I recently read the 2021 book, Noise: A Flaw in Human Judgement by Daniel Kahneman, Olivier Sibony and Cass Sunstein. I posted a paired down version of the review below:
“Noise: A Flaw in Human Judgement” was a good surprise for me. Daniel Kahneman and Cass Sustein’s were two of the three authors of this book. Their books, Kahneman’s “Thinking Fast & Slow” mentioned in many posts such as Unique Well-Being Influences of Experience and Memory) and Sunstein’s “Nudge: Improving Decisions about Health, Wealth, & Happiness” (also discussed in many posts) were both great books. This book for me was an extension of those works and how to use the ideas presented in those books more effectively. It certainly shifted my thinking from believing it was just bias that could cause errors, to understanding how our diverse thoughts can be more effectively coralled in ways that result in better judgment. The book also helped me understand why noise is an unseen and therefore uncorrected problem and why a focus on improving our decision process can help.
Nate Silver’s book, “The Signal and the Noise: Why So Many Predictions Fail—But Some Don’t” differentiated the signal from noise in the data with a focus on recognizing the signal. This book explained more about the noise. It explained how “Noise” can cause errors when we use our mind as a measuring instrument. Noise, which can happen on occasion, because of hunger, other concerns, and inattention to details can lead to all of us generating different judgments, even to the same situations. These different judgments lead to increased variance. More consistency, a suggested goal, could occur by lowering the variance through better methods or processes. Improved processes was also the main successful method Dr. W. Edwards Deming promoted to improve quality.
I also now better understand the idea of “Wisdom of the Crowds”. They also acknowledged wisdom does depend on the crowd. The idea of wisdom in crowds is how multiple views aggregated can cancel out errors. Cancelling out or averaging errors cannot happen with single shot assessments by judges or insurance adjusters. To make these single shot judgments less problematic, they recommend improving the decision process by treating those single shot judgements as recurring events. In other words, just as Deming demonstrated with quality management methods, continual process improvements should be the focus – the decision making process in this case.
I was surprised to learn that the powerful impact of anchoring was so pervasive. Anchoring seemed to be a repeated issue or source of errors. Anchoring, as has been shown, happens in situation when the first event, such as a price mentioned, becomes the anchor or reference point from which all else is measured or judged. One of their suggestions to counter anchoring is to use base rates as an anchor.
It was also explained how anchors are formed from first impressions, first statements and more. After an anchor is established, generally without our conscious recognition, we then use confirmation bias to distort new information so it fits that anchored or our original impression. We do this because we seek coherence. It seems none of us likes to be confused so we attempt o create coherence.
Noise is a very good book that helped me understand how our built in biases such as anchoring, planning fallacy, present bias (endowment effect), confirmation bias , substitution of easier answers for more complicated questions, overconfidence, loss aversion, availability and others impact our judgement. They also offered many ways to improve our judgement. Specifically it seems they are suggesting we slow down so we can use our logical brain, rather than our intuitive brain to make better judgements – what they call Decision Hygiene.
Basically, their generally suggestions to make better judgments, and be more accurate, are to take an outside view by determining a base rate, structure judgements based on several independently determined assessments (independence of assessments is vital), resist premature intuition (to avoid the anchoring effect), and then aggregate multiple independent judgements prior to making overall judgment. They also emphasize the superiority of relative versus absolute judgments. In other words, if you are interested in improving your personal or organizational judgments, I recommend the book, “Noise: A Flaw in Human Judgement”.
An important lesson I was reminded of from reading this book was not to let one area be most important. As we build a better life, it all matters. As I show in my work with the Salutogenic Wellness Promotion Scale (SWPS), all areas in our life can make a meaningful contribution to helping promote personal and planetary well-being. In other words, my research and that of many others has shown that we can help generate comprehensive improvements by creating reciprocal, pervasive, selfish, selfless, synergistic physical, social, emotional, spiritual, intellectual, vocational, and environmental interactions that help everyone and everything benefit. The missed point, often because of the push for significance in research, is that the results are from the longer term accumulation of impacts and all contributions matter. If you are interested, you can review any of the peer reviewed articles I have published with colleagues. To access, you may need to go to libraries and use Google Scholar. A recommended search is Becker, CM, salutogenesis, health, and well-being.
Please contact me if you are interested in learning more about promoting selfish, selfless, synergy so everyone and everything benefits.
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