The Undoing Project: Writer Michael Lewis' tallest order yet

by Eloise Gibson / 17 March, 2017

Author Michael Lewis. Photo/Getty Images

Moneyball author Michael Lewis brings together the triumphs of two of the world’s greatest thinkers and their moving life histories.

If you’ve ever watched an infomercial for a frying pan, you’ll be familiar with a common mind trick. It’s not the infomercial ­presenter fooling you, it’s your brain. “How much would you expect to pay for this frypan? $100?” asks the salesman. Soon he’s offering two pans for $19.95, and ­throwing in a dishtowel. Five minutes earlier, you’d never heard of this brand of cookware. You know $100 is ludicrous. But sneakily, the irrelevant information lodges itself inside your brain, making the lower sums sound cheaper. If you are immune to this kind of deception, you’re unusual.

A famous experiment found people who spun a wheel of fortune and landed on a higher number subsequently estimated higher when they were asked how many African nations were members of the United Nations. The people knew there was no link between the number on the wheel and the composition of the UN. But their brains produced systematically higher estimates anyway. The effect – known as anchoring – is one of the brain quirks deftly explored by Michael Lewis in his new book, The Undoing Project.

You might know Lewis for his ­blockbuster books-turned-movies ­Moneyball, The Big Short and The Blind Side. The Californian writer is a master of finding gripping stories in complex, maths-based topics. But, even for him, this latest project seems like a tall order. Lewis’ protagonists are two Israeli psychologists, Daniel Kahneman and Amos Tversky, whose work on human irrationality changed the way we see ourselves.

Kahneman receives the Presidential Medal of Freedom from US President Barack Obama in 2013. Photo/Getty Images

Upending economic assumptions

There’s no big-money sport, as in ­Moneyball, or high-octane trading, as in The Big Short. Lewis pulls it off by weaving the pair’s triumphs with their surprisingly moving life histories. Best of all is his readable distillation of the Israeli duo’s ideas, which managed to upend not only psychology but also many of the ­assumptions of economics. People who wanted to read Kahneman’s ­bestselling book ­Thinking Fast and Slow (named by Barack Obama among his top 10 books) but found the style hard-going might be grateful for this potted version.

There’s plenty of food for thought in here, as well as dozens of reasons to ­mistrust your own brain. As well as ­sounding the alarm on anchoring, ­Kahneman and Tversky showed we tend to draw sweeping conclusions from scant amounts of data. We overestimate the likelihood of events that are recent and vivid to us – that’s why we drive slowly after passing a car accident. We see stories and patterns in random data, leading us to confuse cause with ­correlation – “my arthritis is worse when it rains”, “of course the war broke out the day the dam broke”.

At some point in life, we form mental models – almost ­caricatures of types of people – and use them as rules of thumb to assess everything that comes ­afterwards. If someone looks like our idea of a good football player, they must be a good football player – never mind the statistics. If a doctor encounters a drunk in the A&E, they might assume that their health problems are caused by ­alcoholism. Worst, our choices can be flipped 180 degrees simply by phrasing a question in a different way. In short, instead of making decisions based on actual probabilities, we use mental shortcuts. Most of the time we don’t even realise our brains are doing it.

Amos Tversky.

These in-built shortcuts save us oodles of mental energy, which we would otherwise spend calculating every single judgment. Often, they work pretty well. But as ­Kahneman and Tversky discovered, rules of thumb can put us wrong in scary and also predictable ways. A ­misstep calculating risk is no big deal if we forfeit the pub quiz. It’s a different matter when we trust our intuition to make what should be reasoned, data-based ­decisions, such as whether to activate the nuclear codes. As Kahneman put it, rather presciently, in a speech in the early 1970s, it is troubling to consider “an organism equipped with an affective and hormonal system not much different from that of the jungle rat being given the ability to destroy every living thing by pushing a few ­buttons”. He went on to lament how ­“crucial decisions are made, today as thousands of years ago, in terms of the intuitive guesses and preferences of a few men in positions of authority”.

