The Undoing Project: Exploring ‘Natural Stupidity’
The New York Times: The Undoing Project, by Michael Lewis (also author of Moneyball), is “a story about two unconventional thinkers who saw the world differently from everyone around them. Their peculiar area of research — how humans make decisions, often irrationally — has had profound implications for an array of fields, like professional sports, the military, medicine, politics, finance and public health.” It is the story of “two Israeli psychologists, Amos Tversky and Daniel Kahneman, whose discoveries challenged long-held beliefs about human nature and the way the mind works.”
Their work “helped explain why a simple algorithm is often better than the most experienced doctors at diagnosing stomach cancer, why so many financial experts failed to foresee the implosion of the housing market, and why professional basketball teams make costly errors when picking players — in short, why people’s instincts are often so wildly wrong … In 2002, Mr. Kahneman won the Nobel in economic science … for demonstrating how people make decisions when faced with risks and uncertainty. (When asked if their work had any application to artificial intelligence, Mr. Tversky, who died in 1996, countered that they were more interested in exploring ‘natural stupidity.’)”
“Their research demonstrating how people behave in fundamentally irrational ways when making decisions, relying on their gut rather than available data, gave rise to the field of behavioral economics. That discipline attracted Paul DePodesta, a Harvard student, who later went into sports management and helped upend professional baseball … It wasn’t until Mr. Lewis read a 2003 review of Moneyball in The New Republic, which mentioned the connection between Mr. Kahneman’s and Mr. Tversky’s research and the data revolution in baseball, that he realized the extent to which their work had shaped the book.”
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Tim Manners/Brand X Ventures | Dec 14th, 2016 | behavioral economics, decision making, human nature