The Undoing Project by Michael Lewis (Non Fiction)

Fascinating book about the birth of the field now known as Behavioral Economics. Part biography, part history, part research summary, this is the story both of the evolution of a friendship and collaboration as well as the melding of two previously disconnected fields: Economics and Psychology.

After their first meeting around 1968, Amos Tversky and Daniel Kahneman were rarely apart. The decades long tight collaboration that resulted produced a stunning number of key insights and seminal papers on the psychology of Judgement and Decision Making. The primary idea: there is systematic bias in the way people make decisions. Their work was responsible for the fall of the concept of the “rational man.”

They studied the cognitive basis for common human errors and elaborated on a set of heuristics (simple rules) and cognitive biases that subconsciously influenced the way people formed judgements or made decisions. Many of the resulting concepts — such as Anchoring, Framing, Hindsight, and the Halo Effect — have become household terms. Their “Prospect Theory,” created in 1979 and developed in 1992, was a “psychologically more accurate” description of how people made decisions, replacing the previously accepted Utility Theory which claimed that people made decisions by rationally calculating the utility (or value) of all potential outcomes. Applications of this work are widespread, ranging across medicine (evidence based medicine), sports, finance, and military uses.

Some of the heuristics:
• Representativeness heuristic: the decision making shortcut that determines probability based on how well the subject is representative of a stereotype.
• Availability heuristic: the mental shortcut that makes decisions based on examples that come immediately to mind.
• Anchoring and adjustment heuristic: the influence of a previously suggested reference point (the anchor) on a person’s assessment of probability.
• Simulation heuristic: the shortcut for determining an event based on how easy it is to imagine – or “the power of unrealized possibilities to contaminate people’s minds.”

Some of the biases
• Recency bias: Decision making based on the relative ease of remembering something that happened recently rather than long ago.
• Vividness bias: bias based on the ease with which an option can be recalled.
• Hindsight bias: the tendency of people to overestimate their ability to have predicted an outcome that they could not have possibly predicted.
• Present bias: The tendency of people to undervalue future with respect to present.

The structure of the book follows the story of the two men. Though the closest of friends and collaborators until the last few years of Tversky’s life, their personalities and background were quite different. While both Israeli, Amos came from an aggressive Zionist family, while Danny and his family escaped from Nazi Europe; Danny was an appeaser, Amos a bully; Amos loved theory while Danny liked practical application of psychology, “Amos was built to fight, Danny was built to survive.” The book includes captivating detail about their backgrounds and interactions, and the process by which the work took flight and captured the interest of researchers and practitioners around the world.

The journalistic style of the story makes the personal bits easy to remember, with the research results a little harder to grasp in its entirety. The narrative jumps around a bit and the down side of watching a theory evolve (and not necessarily in a linear order) is that it can be harder to comprehend the whole. I found reading the Wikipedia articles on Kahneman and Tversky helped supplement my understanding of the actual work.

Some great quotes:
Asked if their work was related to AI, Amos said: “We study natural stupidity instead of Artificial Intelligence.”

In response to evolutionary psychology proponents Amos said, “The mind was more like a coping mechanism than it was a perfectly designed tool.”

On “Creeping determinism,” Amos says: “He who sees the past as surprise-free is bound to have a future full of surprises.”

“Economics was meant to be the study of an aspect of human nature, but it had ceased to pay attention to human nature.”

“Theories for Amos were like mental pockets or briefcases, places to put the ideas you wanted to keep.”

Professor Chandra Follows His Bliss by Rajeev Balasubramanyam

I received a complimentary copy of this book from Random House Publishing Group through NetGalley. Opinions expressed in this review are completely my own. The book will be published on March 26, 2019.
Writing: 5 Plot: 4.5 Characters: 4.5

69-year old leading Cambridge economist Professor Chandra is a shoe-in for the Nobel prize in Economics — except that he doesn’t get it. Divorced, distant from his three children, and frustrated with the new tenor of academic life, this “non event” coupled with a silent heart attack sends him off on an unintended, Siddhartha-like quest for personal enlightenment (naturally starting with a sabbatical at UC Bella Vista in Southern California).

His journey takes him to unlikely places — both physical and emotional. He is tricked into attending a weekend workshop at Esalen; he visits his ex-wife and new, annoying husband in Boulder in order to see his troubled daughter Jasmine; he searches for a way to reach his middle daughter Radha — an angry Marxist who hasn’t spoken to her conservative father in over two years; and visits his son Sunil’s highly successful Hong Kong-based “School for Mindful Business” (based on principles completely antithetical to his own). He learns that he is human and not infallible and finds himself more OK with that than he would have expected.

Excellent and insightful writing — wry and witty with deliciously pithy and often hysterical articulations of his evolving viewpoints. Lots of interesting commentary about psychology, economics, spirituality, achievement and the personal search for meaning and happiness.  I appreciate that while he learns more about himself, his priorities, and his relationships, he does not relinquish his intellectual interests or accomplishments.

Some great lines:

Brief but scathing summary of the identity politics Radha adheres to:
“‘West’ … ‘bourgeois’ … ‘capitalist’ … these words would fly from her lips like tiny swastikas, her knuckles turning white, her jaw clenched, her eyes hard as Siberian pickaxes as she sentenced most of the world to the gulag for their crimes against ideology.”

“An Indian Miss Havisham with an Emeritus Professorship and a takeaway menu.”

“… but he couldn’t help believing meditation was best suited to those with less mind to be mindful of: sociologists, for example, or geologists”

“Humans were like those snowflakes against the window, buffeted by winds no one understood.”

“Chandra accepted the phone as if he’d been handed a small but quite genuine lump of plutonium.”

“They seem to come pre-offended, forsaking any analytical content in favor of emotion and outrage.”

“But the undergraduates were even worse than in Cambridge: arrogant, unhygenic, and brazen, convinced that lazy platitudes and fallacious arguments would earn them nothing but praise if delivered with sufficient conviction.”

“King’s was Chandra’s least favorite college. It was the intellectual equivalent of a Disney princess, fluttering its eyelashes at tourists who didn’t know any better.”

“It was what Chandra loathed most about liberals — their shameless self-righteousness, as if the species’ failings were always someone else’s fault, while anything they did, murder and arson included, were heroic acts in the service of liberty and justice.”