Thinking, Fast and Slow – Intuition is NOT voodoo

  • zengrifter

    Thinking, Fast and Slow – Intuition is NOT voodoo

    Thinking, Fast and Slow

    Review by William Easterly / FT.com

    Why even experts must rely on intuition and often get it wrong

    There have been many good books on human rationality and irrationality, but only one masterpiece. That masterpiece is Daniel Kahneman’s Thinking, Fast and Slow.

    Kahneman, a winner of the Nobel Prize for economics, distils a lifetime of research into an encyclopedic coverage of both the surprising miracles and the equally surprising mistakes of our conscious and unconscious thinking. He achieves an even greater miracle by weaving his insights into an engaging narrative that is compulsively readable from beginning to end.

    Kahneman presents our thinking process as consisting of two systems.

    System 1 (Thinking Fast) is unconscious, intuitive and effort-free.

    System 2 (Thinking Slow) is conscious, uses deductive reasoning and is an awful lot of work.

    System 2 likes to think it is in charge but it’s really the irrepressible System 1 that runs the show. There is simply too much going on in our lives for System 2 to analyse everything. System 2 has to pick its moments with care; it is “lazy” out of necessity.

    Books on this subject tend to emphasise the failings of System 1 intuition, creating an impression of vast human irrationality. Kahneman dislikes the word “irrationality” and one of the signal strengths of Thinking, Fast and Slow is to combine the positive and negative views of intuition into one coherent story. In Kahneman’s words, System 1 is “indeed the origin of much that we do wrong” but it is critical to understand that “it is also the origin of most of what we do right – which is most of what we do”.

    The “marvels” of System 1 include an ability to recognise patterns in a fraction of a second, so that it will “automatically produce adequate solutions to challenges”. An even more remarkable accomplishment is “expert intuition”, in which after much practice a trained expert, such as a doctor or a firefighter, can unconsciously produce the right response to complex emergencies. The classic example is the firefighting captain who correctly anticipates that a house on fire is about to explode and gets his team out in time yet cannot articulate why he knew that.

    MORE- http://www.zenzoneforum.com/threads/19936-Thinking-Fast-and-Slow

  • sagefr0g

    why voodoo

    should’a been posted in advanced strategies or math & theory, no?

  • zengrifter

     

    Quote: sagefr0g said:
    should’a been posted in advanced strategies or math & theory, no?

    Yes… but not at THIS blackjack board! zg

  • Craps Master

     

    Do a search on ‘thinking fast and slow’ at Amazon and check out the second title that appears. Writing advantage play?

  • QFIT

     

    Simplistic logic and intuition have caused massive pain over millennia, not even counting gambler’s fallacies.

    When I was at Citibank, they used to say that making quick decisions was better than making correct decisions. Worked for a while.

  • sagefr0g

     

    Quote: Craps Master said:
    Do a search on ‘thinking fast and slow’ at Amazon and check out the second title that appears. Writing advantage play?

    huh? i came up with Fast and Slow Thinking by Karl Daniels , some yap about psychology and words….so??
    erhh am i thinking to slow or fast? whatever writing advantage, what am i missing?

  • sagefr0g

     

    Quote: QFIT said:
    Simplistic logic and intuition have caused massive pain over millennia, not even counting gambler’s fallacies.

    When I was at Citibank, they used to say that making quick decisions was better than making correct decisions. Worked for a while.

    heh, heh, same thing my supervisor at work told me when i was breaking in, he’d tell me, when the sh!t hits the fan, make a decision, better to make a decision than do nothing. i was thinking, yeah it a’int gonna be yer a$$ that’s in the sling, lol

  • Craps Master

     

    Quote: sagefr0g said:
    huh? i came up with Fast and Slow Thinking by Karl Daniels , some yap about psychology and words….so??
    erhh am i thinking to slow or fast? whatever writing advantage, what am i missing?

    It’s by a guy named “Karl Daniels” instead of Daniel Kahneman, and the title is similar. The publish date is also very close. I think this is clearly some guy who is trying to sell books to people who accidentally buy the wrong title.

