Thinking Fast and Slow

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protagonist
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Re: Thinking Fast and Slow

Post by protagonist »

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mrk
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Re: Thinking Fast and Slow

Post by mrk »

I recently listened to Thinking Fast and Slow, and I found the discussion on reversion to the mean to be accurate. I think you have misunderstood the points and/or are applying them incorrectly.

I don't have the text, so I can't nitpick over his exact words. I also don't recall him actually defining reversion to the mean (he only describes its characteristics), but the characteristics he describes are accurate (he did not assume common fallacies).

Significant to the discussion of reversion to the mean and to the examples he uses (and his more important point) is the discussion of incorporating base rates in statistical assessments (or more generally, including all available information...base rates being an important example).

Firstly, reversion to the mean is not a causal phenomenon, and it is not a compensating phenomena. It is a phenomena that is observed when when you sample from a random distribution and is a consequence of the independence of the samples. Kahneman doesn't describe it as being causal or compensating.

If you observe an extreme value, subsequent observations are likely to be less extreme -- not because the original extreme value causes or influences the next value but because extreme values are rare. The next sample is random, and you are comparing it to an extreme value.

For example: If you happen to sample a distribution at the 95% cumulative probability, then the next sample has a 95% probably of being less than the first value.
protagonist wrote: Sat Jul 04, 2020 5:58 pm He starts with two anecdotes about two fighter pilot cadets and two golfers, and you know nothing about how they have performed previously at their respective tasks or how good they are at them.
You just know that one cadet performed particularly poorly on a single maneuver and the other performed particularly well. For the golfers, par was 72...one shot a 66 and the other shot a 77.
If I read Kahneman correctly his point was, because of "regression to the mean", the likelihood is that the cadet who performed poorly on that one trial will do better ON THE NEXT TRY and the one who aced it would not perform as well. Likewise, the golfer who shot a 66 would, on his next round, probably do worse and the one who shot a 77 would probably do better.
That makes no sense at all to me.
In the golf example:

Kahneman isn't suggesting that regression to the mean is causal...it is a consequence of sampling and comparing to extreme values. His claim is that both scores of 66 and 77 are likely extreme values, and because they are extreme values, you will likely see a reversion to the mean from both golfers. That is:
  • The golfer who shot 66 is likely to next shoot worse that 66.
  • The golfer who shot 77 is likely to next shoot better than 77.
Note:
  • He isn't saying the golfer who shot 77 will next shoot better than the golfer who shot 66.
  • He is also making a statistical statement applicable, for example, to "golfers from the class who just shot 66." He is not making a deterministic prediction of any specific golfer.
He makes the assessment about likely extreme values by applying the base rate.

You know that Golfer A shot 66, and Golfer B shot 77. You know nothing else specific about each golfer. But you do have more information: par is 72, and these golfers came from a pool of golfers who average par.

The information about the pool of golfers is important, and if you ignore it, your assessments will be biased and wrong.
  • 66 is NOT the best estimate of the mean score for Golfer A.
  • 77 is NOT the best estimate of the mean score for Golfer B.
Golfer A could be an exceptional golfer who had and average day, an average golfer who had an exceptional day, or something else on a spectrum. What is more likely? This question is important.

Consider these questions:

Question 1: Given a randomly selected golfer, what is the probability that he will shoot <= 66 on his next round of golf?

Question 2: Given a specific golfer who last shot 66, what is the probability that she will shoot <= 66 on her next round of golf?"

If you consider only the known scores from the two golfers, Question 1 is unanswerable and Question 2 is 50%...but is this correct?

Question 1 is not unanswerable (you do have additional information about golf scores). The probability in Question 2 is higher than Question 1, but it is not 50%. Just because you have a tiny amount of specific information does not mean you should throw out the general information.

To answer both questions accurately, you need to consider how common a round of 66 is and who shoots rounds of 66...and estimates of these values is better than ignoring them.

You can use Bayes' theorem to estimate these questions.

Assume the following made up numbers:
  • 50% of golf scores are <= to the golfer's handicap
  • 1% of golfers in a class have a handicap <= 66
  • 10% of golf scores from the class are <= 66
Then:
  • The probability that the golfer who just scored a 66 has a handicap <= 66 is 5%...and, therefore, the probability that she will score worse than 66 on her next round is 95%...reversion to the mean. A score of 66 is more likely a result of an average golfer having a good day...because exceptional golfers are rare.
protagonist wrote: Sat Jul 04, 2020 5:58 pm A more logical assumption , I would think (which Kahneman seems to reject) , would be that the pilot who performed better is probably a better pilot than the other one, and the golfer who performed worse is probably not as good a golfer, but since we only have one data point on which to base our opinions, there is a HUGE margin of error in our guesses and we should see how they perform in the future on sequential trials before coming to conclusions. (FWIW, if I ever shot a 77 in a round of golf it would be such an incredible stroke of luck, akin to a monkey typing the entire works of Shakespeare, and I would probably NEVER do better for the rest of my life!).
Kahneman DOES NOT reject this assumption. He ACCEPTS that Golfer A is likely better than Golfer B. Kahneman would say that Golfer A is likely better than Golfer B, but:
  • Golfer A is likely not as good as 66 would suggest
  • Golfer B is likely not as bad as 77 would suggest
  • The likely difference between Golfers A and B is less than 77-66 = 11 strokes
mrk
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Re: Thinking Fast and Slow

Post by mrk »

I think you are consistently misinterpreting and misapplying the points made about regression to the mean. As a result, you are rejecting concepts that you shouldn't based on false counter examples and counter arguments.
protagonist wrote: Sun Jul 05, 2020 12:12 pm Even if what you say is true....that I may have misread the text and he was only focused on the outliers....there is no reason to believe that the one with the best performance would not give the best performance again the second time around, simply because he was the best pilot, and the opposite would be true for the one with the worst performance.
This is an over extension of the principle and a rejection of a claim that isn't made.

