Bounded Rationality: Intuitive Judgment & Choice, Daniel Kahneman & Amos Tversky

This week we shall look into one of the pivotal works of modern rationality (or its lack thereof) - Thinking: Fast and Slow by Daniel Kahneman, which includes the research which led to the origins of Behavioral Economics. With the book being extremely long and practically impossible to cover in 2 hours, we shall instead look into Kahneman's 2002 Economics Nobel Prize acceptance lecture. The crux of the theory, which culminated in Prospect Theory, was done with Amos Tversky.

In a joint biography of their work, The Undoing Project: A friendship that changed our minds, Michael Lewis comments on their radically different personalities, "Danny was always sure he was wrong. Amos was always sure he was right. Amos was the life of every party; Danny didn’t go to the parties. With Amos you always just picked up where you left off, no matter how long it had been since you last saw him. With Danny there was always a sense you were starting over, even if you had been with him just yesterday. Amos was a one-man wrecking ball for illogical arguments; when Danny heard an illogical argument, he asked, What might that be true of? Danny was a pessimist. Amos was not merely an optimist; Amos willed himself to be optimistic, because he had decided pessimism was stupid. Danny was irritable and short-tempered, but he wanted to please. Amos couldn't understand why anyone would be eager to please. In Danny’s office you couldn’t find anything because it was such a mess. In Amos’s office you couldn’t find anything because there was nothing there." But he also comments on their common ground, "Both were explicitly interested in how people functioned when they were in a ‘normal’ unemotional state. Both wanted to do science. Both wanted to search for simple, powerful truths. As complicated as Danny might have been, he still longed to do ‘the psychology of single questions,’ and as complicated as Amos’s work might have seemed, his instinct was to cut through endless bullshit to the simple nub of any matter. Both men were blessed with shockingly fertile minds. And both were Jews, in Israel, who did not believe in God. And yet all anyone saw were their differences."

But the critics were ultimately right about the Kahneman-Tversky instability, if not its timescale. Or perhaps just to ensure they were right, the critics claimed to have found the equivalent of the right hand which made the clapping sound (and not knowing the sound of one hand clapping, perhaps gave themselves a silent round of applause). Amos received more acclaim and honors, and was grabbed alone by Stanford University in one of the fastest instances of a tenured faculty job offers when the duo decided to shift to the US in 1978, effectively killing their collaboration, and Amos's untimely death in 1996 didn't leave much room for later reconciliation. The extreme irony of two of the founders of the psychology of decision making falling prey to their own cognitive distortions makes one question about the ability of even the most enlightened mind to see through its own blind-spots when working in isolation. But yet we are nowhere close to reasonably understanding how a three pound chunk of essentially meat can do any of everything it does at all.

Join us in our not-completely-rational attempt to understand our irrationality, and hope that in observing each other's biases, we eventually learn to work around our own.

Assigned Reading/Viewing:

• Daniel Kahneman's Prize Lecture December 8, 2002, at Aula Magna, Stockholm University or transcript.

Note:
1. In case Thinking, Fast and Slow is still fresh in your memory, you may get away by skimming the transcript.
2. This research is decades old and a few of the results have not been reproducible or just outdated.

Location:
Meet us at the Interfaith Chapel on campus. Please RSVP on Meetup to receive more detailed directions.

Parking:
Parking is available on Wilson Blvd, near our venue. A general guide on visitor parking can be found here. A map of some parking is here. The red spaces (reserved) are reserved at all times. The other spaces, I (Ryan) believe, are available to visitors on the weekend, no pass needed. I (Ryan) typically park on Wilson Blvd, which also has no fee on weekends.

Event Details:
This event is welcoming to all. For more details about our group and meeting format, please check out the FAQ.

Questions or Feedback?
If you have any questions or wish to provide feedback, feel free to reach out to us on Meetup.

Best Regards,
Atma & Ryan