Results for “kahneman” 61 found
Daniel Kahneman, RIP…
Here is a WaPo obituary. For the curious, here is my (earlier) Conversation with Daniel Kahneman. Here are earlier posts on him.
My Conversation with Daniel Kahneman
Here is the transcript and audio, a rollicking time was had by all. We covered what you would expect us to have covered. Here is one bit:
COWEN: And that people want to maximize their overall sense of how their life has gone — do you think that is ultimately Darwinian roots? Why is that the equilibrium? Happiness feels good, right?
KAHNEMAN: Yeah, happiness feels good in the moment. But it’s in the moment. What you’re left with are your memories. And that’s a very striking thing — that memories stay with you, and the reality of life is gone in an instant. So memory has a disproportionate weight because it’s with us. It stays with us. It’s the only thing we get to keep.
COWEN: If you think of your own life, have you maximized happiness or the overall sense of how your life has gone?
KAHNEMAN: Neither.
[laughter]
COWEN: Neither. Citations?
KAHNEMAN: No.
And on his new project:
KAHNEMAN: I’ll tell you where the experiment from which my current fascination with noise arose. I was working with an insurance company, and we did a very standard experiment. They constructed cases, very routine, standard cases. Expensive cases — we’re not talking of insuring cars. We’re talking of insuring financial firms for risk of fraud.
So you have people who are specialists in this. This is what they do. Cases were constructed completely realistically, the kind of thing that people encounter every day. You have 50 people reading a case and putting a dollar value on it.
I could ask you, and I asked the executives in the firm, and it’s a number that just about everybody agrees. Suppose you take two people at random, two underwriters at random. You average the premium they set, you take the difference between them, and you divide the difference by the average.
By what percentage do people differ? Well, would you expect people to differ? And there is a common answer that you find, when I just talk to people and ask them, or the executives had the same answer. It’s somewhere around 10 percent. That’s what people expect to see in a well-run firm.
Now, what we found was 50 percent, 5–0, which, by the way, means that those underwriters were absolutely wasting their time, in the sense of assessing risk. So that’s noise, and you find variability across individuals, which is not supposed to exist.
I enjoyed this particular exchange:
COWEN: Do you think of low intelligence as yet a third independent source of error? Or is that somehow subsumed in bias and noise?
KAHNEMAN: You mean plain stupidity?
[laughter]
COWEN: In some cases.
And this:
COWEN: A society such as Argentina that relies so heavily on psychoanalysis — as a psychologist, do you see that as bias? Is it a placebo? Is there a placebo effect in psychoanalysis?
KAHNEMAN: You seem to attribute . . . You seem to think that I think of bias all the time.
[laughter]
COWEN: I can’t imagine why. That’s my bias.
KAHNEMAN: It’s like thinking of sex all the time. I really don’t think of bias that much.
Finally:
COWEN: Some questions about psychologists outside of what you’ve worked on, but maybe related — Freud. What do you think of Freud’s body of work? And has it influenced you at all?
Definitely recommended, and you will find cameo appearances by Michael Nielsen and Daniel Gross.
What should I ask Daniel Kahneman?
I will be having a Conversation with him on November 12, unfortunately the GMU event is already sold out. In the meantime, what do you suggest? What should I ask him?
Erik Brynjolfsson interviews Daniel Kahneman
Mostly about AI, here is one bit:
My guess is that AI is very, very good at decoding human interactions and human expressions. If you imagine a robot that sees you at home, and sees your interaction with your spouse, and sees things over time; that robot will be learning. But what robots learn is learned by all, like self-driving cars. It’s not the experience of the single, individual self-driving car. So, the accumulation of emotional intelligence will be very rapid once we start to have that kind of robot .
It’s really interesting to think about whether people are happier now than they were. This is not at all obvious because people adapt and habituate to most of what they have. So, the question to consider about well-being and about providing various goods to people, is whether they’re going to get used to having those goods, and whether they continue to enjoy those goods. It’s not apparent how valuable these things are, and it will be interesting to see how this changes in the future.
Kahneman tells us that his forthcoming book is called Noise, though I don’t yet find it on Amazon. Here is an HBR essay of his on that topic.
*Thinking, Fast and Slow*, by Daniel Kahneman
It is a very good book, clearly written, engaging yet sober, substantive in every chapter, and it does not oversell its material. If you are familiar with the underlying papers you will not see much new here, but as a readable introduction to the work of Kahneman (and Tversky) I give it an A or A+.
It is evident throughout that the author is a psychologist and not an economist; your mileage may vary, but you will not find a response to John List in here. Here is a bit about those unreliable judges, this time in Germany rather than Israel:
The power of random anchors has been demonstrated in some unsettling ways. German judges with an average of more than fifteen years of experience on the bench first read a description of a woman who had been caught shoplifting, then rolled a pair of dice that were loaded so every roll resulted in either a 3 or a 9. As soon as the dice came to a stop, the judges were asked whether they would sentence the woman to a term in prison greater or lesser, in months, than the number showing on the dice. Finally, the judges were instructed to specify the exact prison sentence they would give to the shoplifter. On average, those who had rolled a 9 said they would sentence her to 8 months; those who rolled a 3 said they would sentence here to 5 months; the anchoring effect was 50%.
You can pre-order the book here; it is due out October 25th.
Daniel Kahneman on happiness and wealth
We had thought income effects are small because we were looking within
countries. The GDP differences between countries are enormous, and
highly predictive of differences in life satisfaction. In a sample of
over 130,000 people from 126 countries, the correlation between the
life satisfaction of individuals and the GDP of the country in which
they live was over .40 – an exceptionally high value in social science.
