Noise
A Flaw in Human Judgement
Daniel Kahneman, Olivier Sibony and Cass R. Sunstein
Having read it
★★☆☆☆
Lost in its own academic bubbles of worthiness and ‘incredible’ insight, it is a book, albeit with an interesting premise, that (ironically?!) contributes rather well to the very subject it is on about despite it saying we should be reducing it!
Anyway, didn’t read it all but like to think I got a reasonable overview of it, enjoying certain segments in the first and last few chapters where they manage to get to their point succinctly, a few times.
A good passage
System noise, that is, unwanted variability in judgments that should ideally be identical, can create rampant injustice, high economic costs, and errors of many kinds.
A second good passage
Pundits blessed with clear theories about how the world works were the most confident and the least accurate.
A third good passage
People who believe themselves capable of an impossibly high level of predictive accuracy are not just overconfident. They don’t merely deny the risk of noise and bias in their judgments. Nor do they simply deem themselves superior to other mortals. They also believe in the predictability of events that are in fact unpredictable, implicitly denying the reality of uncertainty. In the terms we have used here, this attitude amounts to a denial of ignorance.
The denial of ignorance adds an answer to the puzzle that baffled [Paul] Meehl [clinical psychologist] and his followers: why his message has remained largely unheeded, and why decision makers continue to rely on their intuition. When they listen to their gut, decision makers hear the internal signal and feel the emotional reward it brings. This internal signal that a good judgment has been reached is the voice of confidence, of ‘knowing without knowing why’. But an obiective assessment of the evidence’s true predictive power will rarely justify that level of confidence.
[...]
The denial of ignorance also explains another puzzle. When faced with the evidence we have presented here, many leaders draw a seemingly paradoxical conclusion. Their gut-based decisions may not be perfect, they argue, but if the more systematic alternatives are also far from perfect, they are not worth adopting.