If you apply the principles in the book, you would say the high performer is statistically more likely to be better than the low performer on repeated trials, and vice versa. (But you would update your predictions with each new trail.)

So the claim that you are refuting is not actually being made. It isn't the natural and required result of accepting regression to the mean.

But you would also say the high performer is likely not as good as the single high performance would indicate, and the low performer is likely not as bad as the single low performance would indicate.

This assessment is arrived at by including the base rate information...information that you have, in addition to the specific information about each individual, about the population that your individuals came from.

This general information is important. But as you have more specific information, the general information becomes less important. At the point of having only one specific measure, you don't have much specific information.

The general principle is that you should include all the information that you have properly weighted by its value. In his examples, you have one specific piece of information and base rate information...and you should not exclude the base rate information.
Listen to Beethoven's Fifth (or watch Tiger Woods play golf on an "ordinary" day for him), and you are pretty sure they are great at what they do. The next thing they do may not be as good, or may even be better , but there is no reason to assume "regression to the mean" on their next performance. There was good reason that, after hearing Meet the Beatles (which was a HUGE outlier in early 1964), that rock fans and music execs. (correctly) anticipated , and got, more greatness in the future.
In this case, you are suggesting that you are meant to throw out information (specific information that reveals Beethoven's, or Tiger Woods', or the Beatles greatness), which is not suggested...it violates the principle of using all your information.

If you listen to Beethoven, or watch Tiger Woods, or hear Meet the Beatles, you have much more specific information than a single performance measure from an unknown, random individual.

These cases are nothing like the simple examples in the book.

On the contrary, the books tell you to include all your available information properly weighted by its value. But the book does not tell you how to do this in a complex situation...and it can be done poorly.
protagonist wrote: Sun Jul 05, 2020 12:12 pm If I believed regression to the mean (or almost anything with margins of error) was inevitable, I would have put all my money into shorting Google, Amazon and Facebook stock a decade ago and I would be broke and homeless by now. And to add to the problem, he seems to think that it can be expected to happen in the very short term.
This is a misapplication of the principle and a straw man. Belief in regression to the mean does not require this or advise this.

Firstly, in selecting and assessing Google, Amazon, and Facebook, you have much more information than a single, specific performance metric. Your assessment of these companies is not based on a single annual (or, maybe more analogously, daily!) return value. You aren't meant to throw out information to focus on some small piece of data.

Additionally, regression to the mean is an observation of random samples. Stock performance is not random. Some aspects of stock performance can be approximated as random, and some aspects cannot. Investing is much more complex than the simple examples given in the book.

Finally, the long run performance for Google, Amazon, and Facebook is not decided. In the long run, they will all likely cease to exist. But many people will go bankrupt shorting their stock in the mean time. Your investment strategy needs to be more sophisticated than considering only the long run behavior.

Maybe Kahneman states his case too assertively, with too much confidence, and with hyperbole...maybe he invites misinterpretation and misapplication. I think he does. But I think his discussion of reversion to the mean is valid.
protagonist
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Re: Thinking Fast and Slow

Post by protagonist »

mrk wrote: Sun Jul 05, 2020 4:09 pm
Listen to Beethoven's Fifth (or watch Tiger Woods play golf on an "ordinary" day for him), and you are pretty sure they are great at what they do. The next thing they do may not be as good, or may even be better , but there is no reason to assume "regression to the mean" on their next performance. There was good reason that, after hearing Meet the Beatles (which was a HUGE outlier in early 1964), that rock fans and music execs. (correctly) anticipated , and got, more greatness in the future.
In this case, you are suggesting that you are meant to throw out information (specific information that reveals Beethoven's, or Tiger Woods', or the Beatles greatness), which is not suggested...it violates the principle of using all your information.

If you listen to Beethoven, or watch Tiger Woods, or hear Meet the Beatles, you have much more specific information than a single performance measure from an unknown, random individual.

These cases are nothing like the simple examples in the book.

On the contrary, the books tell you to include all your available information properly weighted by its value. But the book does not tell you how to do this in a complex situation...and it can be done poorly.
protagonist wrote: Sun Jul 05, 2020 12:12 pm If I believed regression to the mean (or almost anything with margins of error) was inevitable, I would have put all my money into shorting Google, Amazon and Facebook stock a decade ago and I would be broke and homeless by now. And to add to the problem, he seems to think that it can be expected to happen in the very short term.
This is a misapplication of the principle and a straw man. Belief in regression to the mean does not require this or advise this.

Firstly, in selecting and assessing Google, Amazon, and Facebook, you have much more information than a single, specific performance metric. Your assessment of these companies is not based on a single annual (or, maybe more analogously, daily!) return value. You aren't meant to throw out information to focus on some small piece of data.

Additionally, regression to the mean is an observation of random samples. Stock performance is not random. Some aspects of stock performance can be approximated as random, and some aspects cannot. Investing is much more complex than the simple examples given in the book.

Finally, the long run performance for Google, Amazon, and Facebook is not decided. In the long run, they will all likely cease to exist. But many people will go bankrupt shorting their stock in the mean time. Your investment strategy needs to be more sophisticated than considering only the long run behavior.

Maybe Kahneman states his case too assertively, with too much confidence, and with hyperbole...maybe he invites misinterpretation and misapplication. I think he does. But I think his discussion of reversion to the mean is valid.
Unless I read it wrong, I think that was EXACTLY what Kahneman was asserting ...that he had NO MORE specific information than a single performance measure from an unknown, random individual. YOu had only one piece of data....a golfer who shot over par on one game and another who shot under....a cadet who performed a bad maneuver and another who performed a good one. If he knew that the one who shot 66 was Tiger, for example, I would agree.

