Why hawks win

Another Danny Kahneman special.


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Imagine, for example, that you have been placed in a room and asked to watch a series of student speeches on the policies of Venezuelan leader Hugo Chávez. You've been told in advance that the students were assigned the task of either attacking or supporting Chávez and had no choice in the matter. Now, suppose that you are then asked to assess the political leanings of these students. Shrewd observers, of course, would factor in the context and adjust their assessments accordingly. A student who gave an enthusiastic pro-Chávez speech was merely doing what she was told, not revealing anything about her true attitudes. In fact, many experiments suggest that people would overwhelmingly rate the pro-Chávez speakers as more leftist. Even when alerted to context that should affect their judgment, people tend to ignore it. Instead, they attribute the behavior they see to the person's nature, character, or persistent motives. This bias is so robust and common that social psychologists have given it a lofty title: They call it the fundamental attribution error.
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Link here through FP.

Interview with Danny Kahneman

Good 'un. For those who wouldnt know him, he was the 2002 Nobel Laureate for his decisive and critical work on behavioural economics.
What makes it even better is that he is a psychologist who won a Nobel in Economics. The first to do so.

"For a psychologist it's obvious that people are not fully rational, and that they're not selfish, and that their tastes change. It was just a collection of statements that seemed almost absurd. I had no idea, at that stage, that a lot of my career would be dedicated to that conversation. That sort of happened almost by accident, later."

Link here

Wholly new way of looking at risks and who does what in compelling circumstances

Interesting eye opener this.

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They even drive differently. In one study, researchers at the University of Groningen in the Netherlands equipped customers of a Dutch insurance company with a GPS that was used to monitor their driving habits. The prevention-focused were, not surprisingly, less likely to speed than their promotion-focused fellow drivers. A second study showed that they also needed larger gaps between cars in order to feel comfortable merging.

So when people talk about the factors leading to the recent recession, and you hear a lot about excessive risk-taking (what Alan Greenspan famously called "irrational exuberance"), the prevention-focused would probably be last on your list of potential culprits. But you would be wrong.

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Link here

Psychology of overconfidence

Been checking on various methods of estimation, seemingly, to make myself better at it.

Friend sends this gem today. Thanks Jigs.

I do a bit of forecasting for fun at good judgment project [and finished on the leader board too this year] and this seems to have even more ramifications than just plain software engineering.

As an aside: the good judgment project has got a lot of publicity - check the search engines for the same.

Snippet from the same:

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In Thinking Fast and Slow, Kahneman explains a great deal of psychology as the interplay between two “systems” which govern our thoughts: System I and System II. My far-too-brief summary would be “System II does careful, rational, analytical thinking, and System I does quick, heuristic, pattern matching thinking”.

And, crucially, it’s as if evolution designed the whole thing with a key goal of keeping System II from having to do too much. Which makes plenty of sense from an evolutionary perspective — System II is slow as molasses, and incredibly costly, it should only be deployed in very, very rare situations. But you see the problem, no doubt: without thinking, how does your mind know when to invoke System II? From this perspective, many of the various “cognitive biases” of psychology make sense as elegant engineering solutions to a brutal real-world problem: how to apportion attention in real time.

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