The Undoing Project: A Friendship That Changed Our Minds by Michael Lewis
Michael Lewis is a popular writer who has written best-selling books on interesting economic issues. Two-and-a-half years ago in 2014, I reviewed Flash Boys where he provided a fascinating insight into the crafty manipulations of ultra-fast electronic trading. Another favorite book of mine was Moneyball (2003) where Lewis told the story of how computerized statistical analyses were changing how sport franchises were being run. He was also known for The Blind Side (2006), The Big Short (2010) and Liar’s Poker (1989), as well as several other books dealing with various aspects of Wall Street.
This time he takes on the story of two Israeli psychologists, Daniel Kahneman and Amos Tversky who through scientific evidence-based research provided unique insight into the human decision-making processes. They showed how human logic is often not very “logical”.
Prior to elaborating on their fascinating collaboration, Lewis traced each of their lives. Although they were both outstanding heroes in intellectual university circles and in the military service in the Israeli armed forces during wartime, they had contrasting personalities. This book provides a study of each of them. One was an extrovert and the other was an introvert who was a fugitive from the Nazis in his childhood. As their collaboration matured, they were a couple who could finish each others’ sentences and were never sure which of them had originated a particular idea. This was particularly interesting because when prizes including a Nobel Prize were being handed out later in their careers, one was much more favored than the other.
One of the fun parts of the book is that in some of their groundbreaking experiments in which they asked their subjects relatively simple questions about predicting “so-called random behavior,” the reader of this book is provided with some of these questions and asked to give his or her answer, and you can then you are shown the defects in your thinking.
The far-reaching implications of much of their work, is illustrated by the wide range of business and government agencies who sought their advice. One example was the airline industry who wanted help in preventing mistakes in logic made by airline captains during an emergency which led to fatal air crashes. Their solution was that you cannot prevent the mistakes in logic that the commander of a plane might make it an emergency situation, but you could change the cockpit culture where no one was allowed to disagree with the captain especially in an emergency.
I did feel that some of the dismissal of psychoanalytic theory by the brilliant duo did not appreciate that such theory was never meant to predict human behavior but rather to understand it in retrospect and therefore find a process to relieve psychological suffering.
Overall this book was as a worthwhile experience as were Lewis’ other books which I have read. It was quite enlightening and most enjoyable.
Category: E- Economic | Tags: Amos Tversky, Daniel Kahneman, decision making, Flash Boys, Human logic, Liar's Poker, Michael Lewis, Moneyball, The Big Short, The Blind Side, The Undoing Project 2 comments »