I also didn't mean to imply that Kahneman's conclusion was that the one with the better score would likely beat the other one in the next round...just that the one with the better score would score closer to par the next round. But you DON'T know who that person is. Maybe the one who shot 77 was Tiger on a bad day. Still, if my experience on that court is that most people shoot around 100, and some unknown player comes along and shoots a 77, if I was forced to bet on a six-point range re: what his score would be on his next round, I would still bet on 74-80 (knowing there is a huge margin of error and I could well be wrong since I only have one data point and no more info. to go on.

If one could assume regression to the population mean as most likely for a totally unknown individual with only one data point available on their next try, sports betting would be easy. Same with stock investing or any other gamble.

And I don't know why you would say that you have any more information, from listening to your first Beethoven symphony (assuming you never heard of him before), than one data point. Nor why, if all you knew was how well Amazon stock did yesterday, you could assume that its performance would revert to the mean and you should have bet against its performance today. Unless I really read him wrong, those are analogous to K's examples. Of course if you had more info to go on you could make a better judgment.

By the way, I don't have a problem at all with the concept of regression to the mean. I only have a problem with the way Kahneman is applying it, which suggests to me that he either doesn't understand the concept himself or he is trying to fit a round peg in a square hole (confirmation bias?).

(One critique I read stated that , in fact, a "hot hand" was shown to be a real thing in subsequent research to that which K. quoted. If that is true, Auerbach was fortunate that he did not take K.'s advice).
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Re: Thinking Fast and Slow

Post by mrk »

His discussion of regression to the mean is tied up with his discussion of base rates, unfortunately. (And more generally, the idea that you should use all available information.)

His two examples are better assessed by considering base rates, and then you can interpret the results from a perspective of regression to the mean. It is much less informative to use regression to the mean as causal explanation...especially since regression to the mean is not causal...it is a resultant characteristic of random samples.

That is, it is better to think in terms of "because this system has these characteristics, you will observe regression to the mean following certain observations," rather than "because of regression to the mean, this system will have these behaviors."

So, does the system have the characteristics that will lead to regression to the mean? Is it a random system? Have you sampled an extreme value? If yes, you should "expect" reversion to the mean (that is, it is most likely, but it is not guaranteed).
protagonist wrote: Sun Jul 05, 2020 4:47 pm Unless I read it wrong, I think that was EXACTLY what Kahneman was asserting ...that he had NO MORE specific information than a single performance measure from an unknown, random individual. YOu had only one piece of data....a golfer who shot over par on one game and another who shot under....a cadet who performed a bad maneuver and another who performed a good one. If he knew that the one who shot 66 was Tiger, for example, I would agree.
In his examples, you do not have only one piece of information for each individual. You have one piece of SPECIFIC information for each individual, AND you have base rate information, AND the base rate information is important for making predictions about individuals you don't know much about.

His point about base rate information is that you should not discount it. It is relevant. It is valuable. You should include it, and you should weight it, and its weight will be higher the less you know about the specific individual. This is very important, and it is true, and it is critical to his examples.

Kahneman is not saying that the person who shoots 77 WILL shoot better on the next round. He is saying that the 50/50 probability point is between 77 and par (maybe 75 +/- 4)...it is not centered on 77 (In his example, I think his population of players averaged par...they were not the average population who average 100, or whatever.) And that is only for the prediction of the next score. Once the second score is realized, you should update your predictions of subsequent scores using the new, additional information. (With each update resulting in a better prediction.) Note: He is not saying these are good predictions without significant uncertainty...he is only describing where the center of the prediction should reside.

The person who shot 66 is easier to consider, because 66 is more obviously a very good score.

If an individual shoots 66 one time, and you know nothing else other than the general distribution of golf scores, you shouldn't guess that their next score is in the range of 62 to 70 (66 +/- 4)...because you DO have information on the general distribution of golf scores. To do so doesn't account for how good a 66 is (and how rare a 66 average is). You know 66 is very good. You know people who average 66 or better are not common.

Specifically, scores of 66 or better are more common than golfers who average 66 or better. Some golfers who average 68 will shoot 66, some golfers who shoot 70 will shoot 66, etc. And those golfers who are less spectacular are more common than golfers who average 66 or better.

An average golfer would likely never shoot 66. You rightfully expect the golfer who shoots 66 to be above average, but you should not expect them to average 66.

As discussed in the book, you can use Bayes' theorem to calculate conditional probabilities. (e.g. What is the probability a golfer has a handicap of 66 or better given he just shot a score of 66?).

If a score of 66 or better is more common than a golfer who averages 66 or better (which seems obviously true), then a golfer who scores 66 is more likely to average something less than 66 than better. So a golfer who scores 66 is more likely to score worse than 66 on their next round. They are not likely average. They are not likely to ever revert to the population average...but their subsequent scores will likely revert toward average (i.e. to their own average...which is less than 66).
protagonist wrote: Sun Jul 05, 2020 4:47 pm If one could assume regression to the population mean as most likely for a totally unknown individual with only one data point available on their next try, sports betting would be easy. Same with stock investing or any other gamble.
They will not revert TO the population mean as in to match the population mean, they are more likely to revert TOWARD the mean. More precisely, they will move to their own mean, which is most likely (but not guaranteed) to be toward the population mean.
protagonist wrote: Sun Jul 05, 2020 4:47 pm And I don't know why you would say that you have any more information, from listening to your first Beethoven symphony (assuming you never heard of him before), than one data point. Nor why, if all you knew was how well Amazon stock did yesterday, you could assume that its performance would revert to the mean and you should have bet against its performance today. Unless I really read him wrong, those are analogous to K's examples. Of course if you had more info to go on you could make a better judgment.
If you listen to Beethoven and ascertain anything about his greatness, you are pulling on all sorts of knowledge of music...what is good, what exists, etc. That definitely is "additional information" that you are using to assess Beethoven. If you have no experience to pull from, if you have no knowledge of music, you can't very well assess his relative greatness. You might decide you like it, but you can't compare it to anything.

