Daniel Kahneman: “noise” ruins decisions, AI is a better judge

A judge who gives a harsher sentence because their favorite football team has lost. A doctor whose diagnosis was influenced by their breakfast. A recruiter whose mood makes them see similar candidates completely differently. All of them use their “best judgment” when making decisions. But the best isn’t always good enough.

Daniel Kahneman, psychologist, economist, and Nobel prize winner, dedicated his life’s work to the topics of decision making and behavioral economics. The author of the bestseller ‘Thinking, Fast and Slow’, has just published a new book called ‘Noise’. Once again, it illustrates how humankind often just… doesn’t make any sense. Our decisions are deeply flawed, and Kahneman thinks the ever-present noise has something to do with that. With the age of AI upon us, whose decisions will win? 

How we think

In ‘Thinking, Fast and Slow’, Kahneman explains that we use two systems of thinking. The first is fast, instinctive, and emotional; the second is deliberate, slow, and based on logic. You’d probably agree with his thesis that System 1 is the boss: there’s no time to approach every single decision with the precision of System 2. To put it simply, in order to not overload your brain, not all of your choices can be reasonable.

And while your best judgment doesn’t necessarily mean you’re making good decisions, most of the time, the intuitive System 1 is guiding you well. If you train it long enough, you could even reach a so-called “expert intuition“: something that a great tennis player or an experienced firefighter possesses when they predict what will happen next. When you’re about to make an important decision, slow down. Maybe it’s time for System 2 to kick in. And it could be the time to listen: do you hear any noise?

Eliminating noise

Kahneman’s new book focuses on the concept of “noise” disturbing our predictions and decisions. The noise is everywhere: it’s a “variability in judgments that should be identical”, and the psychologist believes there’s too much of it. It’s not the same as bias: bias is consistent, noise is random. And more often than not, it appears in organizations, societies, and even countries.

“System noise is not a phenomenon within the individual; it’s a phenomenon within an organization or within a system that is supposed to come to decisions that are uniform. You have to look statistically at a great number of cases. And then you see noise,” Kahneman said for The Guardian.

Kahneman believes that “judgment is not the place to express your individuality”. At the same time, he doesn’t think you should completely abandon your intuition: it simply needs to be “informed, disciplined and delayed”. Just wait it out before you make the call. 

While it’s possible to eliminate noise, it doesn’t always make sense. The thing is, it takes significant determination and resources to ensure objective, fair human decisions. 

If a school beauty pageant organized for fun chooses a “wrong” winner, it stings slightly. But it’s not as painful (and expensive) as a company making a wrong strategic hire. In the second case, it’s reasonable to conduct several interviews by several people who compare notes only after they wrote them. The bigger the group, the more objective the decision. 

The noise, decisions, and technology

Governments around the world had to make snap decisions about an unprecedented pandemic. Some fared worse than others, and that’s not at all surprising. Kahneman says that an exponential phenomenon such as the spread of the virus is “almost impossible for us to grasp”, because humans operate efficiently in linear scenarios. “We’re not equipped for it. It takes a long time to educate intuition,” he explained for The Guardian. 

But the exponential world seems inevitable, considering the speed of technological advancement. What will linear people do? “Clearly, AI is going to win [against human intelligence]. It’s not even close. How people are going to adjust to this is a fascinating problem – but one for my children and grandchildren, not me,” Kahneman predicts. 

There’s a slight hurdle at this point in time: our expectations from technology are sky-high. We won’t forgive and forget if just one flying car falls from the sky or one self-driving car crashes. “Being a lot safer than people is not going to be enough. The factor by which they have to be more safe than humans is really very high,” he explains.

That’s not exactly logical: just as all the vaccination doubts and fears aren’t. We simply tend to believe humans more than anything artificial, despite our apparent flaws. “People are willing to take far, far fewer risks when they face vaccination than when they face the disease,” Kahneman illustrates. 

So if you’re about to make a significant decision, check those Systems of yours. Hear any “noise”? Good: now that you know, you can do something about it. 

Cover Photo credit nrkbeta.no

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