Tag: thinking fast and slow

Thinking paths and more

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An athlete shoots 70%. If they shoot twice, what are the chances they make at least one? 🤔 

Before answering, consider thinking. Daniel Kahneman has an entire book about Thinking, Fast and Slow. Fast thought is immediate. Slow is deliberate. Often ‘thinking fast’ about thinking fast and slow is that slow is better.

That’s not the case. Lots of fast thought works well. 

One problem with Kahneman’s book – which he admits, Kahneman is a scientist and when the evidence changes his understanding does too – is the social science replication crisis. Some studies don’t repeat. Or repeat quirkily. For example: Linda is 31 years old, single, outspoken, and very bright. She majored in philosophy. As a student, she was deeply concerned with issues of discrimination and social justice, and also participated in anti-nuclear demonstrations.

Which is more probable? (1) Linda is a bank teller. (2) Linda is a bank teller and is active in the feminist movement. 

There’s a lot in there. But our fast reaction goes something like: If this information is here it must be important. Answer number two. That’s how we think. 

But take the same Linda is 31 years old… prompt and ask this question: There are 100 persons who fit Linda’s description. How many of them are: (1) Bank tellers? __ of 100 (2) Bank tellers and active in the feminist movement? __ of 100. 

Phrased that way the conjunction fallacy goes away. 

Thoughts are path dependent. Reframing changes the path.

An athlete misses 30% of the time. If they shoot twice, what are the chances they miss both? 🤔 Well they miss thirty percent of the time. To miss both it would be 30%*30%, which equals 9%. So to the original question, this athlete will make at least one more than ninety percent of the time.

If riddles are a good proxy, there are two tools: intuition and presentation. Intuition is internal. How many mental models do we have? How numerate are we? What’s our (ongoing) education? Presentation is external. What are the norms? What’s the phrasing? All framing is relative so what is this relative to?

Let’s leave with one more. Historically category five hurricanes hit Beach City once every hundred years. What chance is there for a storm of that level in the next thirty years? 

Other examples for our intuition: Birthday Bet, Simpson’s Paradox.

Also, this thinking and these riddles are courtesy of Michael Steiner’s podcast appearances. Sign up for Listen Notes and search him out. I enjoy [The Pathless Path](https://lnns.co/lGC0UYZr47A) & The Derivative.

Thinking fast, associations

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We think fast to understand the world. One form of fast thinking is associations.

One association is the person-institution. A Harvard epidemiologists, an Oxford trained economist, a board certified physician. It’s only through the association that we get the meaning. It’s all short hand. And we need it.

If I check to see if Marc Lipsitch knows what he’s talking about (he does) I’d read his journal articles, and study organic chemistry, and well, that’s the point.

These association are asymmetrical. There is the new thing (Marc) which we are associating with the old thing (Harvard). The new thing is relatively not understood and the old thing is relatively understood. People know a lot more about Harvard than about so-and-so epidemiologists.

An interesting version of this idea came up on NPR. It was about this sound:

This sonic logo was created via an association. HBO (new) wanted to associate itself with television (old). It did that through static. But, as times change so do associations. That old static, though totally irrelevant to modern-digital-cord-cutting-viewers, became associated with HBO.

“It’s become this incredible ritual of sitting down and watching something,” explained head of brand marketing for HBO, Jason Mulderig, “and having this powerful emotional trigger that sets you in this emotional space of anticipation and waiting for what’s going to come next.”

I’ve always disliked the term human biases. They feel more like tendencies. Sometimes those tendencies optimize for short term gains, sometimes not.

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One example of the long term hacking of our tendencies is the Credit Karma program.

May 2022 update, Dan Carlin on this angle but for historical figures.

“I’m your financial advisor”

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In the early 2010s I listened to Dave Ramsey nearly every day. The Nashville based personal finance (personal accountability) radio host is still on the air, holding court. There’s a few things that make Ramsey popular.

First, he’s great on the radio. The content fits the medium, and Ramsey’s basic explanations, stories, and approaches combined with the delivery works.

Second, he gives good advice rather than perfect advice. There’s a difference between precision and accuracy, usually between the world of a model and the real world. It’s why Ramsey suggests beginning with the debt snowball:

“Start by listing all of your debts except for your mortgage. Put them in order by balance from smallest to largest—regardless of interest rate. Pay minimum payments on everything but the little one. Attack that one with a vengeance. Once it’s gone, take that payment and put it toward the second-smallest debt, making minimum payments on the rest.” – Dave Ramsey (link)

A great behavioral angle. We like feelings of progress and by focusing on the smallest balance we get that, especially given the financial conditions we may be in.