If all you know is the one day return on a random day for a random stock, you would not predict that it WILL move to the mean, but it is the best guess given the sparse information. But it is also a poor, low probability guess that you shouldn't and wouldn't act on.

To come back to reversion to the mean...

In his examples, Kahneman incorporates base rates with limited, specific performance data to judge that the specific performances are likely extreme values. Because the specific values are likely extreme values, and because they have been selected randomly (or at least have a significantly random component), you should conclude reversion to the mean is likely. In all cases, "to" should be interpreted as "toward"...they are likely to move toward the mean. That doesn't mean they will equal the mean in the long run.
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Re: Thinking Fast and Slow

Post by junior »

I read this book recently. Since psychologists can't read people's minds or really directly examine how thoughts are generated by the brain you have to assume when reading any psychology book that some of the authors beliefs are false. How much of the book is false is left as an exercise for the reader.

There's also the fun bit (if I recall correctly) where he says he was the best at hiring people in the Israeli army and he knows this because he checked his own work and gave himself an A+. This sort of thing should raise an eyebrow.
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Re: Thinking Fast and Slow

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protagonist wrote: Sun Jul 05, 2020 12:12 pm But then he ruined it at the end of the chapter when he described "the INEVITABILITY of regression" (his exact words).
Kahneman's point is that regression is inevitable for phenomena with randomly distributed events, not that it's inevitable for all phenomena and events.
protagonist wrote: Sun Jul 05, 2020 12:12 pmIf I believed regression to the mean (or almost anything with margins of error) was inevitable, I would have put all my money into shorting Google, Amazon and Facebook stock a decade ago and I would be broke and homeless by now. And to add to the problem, he seems to think that it can be expected to happen in the very short term.
My understanding of Kahneman's short-term examples is that in certain fields--e.g., flying planes, playing golf--the day-to-day performance is fairly random even as over long term performance is improving. The same is true for stocks: you can't tell how much Google, Amazon, or Facebook will be worth tomorrow or even in a couple months. Projecting stock prices into a remote future is different from projecting piloting or golfing performance: there are physical limits on how good a pilot or a golfer get, but not how high the stock would go. As I am typing this, the NPR reports that Jeff Bezos is the richest man in the world, by far, even after his divorce.
protagonist wrote: Sun Jul 05, 2020 12:12 pmInteresting that the whole section is dedicated to discussing the error of "overconfidence", when nobody seems more overconfident in his ideas (and blind to their fallacies) than the author.
Kahneman is probably the most humble of social scientists. I've listened to many of his recorded lectures, and so when I am reading and rereading his book, I have some understanding of where he is coming from. To understand Kahneman's story and personality you may consider a book by Michael Lewis "The Undoing Project." (This is the Michael Lewis who wrote "The Big Short," "Moneyball," "Liar's Poker" and other books.)

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Re: Thinking Fast and Slow

Post by stoptothink »

VictoriaF wrote: Mon Jul 06, 2020 8:02 am To understand Kahneman's story and personality you may consider a book by Michael Lewis "The Undoing Project." (This is the Michael Lewis who wrote "The Big Short," "Moneyball," "Liar's Poker" and other books.)

Victoria
Great book. Far more enjoyable to me than "Thinking Fast and Slow". Behavioral economics is one of my favorite areas of research to read about, but I shared many of the same issues with this book as others have mentioned.
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Re: Thinking Fast and Slow

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VictoriaF wrote: Mon Jul 06, 2020 8:02 am
My understanding of Kahneman's short-term examples is that in certain fields--e.g., flying planes, playing golf--the day-to-day performance is fairly random even as over long term performance is improving.
His point is not about day to day performance as such since he gives an examples of annual results of branches of a business and suggests you can use reversion to the mean as a concept for next year's results.

My take is as follows: his point seems to be that luck is always a factor in these results so to the extent luck influenced the performance it can be expected to revert to the mean.

But he doesn't present a way to know how much of a golfing performance is luck and how much is skill in the example where you only know the golf results from day one. He basically says "assume much of the result is luck and the successful golfer will do worse in the future and the bad golfer will do better. But since it's not all about luck the successful golfer will perhaps still outperform the golfer with worse results."

But that raises a problem: How am I to know to what extent a result is random whether than based on skill? In the golf example I seem to have to take a guess.
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Re: Thinking Fast and Slow

Post by protagonist »

VictoriaF wrote: Mon Jul 06, 2020 8:02 am As I am typing this, the NPR reports that Jeff Bezos is the richest man in the world, by far, even after his divorce.

Victoria

I predicted about a decade ago that Bezos would be the world's first trillionaire by 2025. I don't know if that was mostly Sys 1 or Sys 2 that led me to that conclusion, and if I turn out to be right, I still don't think it's anything for me to brag about. When I used to pick stocks I didn't beat the market.

Regarding your reference to Michael Lewis, the only Michael Lewis book I read was Flash Boys and I liked it a lot. I also really liked the movie The Big Short. I just read this very interesting response by Lewis a year after publishing Flash Boys. That was over 5 years ago. I wonder what the predatory high frequency trading situation is like now vs.when he published in 2014. I would love to see a second edition. https://www.vanityfair.com/news/2015/03 ... eal%20news.

I also read Nate Silver's book "The Signal and the Noise" (there is some overlap with Kahneman's thinking) and liked that a lot as well, though not much of the info was new to me (I taught statistics at university many years ago...and I have read a fair amount about chaos/complexity theory... so I was very familiar with many of the concepts.) There was nothing that I recall that I disagreed with, his research seemed solid, he presented his points well and in a very readable and comprehensible fashion, and I would highly recommend the book to both the general public and anybody who wants to learn more about the subject (it is very pertinent since health, wealth, happiness, and even survival are constantly dependent on the accuracy of our predictions).

