The Economist interviewed cognitive scientist professor Gerd Gigerenzer of the Max Planck Institute for Human Development, author of a new book called Risk Savvy: How To Make Good Decisions, about how we frequently make terrible choices based on misinterpreted information:
You also talk about an unconscious rules of thumb, or intuition. What role does intuition play in assessing risk?
In our society, intuition is looked upon as suspicious. I have done a number of studies with large international companies and asked the decision-maker how often do you make important decisions with your gut? A gut decision is not arbitrary, or a sixth sense. It’s based on lots of experience, but it is in the unconscious. On average, we found that about 50% of all these big decisions were gut decisions. But the same managers would not admit this in public. There is anxiety because they could be made responsible. And intuition, even if it’s better than calculation, has a bad name in our society.
Aren’t anecdotes about people who successfully used their intuition to make an important decision prone to survivorship bias? We only get to hear their success stories because they survived or their company survived or were successful in some way.
My point is not that intuition is always superior. My point is that we need more tools. And for me intuition is equal with statistical calculations. The real question is: can we identify the problem where it is better to go after your first gut feeling, and the type of problem where it’s better to go and think about the problem and collect data? So a strategy like a heuristic is not better or worse, it’s just that you need to figure out where it works.
Risky Business (The Economist)
Risk Savvy: How To Make Good Decisions (Amazon)
Joe Karganis writes, "This is the 'Co-Assignment Galaxy' created by David McClure. It maps the top 160K titles in the new Open Syllabus 2.0 dataset, based on the frequency with which those texts are assigned (reflected in the size of the dot) and assigned together (reflected in the location and clustering of the dots). It's […]
The Bank of England has unveiled its new £50 notes, which had been earmarked to honour a distinguished British scientist, and which will feature Alan Turing, the WWII hero who discovered many of the foundational insights to both modern computing and cryptography, and whose work with the codebreakers of Bletchley Park are widely believed to […]
The great science purge, they’ll call it one day. Donald Trump is closing science offices throughout the federal government. ‘As of June, around 85 percent of all scientific posts in the federal government, including an official scientific advisor to the President, were left unfilled,’ write the editors of I F***ing Love Science blog in an […]
Vape technology has been around long enough that vapers are starting to get picky about their gear. Luckily, so are we. From disposable models to cutting-edge touchscreen atomizers, there’s a vaporizer in this roundup to suit every taste. Hera 2 – World’s Most Advanced Dual-Use Vaporizer Choose between dry herb or oil extraction modes – […]
With enough practice and commitment, anyone can be a visual artist. But without the right instruction, that time spent honing your skills could seem like an eternity. If you really want to see where your talent can take you, you need sound fundamentals – and no matter what discipline or genre you lean toward, the […]
Theoretically, there’s never been an easier time for marketers. The ubiquity of social media means a good word – or a good brand – can spread like wildfire with very little effort. But as limitless as the internet is, there’s a lot of competition and noise to contend with. And the vast graveyard of failed […]