of two very different systems of thinking, which Kahneman calls System 1 and System 2.  System 1 is the intuitive, fast and emotional part of our mind.  Thoughts come automatically and very quickly to System 1, without us doing anything to make them happen.  System 2, on the other hand, is the slower, logical, more deliberate part of the mind.  It’s where we evaluate and choose between multiple options, because only System 2 can think of multiple things at once and shift its attention between them.

System 1 typically works by developing a coherent story based on its observations and the facts at its disposal.  This helps us deal efficiently with the myriads of simple situations we encountar in everyday life.  Research has shown that the intuitive System 1 is actually more influential in our decisions, choices and judgements than we generally realize.  While System 2 is more deliberate and rational, it’s also lazy and tires easily, so we don’t like to invoke it unless necessary.  “Although System 2 believes itself to be where the action is,” writes Kahneman, “the automatic System 1 is the hero of this book.”

But, while enabling us to act quickly, System 1 can lead to mistakes.  It tends to be overconfident, creating the impression that we live in a world that is more coherent and simpler than the actual real world.  It suppresses complexity and information that might contradict its coherent story, unless System 2 intervenes because it realizes that something doesn’t quite feel right.  System 1 does better the more expertise we have in a subject.  When operating within a domain we understand well, the biases and mistakes are minimized because our intuition is now based on real knowledge and experience.  Mistakes tend to happen when operating outside our areas of expertise....MORE