More on Kahneman later.
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Re: Thinking Fast and Slow

Post by VictoriaF »

junior wrote: Mon Jul 06, 2020 9:51 am But that raises a problem: How am I to know to what extent a result is random whether than based on skill? In the golf example I seem to have to take a guess.
Michael Mauboussin's test of skill vs luck is: Can you intentionally get a bad result? With skill you can, with luck you can't.

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Re: Thinking Fast and Slow

Post by protagonist »

VictoriaF wrote: Tue Jul 07, 2020 7:31 am
junior wrote: Mon Jul 06, 2020 9:51 am But that raises a problem: How am I to know to what extent a result is random whether than based on skill? In the golf example I seem to have to take a guess.
Michael Mauboussin's test of skill vs luck is: Can you intentionally get a bad result? With skill you can, with luck you can't.

Victoria
If I shot 18 holes of golf (I have no skill), I would expect, by luck, I would get a bad score. And if I tried my hardest to get a bad score, I would still get a bad score.

Oh, I read the next two chapters of TFAS , about the 'illusion of validity" and pitting algorithms against intuition. He expressed a lot of good ideas.

He once again lost me with his quoted research, however. 20% of radiologists , in assessing whether an x-ray was normal or abnormal, contradicted themselves when re-assessing the same study??? I'm a radiologist. I can understand if they were including mentioning incidental findings of no consequence and calling those "abnormal". Sometimes radiologists call those in their reports, sometimes not, and whether or not any one does on a particular day may be left to chance because they don't matter. But calling real pathology ("abnormal") on one study and then changing their mind ("normal") one time out of five???

Missing, or calling, real pathology often has significant therapeutic consequences. If they missed 20% on oral board exams they would never pass and would never become radiologists . Plus if they did so in practice they would wind up directly responsible for huge amounts of morbidity and mortality and would likely never go a month without a lawsuit. (I am always skeptical of studies with results that are explainable by extremely small sample sizes as well....20% ? I suppose if they had only 5 subjects one of them could have easily made such a mistake. But not 20 out of 100 !!!)

I keep reading for his ideas, which are often interesting and good food for thought, but the science he quotes to support his ideas, without the slightest tinge of skepticism, seems sketchy at best (I am being generous here).
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Re: Thinking Fast and Slow

Post by VictoriaF »

protagonist wrote: Tue Jul 07, 2020 12:18 pm
VictoriaF wrote: Tue Jul 07, 2020 7:31 am
junior wrote: Mon Jul 06, 2020 9:51 am But that raises a problem: How am I to know to what extent a result is random whether than based on skill? In the golf example I seem to have to take a guess.
Michael Mauboussin's test of skill vs luck is: Can you intentionally get a bad result? With skill you can, with luck you can't.

Victoria
If I shot 18 holes of golf (I have no skill), I would expect, by luck, I would get a bad score. And if I tried my hardest to get a bad score, I would still get a bad score.
Mauboussin's point is more nuanced. In almost all fields, for almost all participants, there is a mix of skill and luck. The test of intentional failure is to estimate the proportion of luck. If predicting tonight's closing price of S&P500 is a matter of luck, you can't intentionally lose money by buying S&P500.

In your golf example, there is no skill at all, by your admission. There is pure (absence of) skill, and no element of luck.

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Re: Thinking Fast and Slow

Post by VictoriaF »

protagonist wrote: Tue Jul 07, 2020 12:18 pm He once again lost me with his quoted research, however. 20% of radiologists , in assessing whether an x-ray was normal or abnormal, contradicted themselves when re-assessing the same study??? I'm a radiologist. I can understand if they were including mentioning incidental findings of no consequence and calling those "abnormal". Sometimes radiologists call those in their reports, sometimes not, and whether or not any one does on a particular day may be left to chance because they don't matter. But calling real pathology ("abnormal") on one study and then changing their mind ("normal") one time out of five???
Kahneman is writing a new book on noise. He says that he is now attuned to the differences among members of a group in addition to universal biases of every member of a group. He ran an experiment at an insurance company. The company has constructed a test case and gave it to 50 underwriters. They expected 10% variance among underwriters, but it was close to 50%. The premiums calculated by different underwriters who followed the same principles and policies, for the same case varied by 50%!

My skill in radiology rivals your skill in golf. My guess is that radiologists don't just say "normal image" or "abnormal image" but also provide their evaluations of various spots they see on the image. The noise in radiology could be represented by the number of identified problematic spots and their assessments.

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Re: Thinking Fast and Slow

Post by protagonist »

VictoriaF wrote: Wed Jul 08, 2020 9:18 am
protagonist wrote: Tue Jul 07, 2020 12:18 pm
VictoriaF wrote: Tue Jul 07, 2020 7:31 am
junior wrote: Mon Jul 06, 2020 9:51 am But that raises a problem: How am I to know to what extent a result is random whether than based on skill? In the golf example I seem to have to take a guess.
Michael Mauboussin's test of skill vs luck is: Can you intentionally get a bad result? With skill you can, with luck you can't.

Victoria
If I shot 18 holes of golf (I have no skill), I would expect, by luck, I would get a bad score. And if I tried my hardest to get a bad score, I would still get a bad score.
Mauboussin's point is more nuanced. In almost all fields, for almost all participants, there is a mix of skill and luck. The test of intentional failure is to estimate the proportion of luck. If predicting tonight's closing price of S&P500 is a matter of luck, you can't intentionally lose money by buying S&P500.

In your golf example, there is no skill at all, by your admission. There is pure (absence of) skill, and no element of luck.

