“The Undoing Project” M Lewis
Copyright 2017, read May 2024
Not exactly sure where I heard of this book.
“Doubt if not a pleasant condition, bur certainty is an absurd one.” – Voltaire. This quote opens the book. Another favorite quote along those same lines is “Right or wrong, but never in doubt.” Attributed to Mark Twain. Amos was a bit like that, 151.
This book is about two Israeli psychologists, Daniel Kahneman and Amos Tversky, who collaborated to create a new understanding of how we humans make decisions, both correct and incorrect. They were present at the creation of Israel, were in the military through a couple of wars, taught in Israel, then both emigrated to the US/Canada to teach here. They are characterized as two people of one mind with very different personalities, both quirky in many ways yet perceiving some truths that are now recognized as foundational. Tversky died early of cancer (melanoma) and Kahneman was awarded the Nobel prize later for the work they created.
Lewis, as normal, writes with an engaging, novel-like style pulling you through the story. I have read other books of his and found them to create a narrative he seemed to want to make. An example, “The Big Short” about the financial crisis was very critical of the financial industry, rating agencies, greedy mortgage brokers, etc. but left out the fact that the Clinton administration supercharged the CRA to push home loans so to raise the home ownership percentages in the U.S.
Anyway. Collaboration with folks who have knowledge you don’t; Focusing on “undoing” which really means root cause failure analysis before making a decision; and reading Kahneman’s book, “Thinking Fast and Slowly” are keys to the decision-making process.
37 balance data with human intuition
44 Sunk cost prejudices our thoughts towards retention versus letting something go away.
62 The 35, a story about 35 Israel Army folks who were killed on an operation when they were discovered by a shepherd who they let go. Lone Survivor same story. The decision to not kill the boy was in error.
72 The halo effect, the root foundation for a decision is known to us and we overlook better data.
82 The Kahneman Score is a data point to grade pilots, kind of like the GRIT score, a piece of data to bounce human thought against. An evaluation score, like a personality test.
98 If you wait long enough a problem may not be urgent anymore, like Truman.
113 Similarity with what we know tends to lead us down a path to a decision that may be faulty
126 praise and correction works better than negative criticism
141 Take a break trying to solve a problem, constant work clouds the mind.
148 Confirmation bias is a killer.
173 Doctor decisions tested based on data, results were scary, disagreements, 5 days later a different diagnosis from same doctor.
195 A summary, our perceptions, biases, retained models of the past, confirmation bias, etc., no matter how much our training, lead to inaccurate decisions. We should use data and collaborate with others before making big decisions.
221 Acknowledging uncertainty is a key to good decisions, be vulnerable, ask around, read, get data all within the time frame for the decision.237
231 the need for certainty drives many poor decisions. Wrigley. Making War.
248 we should evaluate a decision not on its’ outcome solely but the decision process that let to it.
261 Various tests show we make decisions to minimize regret, not maximize gain.
264 When one fails to take action and something not so good happens we tend to not accept responsibility for inaction. Confession of sin!
317 Delta pilot training on crew coordination reduced incidents by training in collaboration with others, data, etc. JAL accident in SFO-“I can’t tell the captain he is wrong”
327 The conjunction fallacy;
342 The Prospect Theory, the second most cited paper in economics. We make economic decisions the same way we make others and in order to make better decisions we must recognize our foibles. 60% of all acquisitions do not meet their financial projections.
A worthwhile read, a bit heavy on the relationship between the two men and somewhat theoretical on the philosophy side but I came away with a base knowledge of our decision processes need to be right in front of us and we need to collaborate.