A third thing Ramsey does well is filling an answer gap. One time a woman called into his show and asked a question. He answered. She protested that her friends and family wouldn’t understand. He suggested telling them her financial advisor advised it. I don’t have a financial advisor she said. “I’m your financial advisor!!”, Ramsey retorted.

In another instance he told someone it didn’t matter how much their income was, the purchase wasn’t “in the budget”. Could they afford it? Yep. But framing it against the contrived ‘budget’ change the conversation. (I’ve used this one, it works.)

Both “I’m your financial advisor” and “it’s not in the budget” fill in an answer gap. Having ready answers can change our fast thinking. It works for drinking too much, a diet, or any kind of behavior we’re trying to stick with.

The ready answers can be pretty arbitrary too. If you offered “meatless Monday” would anyone actually comment? I’d wager not. So it’s not the validity of an explanation but merely the existence of one.

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Some people don’t like Ramsey’s advice but I’m reminded of the Tyler Cowen expression: opposed to what? If not this then what?

How to complete next year’s NCAA Men’s Basketball bracket

MIKE1 Comment

A quarantine activity in my sister-in-law’s family is buying stocks. Stonks. Gamestonks? Each week, each kid, gets five dollars. They invest in whatever they want.

The best returns, to date, are from my niece. She’s 8. Her name begins with ‘T’ so her stock choices begin with ‘T’. She owns Tesla.

My three nieces and nephews aren’t competing but they do demonstrate that in small groups the best way to outperform others is ‘be chalky.’ Picking favorites is called chalky because in the days of horse racing, tracks wrote the lines on chalkboards with chalk. Even then, people liked betting favorites, so those odds were updated more often and had fresher chalk marks. Hence, ‘betting chalk’.

The same structure works for winning in any small group. To outperform, bet chalk. **However in a large group, choose variance.** Be different, and be right. We know that something will happen. We just don’t know which something.

One way to think through this approach is to consider the sum of the NCAAM final four team’s ranks. This question was posed on Wharton Moneyball and we have an answer: 11. On average, two number one seeds make it to the final four each year. Only in 1993 did all one seeds make it to the FF.

Yeah, but Covid!

That’s what I thought too. When Cade Massey proposed that it might be a more variable season I thought, base rates be dammed it’s going over. But that’s probably wrong (Narrator: It was not).

What I missed what something Daniel Kahneman wrote about in TFaS: substitution.

Rather than answer the question: Will the sum of the ranks of the final four teams be larger than average this year? I substituted the question: Will there be more variance this year?

What I missed was the idea behind hurdle technologies. In food preservation there’s not just one way that keeps food safe to eat, but a bunch. Food might be too acidic and be cooled and be sealed. It’s the combination of things, a series of obstacles, which limits bacteria.

That same idea applies in a bracket. Oral Roberts (#15) beat Ohio State (#2) and Florida (#7) but had to face Arkansas (#3) too, who won.

Ultimately the final four seeds totaled 15 (1,1,2,11). My direction was right. My reasoning was wrong.

Are you tired? Is that really the question?

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“When faced with a difficult question, we often answer an easier one instead, usually without noticing the substitution.”

Daniel Kahneman

We probably do this a lot more than we think. Consider how many decisions we face in a day, how many are automatic, and how many switches go unnoticed.

It happens to everyone. In a recent post, Scott Alexander writes about an individual randomized control trial for a sleep supplement. Alexander wanted to know if the supplement helped him sleep better, or if it was a placebo effect.

Placebos are powerful and cheap. If they get the job done, all the better it seems. But Alexander is serious, smart, and curious—so he tested this idea.

A friend disguised the supplements and sugar pills in oversized capsules, flipped a coin to determine the order, and placed the camouflaged pills in a monthly pill planner. To test the effectiveness, Alexander recorded hours of sleep and subjective ratings on how he felt. The results shocked him.

But not for the reason he expected.

I think the active ingredient here was not letting myself look at the clock. Without external cues to tell me how tired I should feel, I was forced to rely on how tired I actually felt, which in many cases was “not tired at all”. 

Scott Alexander

In removing the alarm clock, Alexander removed the easier question. If it was before nine, it was too early. Obviously. Or not.

These kinds of tendencies work great for a lot of things, but occasionally work too much and we get interesting results like this.

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