Victoria
I need more nuance.
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Re: Thinking Fast and Slow

Post by protagonist »

VictoriaF wrote: Wed Jul 08, 2020 9:32 am
protagonist wrote: Tue Jul 07, 2020 12:18 pm He once again lost me with his quoted research, however. 20% of radiologists , in assessing whether an x-ray was normal or abnormal, contradicted themselves when re-assessing the same study??? I'm a radiologist. I can understand if they were including mentioning incidental findings of no consequence and calling those "abnormal". Sometimes radiologists call those in their reports, sometimes not, and whether or not any one does on a particular day may be left to chance because they don't matter. But calling real pathology ("abnormal") on one study and then changing their mind ("normal") one time out of five???
Kahneman is writing a new book on noise. He says that he is now attuned to the differences among members of a group in addition to universal biases of every member of a group. He ran an experiment at an insurance company. The company has constructed a test case and gave it to 50 underwriters. They expected 10% variance among underwriters, but it was close to 50%. The premiums calculated by different underwriters who followed the same principles and policies, for the same case varied by 50%!

My skill in radiology rivals your skill in golf. My guess is that radiologists don't just say "normal image" or "abnormal image" but also provide their evaluations of various spots they see on the image. The noise in radiology could be represented by the number of identified problematic spots and their assessments.

Victoria
For many years I was in the position of "over-reading" MRI reports of other radiologists since I had specialty expertise in MRI and was recognized as the "expert" who had the "final word". MRI studies are particularly complicated compared with most other types of radiological studies. I would always first come to my own conclusions about the case before reading the other radiologist's report in order to not subject my opinion to bias. I can't quote statistics, but my being in disagreement with other radiologist's assessments, when it came to significant and meaningful findings, was relatively rare. In the vast majority of cases I agreed with at least the important findings in the original report.
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Re: Thinking Fast and Slow

Post by financial.freedom »

larryswedroe wrote: Wed Jan 04, 2012 12:12 pm The book had been highly recommended to me, here are some of my thoughts

http://www.cbsnews.com/8301-505123_162- ... ColumnArea

Best wishes
Larry
Larry, could you please provide your reference for the following?

One study found that clinicians who were "completely certain" of their diagnosis were wrong 40 percent of the time.

I would think it varies based on specialty, can you please provide the data? Imagine if a pathologist was wrong that frequently, it would be disastrous. When I call a tear on MRI, the sensitivity and specificity is 90% plus when correlated with arthroscopy.

As a data driven forum, I’d appreciate the reference. Thanks
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Re: Thinking Fast and Slow

Post by protagonist »

I read the first chapter in the section on "Choices", entitled "Bernoulli's Errors", where he seems to take the position that people are more risk-averse than expected by a simple, rational choice. I found this chapter very interesting.

He starts with the example of somebody choosing between having a 50% chance of winning $100 or nothing, or accepting a sure thing of %46. Most people would take the $46, despite the fact that by "expected utility theory" (which he claims was the traditional prevailing theory which implies a purely rational choice), it would make more sense to take the gamble with an average gain of $50.

BUT
it seems to me that taking the $46 might be the "rational" choice, and does not imply risk aversion. Let me present a more extreme example of the same gamble to explain:

A person with no money has a choice of accepting $900,000 , or having a 50% chance of winning $2M (vs. zero).

The RATIONAL thing for that person to do would be to take the $900K, because the first $900K would have a lot more EXPECTED UTILITY to her than would an additional $1.1M if she was lucky enough to win the $2M.

The first $900K would buy her a nice house, a new car, and she would still have money left over, whereas if she took the gamble between $2M and nothing, she would stand a 50% chance of being homeless and penniless, and the INCREMENTAL VALUE of the additional $1.1M would be trivial compared with the value of the first $900K (she could afford a nicer home, a newer car and have more savings left over). The EXPECTED UTILITY of the additional $1.1M would not be nearly as great as the first $900K to a rational person in that position.

So choosing to take the $900K (or even $500K in her case) would not be risk-averse. It would be rational.

And to a lesser extent, you could probably say the same thing about taking the definite $46 in Kahneman's example vs. having a 50% chance at $100. It is essentially the same question. The first $46 would be worth more to the individual in their current state than the additional $54. Though if you posed the question to a millionaire, I suspect he might choose the gamble, since both amounts would be relatively trivial to him so why not play the game?

Thinking of it this way would also explain the other gambles in the chapter in rational terms, given the progressively diminishing "expected utility" of greater sums of money.

Risk-aversion need not be postulated to explain them.

(btw, this is the same Bernoulli who came up with the Bernoulli principle, which governs the amount of lift on the wing of an aircraft (or sail on a boat), and the Bernoulli distribution in mathematics, and he did it all in the early 18th century, so he was one SMART dude. Disregarding opinions about his actual proposed weightings of subjective gain based on initial wealth as outlined in Kahneman's book, I would suggest that he was not "in error". His thinking would be consistent with expected utility, though I don't know how the original expected utility theory was worded so it may contradict the theory if it weights every dollar as having the same utility).

Any other thoughts about this?
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Re: Thinking Fast and Slow

Post by VictoriaF »

protagonist wrote: Fri Jul 10, 2020 1:10 pm Any other thoughts about this?
Behavioral economics has emerged as a psychologists' correction of standard economics. According to the normative theory of standard economics, 50% of $2,000,000 is a rational agent's choice when the alternative is $900,000. Kahneman's and Tversky's contribution is that people don't make the same choices as rational agents would. Over time, behavioral economists have developed corrections to some standards economics models to account for biases. A bias, in this context, is a persistent difference between normative choices and real-life choices.

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Re: Thinking Fast and Slow

Post by protagonist »

VictoriaF wrote: Sat Jul 11, 2020 11:20 am
protagonist wrote: Fri Jul 10, 2020 1:10 pm Any other thoughts about this?
Behavioral economics has emerged as a psychologists' correction of standard economics. According to the normative theory of standard economics, 50% of $2,000,000 is a rational agent's choice when the alternative is $900,000. Kahneman's and Tversky's contribution is that people don't make the same choices as rational agents would. Over time, behavioral economists have developed corrections to some standards economics models to account for biases. A bias, in this context, is a persistent difference between normative choices and real-life choices.