Humans everywhere, from Norway to Sierra Leone, apparently evaluate
their life by a common standard of material prosperity, which changes
as GDP increases. The implied conclusion, that citizens of different
countries do not adapt to their level of prosperity, flies against
everything we thought we knew ten years ago. We have been wrong and now
we know it. I suppose this means that there is a science of well-being,
even if we are not doing it very well.
Here are Kahneman’s full remarks. He also presents a more complete theory of happiness, namely that is determined by basic personality type and which activities you are able to do during the course of your day, the latter being a function of wealth. That excerpt is from this post by Arnold Kling, on how people have changed their minds, read this one too. Here is the core source, highly recommended, it is one of the best hour-wasters you will get this year.
Symposium with Michael Milken, Gary Becker, Myron Scholes, and Daniel Kahneman
Here is the transcript, the major topics are global warming and the disposition of global financial surpluses. The pointer is from www.politicaltheory.info.
Sunday assorted links
1. Brian Wilson thought this was the best Beach Boys album ever.
2. A new interview with Daniel Kahneman. His last?
3. Vitalik on the libertarian-to-fascist pipeline.
4. “The Beatles, Jones recalled, had named a song “All You Need Is Love.” Why not call the paper “Attention Is All You Need”?” Wired link here.
5. Travel notes for Thiruvananthapuram.
Saturday assorted links
Income and happiness, revisited
Measures of well-being have often been found to rise with log (income). Kahneman and Deaton [Proc. Natl. Acad. Sci. U.S.A. 107, 16489–93 (2010)] reported an exception; a measure of emotional well-being (happiness) increased but then flattened somewhere between $60,000 and $90,000. In contrast, Killingsworth [Proc. Natl. Acad. Sci. U.S.A. 118, e2016976118 (2021)] observed a linear relation between happiness and log(income) in an experience-sampling study. We discovered in a joint reanalysis of the experience sampling data that the flattening pattern exists but is restricted to the least happy 20% of the population, and that complementary nonlinearities contribute to the overall linear-log relationship between happiness and income. We trace the discrepant results to the authors’ reliance on standard practices and assumptions of data analysis that should be questioned more often, although they are standard in social science.
That is from a recent collaboration by Matthew A. Killingsworth, Daniel Kahneman, and Barbara Mellers. Via the excellent Kevin Lewis. So if you’re rich, don’t be a sad sack! No need for that. And via Daniel Lippman, here is some Bloomberg coverage of the same.
Sunday assorted links
1. Economics, as taught at U Mass Amherst, does not make U Mass Amherst undergraduates more selfish. Good paper, but incorrectly framed. And which topics do then make them more selfish? Any?
2. “Every registered thoroughbred in the world is descended from one of three stallions: the Byerly Turk, the Darley Arabian, and the Godolphin Arabian.” (New Yorker)
3. The 25 most popular foods in Algeria. And finishing Finnegans Wake.
4. Maybe these should be questions on the GREs? (NYT)
5. Kahneman, Sibony, and Sunstein Op-Ed on Noise (NYT). And here is a Guardian interview with Kahneman.
6. “Drilling companies rarely recommend dowsers to their clients, but the practice is common nonetheless.” Starts slow, but interesting.
*Noise: A Flaw in Human Judgment*
That is the new and very interesting book by Daniel Kahneman, Olivier Sibony, and Cass R. Sunstein. Think of “noise” as the new major problem rather than bias. Here is one excerpt:
…we presented our findings to the senior managers of an asset management firm, prompting them to run their own exploratory noise audit. they asked forty-two experienced investors in the firm to estimate the fair value of a stock (the price at which investors would be indifferent to buying or selling). The investors based their analysis on a one-page description of the business; the data included ismplified profits and loss, balance sheet, and cash flow statements for the past three years and projections for the next two. median noise, measured in the same way as in the insurance company, was 41%. Such large differences among investors in the same firm, using the same valuation methods, cannot be good news.
I will be covering this book more soon, you can pre-order it here. And here Tim Harford does FT lunch with Kahneman, self-recommending.
Wednesday assorted links
1. That was then, this is now (sex edition).
2. Why Daniel Kahneman is so influential in baseball these days (NYT).
3. The Regball culture that is Russia.
4. Biden’s White House uses Zoom for meetings (jaw hits floor, please do note I love Zoom for other purposes).
What is the real problem with social media? And how should we respond?
That is the topic of my latest Bloomberg column. Here is one bit:
Psychologist Daniel Kahneman, who is also a Nobel laureate in economics, has written and co-written a number of papers on happiness in which he distinguishes between enjoying the moment and having an overall sense of satisfaction with one’s life. As it turns out, these two variables often diverge quite dramatically…
My tentative conclusion from all this: Online life is inducing us to invest less in our memories and long-term sense of satisfaction. It is pretty obvious from human behavior that, right now, the internet is doing more to boost short-term pleasures.
The more negative take would be that online life is obscuring our understanding of our own lives. I do not go that far. After all, humans make analogous choices about balancing short- and long-term happiness when they have one child rather than four, or when they sit on an exercise bike rather than get on a plane to Paris. Those aren’t the wrong decisions for everybody.
The solutions include pro-natalism and more travel:
There is so much talk about regulating or controlling the internet. Dare I suggest an alternative approach? Use public policy to help shift the balance of ease back toward life satisfaction and the formation of longer-term memories. Make it cheaper and easier to have and raise children. Use the education system to support more study trips abroad. Think about how to ease the pursuit of long-term life satisfaction.
There are plenty of human imperfections behind our online choices. As we respond, why not accentuate the positive — and keep the freedom to choose?
There is much more at the link, please do read the whole thing.