The Undoing Project started after Lewis read a review of his 2003 book, Moneyball, the tale of how bigger and better data ­revolutionised baseball. ­Reviewers versed in ­psychological theory pointed out he’d skipped over a major question: why was data ­beating experienced human talent scouts at ­picking sporting talent? Many of the answers had been found by ­Kahneman and Tversky, but Lewis, like most ­non-academics, had never heard of them. He set out to play catch-up.

Much of the tale is a love story. When I first read Kahneman’s tribute to his friend and collaborator Tversky in the ­introduction to Kahneman’s Thinking Fast and Slow, I idly wondered if they were lovers. They weren’t but, as Lewis explains, the men were like a romantic couple in every way but sexually.

Both researchers married clever women, but their intense professional relationship strained their marriages and dominated years of their lives. At functions, they could often be found huddled together in a corner, talking deeply, even if they had just spent all day working together. As they explained it, they simply found each other more interesting than they found anyone else. During their most productive years, the pair wrote influential research papers on a single typewriter and formed sentences as if they shared a single brain.

During their most productive years, Amos Tversky, left, and Daniel Kahneman formed sentences as if they shared a single brain.

Different childhoods

Lewis traces the collaborators back to their very different childhoods. ­Kahneman, or Danny, as Lewis calls him, grew up in a Jewish family in Nazi-occupied Paris, where he saw people’s irrationality up close. Kahneman never got over the trauma of hiding from the Nazis with his family, nor did he forget the surprising, quirky ways in which powerful people, including enemy soldiers, behaved. Later, as a consultant for the Israeli army, he realised even so-called psychological experts were awful at predicting who would make a good officer or who’d ­perform well under fire.

Tversky had an easier upbringing. A popular, daring prankster who loved physical games, he grew up in Israel, the child of respected early Zionist settlers. A slight kid, he loaded up on water to get himself over the weight where he could join the army’s elite paratroopers, leading to a period when he jumped out of planes into enemy territory with an enthusiasm bordering on recklessness.

Lewis paints the adult Tversky as a sharply funny, deeply self-assured war hero, who always seemed to know he was the smartest person in any room; in ­fairness, most people who met him agreed. His partnership with ­Kahneman wasn’t ­obvious or easy. People who knew both men were surprised when they started spending hours alone together, locked in university offices, laughing, debating and brainstorming.

The uproarious laughter was particularly strange coming from Kahneman. As a young man, at least, he had been a bit of an odd duck. Although he was as brilliant as Tversky, he was much less competitive, plagued by self-doubt and prone to periods of melancholy.

Later, after Tversky ­followed him to North America, ­Kahneman would be deeply hurt by the way American ­academics elevated Tversky above him. Much later, the tables turned: Kahneman alone would win a Nobel Prize in economics, Tversky having died, aged 59, from cancer. Despite their ­mismatched ­temperaments, the pair revered each other’s minds and cared for each other deeply. Together, they ­produced results that neither could have done alone.

Society learns tricks

Happily, as Lewis illustrates, ­society learned a few tricks from the pair. Their rambling conversations grew into ­published experiments that cast doubt on our perception of people as natural-born statisticians who quickly and ­competently assess benefits and risk. It is partly thanks to them that junior staff in airline cockpits are now encouraged to question calls made under pressure by pilots.

Lewis draws a link between Danny and Amos and A&E departments hiring ­professional doubters to second-guess quick diagnoses. He even links them to the design of “opt-out” retirement schemes, such as KiwiSaver. Neither ­Kahneman, who is still working, nor ­Tversky ever explained why our brains work as they do, nor did they find a quick way around it, short of stopping, ­checking the numbers and forcing ­ourselves to reassess each crucial decision. Their achievement was creating healthy doubt about instinctive thought processes. ­Without them, we might place even more faith in our own minds than we do. We should probably be grateful. At least we now know what our brains are up to during infomercials.

This article was first published in the March 4, 2017 issue of the New Zealand Listener. Follow the Listener on Twitter, Facebook and sign up to the weekly newsletter.


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