Victoria
If the old models (Bernoulli's didn't seem to as I understood the way K. described it) equated a 50% chance of 2M as more RATIONAL than a sure $900K under all circumstances, then I see his point, though, like in the example I gave above, it seems like a sure 900K would be , by far, the RATIONAL (not the BIASED) choice for most people (other than the very rich).

I just finished the next chapter on Prospect Theory.


It left me with a few questions:
1. If people are disproportionately loss-averse, how does that explain the immense popularity of casinos, where people go knowing their chances of losing are greater than their chances of winning, and very few people return with a windfall? I get the lottery, where people stand an overwhelming chance of losing what they consider trivial for a long shot on winning a windfall. But it doesn't explain casinos, horse racing, etc., where the house holds a slim margin. Maybe he addresses that in an upcoming chapter.

2. Clearly a small loss to someone with not a lot of money can be devastating. Who were the subjects in his experiments? I wonder if , for most if not all of his studies, his subjects were almost all, or all, undergraduate students (especially freshmen and sophomores), as is typically the case for psych.experiments performed in academia (or at least was the case when I studied psychology in university). College students are generally poor, despite what their parents are paying for tuition. They live from hand to mouth.

Imagine this VERY typical scenario: a 19 year old student has $500 in the bank and next week has to pay her share of the rent with her roommates. Her share is $425. Wouldn't it be RATIONAL to fear losing $100 much more than winning $200? She would be foolish to accept a bet where she had a 50-50 chance of losing $100 vs. winning $200, or even a 25/75 chance. That's not loss aversion, that's wisdom.

Kahneman mentioned that he could not say how much money he had within tens of thousands of dollars. A 50-50 gamble between a $100 loss vs. a $200 win would make a lot of sense for a guy like Kahneman. He could treat it like a game. If he was worth $5M, and had a large mortgage and no income, a similar scenario to the one I presented with the student would be to risk losing $5M vs winning $10M. Clearly he would be stupid to take that bet, regardless of the odds. That is logic, not loss aversion.

Was this research biased due to the population sampled?
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Re: Thinking Fast and Slow

Post by Fallible »

protagonist wrote: Sat Jul 11, 2020 5:14 pm ...
I just finished the next chapter on Prospect Theory.

It left me with a few questions:
1. If people are disproportionately loss-averse, how does that explain the immense popularity of casinos, where people go knowing their chances of losing are greater than their chances of winning, and very few people return with a windfall? I get the lottery, where people stand an overwhelming chance of losing what they consider trivial for a long shot on winning a windfall. But it doesn't explain casinos, horse racing, etc., where the house holds a slim margin. Maybe he addresses that in an upcoming chapter. ...
A Boglehead simple question: Can't someone be loss averse and still gamble for fun, or be loss averse and an addicted gambler (the addiction overriding all else)?

Also, what did you think of the previous section on "expert intuition"?
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Re: Thinking Fast and Slow

Post by protagonist »

Fallible wrote: Sat Jul 11, 2020 8:01 pm
protagonist wrote: Sat Jul 11, 2020 5:14 pm ...
I just finished the next chapter on Prospect Theory.

It left me with a few questions:
1. If people are disproportionately loss-averse, how does that explain the immense popularity of casinos, where people go knowing their chances of losing are greater than their chances of winning, and very few people return with a windfall? I get the lottery, where people stand an overwhelming chance of losing what they consider trivial for a long shot on winning a windfall. But it doesn't explain casinos, horse racing, etc., where the house holds a slim margin. Maybe he addresses that in an upcoming chapter. ...
A Boglehead simple question: Can't someone be loss averse and still gamble for fun, or be loss averse and an addicted gambler (the addiction overriding all else)?

Also, what did you think of the previous section on "expert intuition"?
I would leave "addicted gamblers" out of the equation because their behavior is acknowledged as pathologic. Most people who frequent casinos, horse tracks, etc. are not addicts. Maybe the "fun" outweighs the "loss aversion", but if people were truly "loss averse"...with more negative feelings associated with loss than positive feelings associated with winning....would they be having fun at casinos?

I suppose you could argue that a person who gambles at casinos is not typical and has less loss aversion than average , just as 19 year old college sophomore research subjects are not typical of the general public in investigating financial risk aversion because they have much more to lose by losing small amounts of money. Maybe MOST people don't go to casinos because of risk aversion. I could accept that possible explanation for casino gambling as being consistent with Kahneman's theory.

Regarding expert intuition, I think many of his ideas make sense to me, but the research he quotes to support his ideas (in which he expresses no doubt whatsoever) makes me very skeptical...see the radiologist example I used above. My problems throughout the book are not with his ideas, it is with the bad science and his overconfidence in any studies that support his ideas (many of which have been debunked). It is particularly disturbing because the book attacks just the kind of biased thinking to which he appears to me to continually fall victim.

I have no doubt that "experts" are often overconfident , and also that they have a distorted perspective of reality based on the "group-think" of their subculture (in which they have expertise), and thus they are prone to errors that people outside their particular field with nothing invested (emotionally, intellectually or financially) may be able to see more clearly.
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Re: Thinking Fast and Slow

Post by Fallible »

protagonist wrote: Sat Jul 11, 2020 8:35 pm
Fallible wrote: Sat Jul 11, 2020 8:01 pm
protagonist wrote: Sat Jul 11, 2020 5:14 pm ...
I just finished the next chapter on Prospect Theory.

It left me with a few questions:
1. If people are disproportionately loss-averse, how does that explain the immense popularity of casinos, where people go knowing their chances of losing are greater than their chances of winning, and very few people return with a windfall? I get the lottery, where people stand an overwhelming chance of losing what they consider trivial for a long shot on winning a windfall. But it doesn't explain casinos, horse racing, etc., where the house holds a slim margin. Maybe he addresses that in an upcoming chapter. ...
A Boglehead simple question: Can't someone be loss averse and still gamble for fun, or be loss averse and an addicted gambler (the addiction overriding all else)?

