I’m reading The Black Swan, by Nassim Nicholas Taleb. This book, like Thinking, Fast and Slow, by Daniel Kahneman, is partially about our capacity to judge probabilities and numerical values as humans, which according to these authors, is essentially horrible. This fact (and I call it fact because I have been pretty convinced by the studies cited in both books, but really it’s just my opinion on what they posit) both fascinates and amuses me. There are many simple examples in both books, though the underlying ideas are somewhat more complex. For example:
When asked to propose a value for two sets of dishes, Set A, with 24 pieces, all completely intact, and Set B, with 40 dishes, 9 of which are broken, the following results were obtained:
– Average price of Set A when evaluated by itself – $33
– Average price of Set B when evaluated by itself – $23
– Average prices of Sets A and B when evaluated together – A, $32 and B, $30
This just defies logic, but apparently, our brains are not that capable of good judgment in areas like this. Perhaps that is why The Price is Right has lasted so long. It seems we are very swayed by the element of broken dishes. Even when comparing the two sets, those that participated in the study seemed to think that the first 24 items were worth $30, but the additional 7 in Set B were only worth $2 more.
An individual has been described by a neighbor as fololows: “Steve is very shy and withdrawn, invariably helpful but with little interest in people or in the world of reality. A meek and tidy soul, he has a need for order and structure, and a passion for detail.” Is Steve more likely to be a librarian or a farmer?
Because this description of Steve is aligned with stereotypical traits we associate with librarians, most people instantly think he is more likely to be a librarian. Statistically speaking, however, there are more than 20 male farmers for every male librarian in the United States, so Steve is much more likely to be a farmer. Our brains just don’t work this way, though. Well, some people’s brains might – in fact, I can think of a person or two I know that would probably recognize the statistical significance before answering the question, but most of us rely on stories, stereotypes, and other forms of narrative to perform fast associations, because it’s easier to process.
I would highly recommend both of these books to anyone interested in the psychology of decision-making, and the things that influence our thinking. Our brains are much less sophisticated then we might think.