  • sagefr0g

     

    Quote: Craps Master said:
    It’s by a guy named “Karl Daniels” instead of Daniel Kahneman, and the title is similar. The publish date is also very close. I think this is clearly some guy who is trying to sell books to people who accidentally buy the wrong title.

    wow, i sure didn’t catch that! lol
    errhh a google search of Daniel Kahneman comes up with http://en.wikipedia.org/wiki/Daniel_Kahneman, so apparently the guy did write the book zg refers to.
    interesting he has a paper on Belief in the law of small numbers”, errhh i haven’t read that…….
    dunno about this Karl Daniels……….

  • Gamblor

     

    Quote: sagefr0g said:
    heh, heh, same thing my supervisor at work told me when i was breaking in, he’d tell me, when the sh!t hits the fan, make a decision, better to make a decision than do nothing. i was thinking, yeah it a’int gonna be yer a$$ that’s in the sling, lol

    Your boss isn’t completely wrong, might be more right than wrong. Having worked in the corporate world myself, too many people are paralyzed by indecision and are too risk averse.

  • sagefr0g

     

    Quote: Gamblor said:
    Your boss isn’t completely wrong, might be more right than wrong. Having worked in the corporate world myself, too many people are paralyzed by indecision and are too risk averse.

    yup, imho yer correct………….. i see it in myself in the casinos, errhhh i mean, me, i’m often trying to second guess luck, finding myself making excuses in my mind far as pulling the trigger on positive ev plays. gotta just make myself do it.
    just me maybe, my guess is being paralyzed by indecision is how we get financial guys creating ponzi schemes, from how i understand it those types are often afraid to pull the trigger.

  • blackriver

     

    Quote: sagefr0g said:
    yup, imho yer correct………….. i see it in myself in the casinos, errhhh i mean, me, i’m often trying to second guess luck, finding myself making excuses in my mind far as pulling the trigger on positive ev plays. gotta just make myself do it.
    just me maybe, my guess is being paralyzed by indecision is how we get financial guys creating ponzi schemes, from how i understand it those types are often afraid to pull the trigger.

    the best cure for a scared money is more studying and practicing. a thorough understanding of everything going on and devoting some time to creative visualization will make it much easier to pull the trigger. When you get rusty you will get rightfully scared again.

    Also,i think a lot of people caught in ponzi schemes got there using both types of thinking, but the ones who dodged it either did the second type of thinking or they already put in the time and research like I suggested above that would shape their brain (and full it with crucial paradigms) such that when confronted with a ponzi they can dodge it with type 1 thinking.

    many experts fool you by using type 1 thinking but it isn’t innate, its from spending so many hours internalizing similar situations. The same way a poker/blackjack player of 10 years doesn’t have to think about a lot of lower level things that newbies do, because theyve already been in and handled the situation or similar many times allowing them to internalize much of the decision process and focus on higher level things.

  • aslan

     

    Quote: Gamblor said:
    Your boss isn’t completely wrong, might be more right than wrong. Having worked in the corporate world myself, too many people are paralyzed by indecision and are too risk averse.

    I recall a senior executive knocking down big government bucks who could never let a work project go. Her work box rose and rose and rose, nothing ever hitting her outbox. “If I make a decision and it is wrong, it will come back to haunt me. Ergo, I will not make a final ruling on anything.” I wonder what the person who took her job did with all those unapproved items. lol She finally got the shaft for something unrelated. But her inaction did nothing to hurt her status. Nobody could point to anything that she approved that turned out wrong! That’s because she did not have the courage to approve anything, and her timidity was amply rewarded. And let me make this clear, her job called for her input on work products until they achieved an acceptable level at which time decisions were made or rulings were issued. Her years of tenure yielded zero production. Either she was inept, or just afraid to act. Either way, she was totally unproductive, yet commanded a staggering salary. She pointed to the ineptness of those below her as the cause for low productivity. Nobody measured up to her standard of perfection. What a complete scam.

  • zengrifter

     

    Quote: aslan said:
    I recall a senior executive knocking down big government bucks … She pointed to the ineptness of those below her as the cause for low productivity. Nobody measured up to her standard of perfection. What a complete scam.

    I like it! zg

  • sagefr0g

     

    Quote: zengrifter said:
    I like it! zg

    have you read the book?
    anyone, read the book?

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