On: The Map of Misunderstanding
Episode: 150
Date: March 2019
Key Subjects:
- Nobel Laureate, Professor of Psychology and Public Affairs, co-author of “Thinking Fast and Slow”.
- On intuition:
- Intuition really is recognition: of a pattern and the appropriate response to it.
- Idea that comes to mind automatically with high confidence and you trust it.
- Correlation between accuracy and confidence is not necessarily high.
- Correcting for high confidence is difficult:
- For intuition to work, three things are required:
- Regular world (patterns).
- Repeated exposure (ability to learn patterns).
- Immediate and certain feedback (connection between outcomes and rewards).
- Even when these conditions are not satisfied, people still form intuitions.
- So, best you can do is try to recognize situations where your intuitions is unlikely to be correct – this is difficult and rare.
- Framing:
- Framing is putting a story around an experience.
- As you form stories about your daily life and regular experiences, you develop intuitions.
- When you strip away the stories, the framing, people are unable to form intuitions.
- System 1 works on stories, not abstractions and numbers (system 2).
- Choose the frame that leads to the better outcome: nudging, behavioral economics.
- Akin to difference between emotional rationality (system 1) and cognitive rationality (system 2).
- Regret:
- Counter-factual:
- You are not thinking about something that actually happened.
- You think about something that could have happened but did not happen.
- Anticipated regret (loss avoidance) plays an important role in decision making.
- Counter-factual:
- Fairness:
- Evolutionary basis for assigning more weight to threat of loss than opportunity to gain:
- Threats are usually more immediate and have to be dealt with in order to survive.
- So, a potential loss is weighed more heavily than a potential gain.
- This asymmetry affects how people look at fairness:
- Fundamentally, people don’t want things taken away from them.
- Fairness becomes: don’t inflict losses on me.
- Fairness doesn’t mean: I will share my gains.
- Applies to inequality debate:
- You may have intuitions about end goals: you want people to be equal.
- But given the state you are in now, that means a re-distribution of what you already have.
- Something may have to be taken away from you: you don’t want that.
- So you are less inclined to get to pursue a goal of everyone being equal.
- Evolutionary basis for assigning more weight to threat of loss than opportunity to gain:
- Changing behavior – stories and removing obstacles.
- Again, the importance of images, stories and framing.
- If problems are remote, abstract and not immediate, difficult to solve.
- Solution 1: central idea of behavioral economies: choose a better frame.
- Solution 2: make it easy for people to make the right decision.
- Apply pressure versus make it easier (preferred).
- Pressure: threats, incentives, arguments, promises.
- Making it easy: removing obstacles, reduce effort, conflict and stress.
- Experience versus memory:
- Experience (in the moment) versus how the experienced is memorized (retrospective).
- Decision-making is based on memory and anticipated memories:
- Anticipating which experience is likely to produce the best memory.
- Future-directed: weighing anticipated regret versus anticipated satisfaction.
- Well-being:
- Generally, it may be the case that preventing misery is more important than pursuing well-being (given asymmetry of losses and gains).
- Given the difference between experience and memory, what is more important for well-being – the experience in the moment or the story you tell yourself after?
- In the moment happiness: largely about social connections, friends, love, et.
- Retrospective satisfaction: about your “story” – success, rewards, achievement.
- Very different conditions for happiness and satisfaction.
- Common projects:
- Conditions for collaboration: shared interests, common understanding of the world and of a desirable future.
Key Takeaways:
- Changing behavior:
- Choose the frame that leads to the better outcome: nudging, behavioral economics.
- Make it easy for people to make the right decision (remove obstacles).
- Recognize situations where your intuitions is unlikely to be correct.
- Intuition (expertise) works in a regular world (patterns), where repetition (ability to learn patterns) provides immediate and certain feedback.
- Decision-making is based on anticipated memories:
- Which experience is likely to produce the best memory.
- Weighing anticipated regret versus anticipated satisfaction.
- People don’t want things taken away from them.
- Fairness intuition is “don’t take away my stuff”; fairness intuition is not “I will share my stuff”).
- Well-being:
- In the moment happiness (social, love, etc.) versus retrospective satisfaction (achievements, rewards, success).
Worth Listening:
9/10