This book was by Michael lewis. It’s about these two Israeli psychologists, and the first half of the book, I will admit, is slow and almost lost me. Because it’s very historical, kind of the life story of these two psychologists, independently you don’t even really know they’re going to meet, I was confused at first there’s like all these names going around. They had a very tumultuous early life, like both of them were involved in many wars. In Israel, they were in the military. One of them was a paratrooper, and I think jumping out of planes.
By the name of Danny Kahneman and Amos Tversky, these two uh psychologists went on to collaborate in the mid-1900s. I want to say they started collaborating around the 60s. Everyone who knew them was like they’ll never. These guys are different like they’re both ends of the spectrum. In this case, opposites attract, I guess because these two psychologists teamed up together and produced some of the most groundbreaking psychological research about the human mind and decision-making and the systematic errors and biases we make when making decisions every day.
Then they start getting to the applications of this research in the back half of the book. It goes it all. One example that I thought was absorbing was like, and they brought all these doctors in a room trying to diagnose a disease by looking at an x-ray. And there were seven factors that these doctors said they were looking for when they looked at an x-ray, that was like the size of this, like inflammation here, whatever these seven traits were that could be mathematically programmed, into an algorithm. When they showed a bunch of, they designed this algorithm. They then did a test where they showed all the doctors who developed the algorithm a bunch of different x-rays, even the same x-rays twice, and they noticed that the diagnosis from the actual doctors, were super inconsistent. Even some of the doctors looked at the same x-ray twice. They came up with two different diagnoses, but the algorithm designed by those doctors did an incredibly better job predicting the disease or the occurrence of that disease than all of the doctors. Even though the doctors created the algorithm, it was much better at picking it because all these systematic errors in the human mind led the doctors to not being able to put into practice the own rules and algorithms that they designed.
I would highly recommend this book, and I think everybody should read it, because it’ll give you like, these little, like moments of excellent insight about your intuition and your own biases.
What I’m trying to get to is at the end of the book. Basically, I don’t want to ruin it all, but I get pretty famous and still really famous now. Research is still the groundwork essentially for what is now behavioral economics. This fundamental theory is that the entire way economics has been done historically, assuming that consumers and individuals are making rational decisions is wrong. There’ll be systematic biases and misjudgments in human character leading to all these inefficiencies and irrational decisions being created. There’s a new way to look at economics, this behavioral lens. So, that gave way to the feel of like these two guys, skeeving up. You see the entire story of the genesis of behavioral economics, which is fascinating and like still being worked into society. Today the thoughts that these guys laid out in their papers about decision making and judgment were as yet ahead of their time that they still their potential has fully yet to be realized.
It is extrapolating this, with this whole notion of like now in the future. What where does the theory of economics go, where does behavioral econ go. I’ve been thinking about, like, artificial intelligence, that microcosm of an algorithm is better at diagnosing diseases than the doctors who design the algorithm. Is that going to be true for politics in the future? Will an algorithm we develop to make political decisions or economic decisions about raising interest rates to be better at making those decisions. Then humans, and if we can prove that it is, through the fundamentally this research, that almost makes it seem like algorithms for artificial intelligence would be better at making decisions than humans are at a grand scale for humans.
Weirdly I almost think this book is the backbone of the start of the research that will eventually prove, or could be used to prove, that artificial intelligence algorithms are far more efficient at decision making. Therefore, we should be granted the power to make decisions and make decisions over humans because of the systematic biases and errors we don’t have, which is incredibly scary and is like a big piece of the robot revolution that I’ve been freaking out about it. This book could be the beginnings, like Danny Kahneman and Amos Tversky, could their research, could be the beginnings of proving that humans shouldn’t be allowed to make decisions and that algorithms will do a better job.
That is fascinating to me, and I think we’re only at the just tip of the iceberg, of the impact, of these guys as research. I believe artificial intelligence will make this so much more relevant and make the undoing project so much more appropriate. So, now that’s why I don’t make this too long a review, but it made me rethink things like incredible insights from this book. On top of that, it’s just like a very inspirational book about two brilliant guys. As a bit of friendship going on, they were super into each other, like bright creating this groundbreaking research, you like really, you feel for these characters they feel like they’re both your friends, at the end of the book. Incredibly well written, and I will say like I did think, the first part was a little bit boring. But I think he had to give me that context to put him all in perspective, and I think that’s my own bias.
I’m going to rate every book that I read, and I will start doing these articles. I’m giving this a 4 out of 5. I know that, actually, 4.5 out of 5, I’m going to be super tough. I don’t want to give anybody a five out of five. Unless it’s a mind-blowingly good book and this book, the first part was a little too slow for me, as some of the psychological theories were very complicated. I felt like if you weren’t a psychologist or hadn’t spent time reading many papers. They go over your head because it’s like, all these there’s like you’re reading on one page, like ten new terms, that are you know, defeating all these old rules and words that were the norm, that you didn’t even know because you’re not in psychology.
That part to me made it a little less exciting and more challenging to read through the beginning.
But, towards the end, it just heats up and like you’ll get so into it, so 4.5 out of 5 mainly. Because I think this is such an essential piece of economic, like economics and psychology, that will keep unfolding, and these guys’ research, even though it was 30 years ago from today, will become more and more relevant future. Which I think is a crazy way to look at it, and I think that’s why everybody should go get a copy of this book.12