Also, what did you think of the previous section on "expert intuition"?
I would leave "addicted gamblers" out of the equation because their behavior is acknowledged as pathologic. Most people who frequent casinos, horse tracks, etc. are not addicts. Maybe the "fun" outweighs the "loss aversion", but if people were truly "loss averse"...with more negative feelings associated with loss than positive feelings associated with winning....would they be having fun at casinos? ...
Although I haven't gone to a casino in some years now, I had fun when I did and I'm loss averse and probably a typical case of it,e.g., a diehard passive investor, a frugal spender, etc. Surely there's plenty of room in the brain for opposing forces such as loss aversion in some aspects of life overridden in others by, say, addiction. How that can happen is the subject of much research so nothing new here.

What I liked about "expert intuition" is Kahneman's emphasis on extensive experience and ability before "expert" can kick in and intuition is more likely to be accurate.
"Yes, investing is simple. But it is not easy, for it requires discipline, patience, steadfastness, and that most uncommon of all gifts, common sense." ~Jack Bogle
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Re: Thinking Fast and Slow

Post by protagonist »

Fallible wrote: Sun Jul 12, 2020 10:56 am
protagonist wrote: Sat Jul 11, 2020 8:35 pm
Fallible wrote: Sat Jul 11, 2020 8:01 pm
protagonist wrote: Sat Jul 11, 2020 5:14 pm ...
I just finished the next chapter on Prospect Theory.

It left me with a few questions:
1. If people are disproportionately loss-averse, how does that explain the immense popularity of casinos, where people go knowing their chances of losing are greater than their chances of winning, and very few people return with a windfall? I get the lottery, where people stand an overwhelming chance of losing what they consider trivial for a long shot on winning a windfall. But it doesn't explain casinos, horse racing, etc., where the house holds a slim margin. Maybe he addresses that in an upcoming chapter. ...
A Boglehead simple question: Can't someone be loss averse and still gamble for fun, or be loss averse and an addicted gambler (the addiction overriding all else)?

Also, what did you think of the previous section on "expert intuition"?
I would leave "addicted gamblers" out of the equation because their behavior is acknowledged as pathologic. Most people who frequent casinos, horse tracks, etc. are not addicts. Maybe the "fun" outweighs the "loss aversion", but if people were truly "loss averse"...with more negative feelings associated with loss than positive feelings associated with winning....would they be having fun at casinos? ...
Although I haven't gone to a casino in some years now, I had fun when I did and I'm loss averse and probably a typical case of it,e.g., a diehard passive investor, a frugal spender, etc. Surely there's plenty of room in the brain for opposing forces such as loss aversion in some aspects of life overridden in others by, say, addiction. How that can happen is the subject of much research so nothing new here.

What I liked about "expert intuition" is Kahneman's emphasis on extensive experience and ability before "expert" can kick in and intuition is more likely to be accurate.
When I hear "expert" physicists at CERN state that they found the Higgs boson with a confidence level of 5 SD, I believe them and feel confident that, if the consensus of the particle physics community is convinced that they did, they probably really did.

When I read something in my field (medicine), like an article stating that a new imaging protocol has a quoted a particularly high accuracy rate and has been shown to outperform a more traditional approach with a sigma of, say, 0.024 , the first thing I think is...hmm...the stats they used require choosing a CI a priori,nobody chooses 0.024 (commonly they would choose 0.05 or 0.01), so I am already a little suspicious, and knowing my field after reading journals since the 1970s (as well as the issues surrounding traditional vs. Bayesian statistical methods), I think , "hmm....this is an interesting approach....maybe I will check it out further, or try it if there is no harm in doing so". But I know the nature and flaws of medical research and so I , at least initially , often have doubts.

When I read a social science or psychology experiment, I find the methodology is often a creative but completely artificial metaphor for a complex real life situation, the number of subjects is usually too small, and I question the randomness of the sample (having been an experimental psych. grad. student back in the 1970s). Though I read with interest, especially if the conclusions seem counter-intuitive (like Kahneman's " Florida effect"), I tend to discount what I read from experts most of the time unless I fact-check and there is very convincing evidence to back up their claims. Too many confounding unknown variables affecting real life situations.

When I read a study in finance , typically there is no testable null hypothesis or potential for falsifiability, and what I read is some person's ideas backed up by retrospective "evidence" that magically fit their data and theory, or they discovered something that they believe worked in the past during some chosen time period, which is arguably irrelevant for an unknown future. I pretty much ignore it all, and I give no more credibility to the experts, who not only have no more of a crystal ball than the rest of us, but they often have entrenched interests, overconfidence and a professional culture steeped in bias that we do not.

Kahneman does a good job in pointing out flaws in "expert thinking" . He does state that it takes a long time for "expert" to kick in, but he also says (and I tend to believe this) that increasing expertise and respect and adulation is often tainted by increasing overconfidence which may cloud their judgement. I would humbly suggest that, at least from what I have read so far in TFAS, he falls prey to many of the flaws he identifies himself, and loses any vestige of skepticism regarding his own research or research that supports his ideas, though many of the issues seem transparent.
Last edited by protagonist on Sun Jul 12, 2020 4:54 pm, edited 3 times in total.
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Re: Thinking Fast and Slow

Post by protagonist »

You could also argue that investing in the stock market is intrinsically risky. Over the past century people have tended to "win" more often than "lose" in the market. And many people believe that past returns are predictive of future returns, and "expect" a certain positive return over the next x years.

But the potential for great loss is still very real, and for many people who have much of what they have accumulated in life invested, great loss (or for many, not-so-great loss) can be far more devastating than large gains in terms of impact on lifestyle.

So if people are intrinsically that much more loss-averse, why do they invest? Are stock investors a special breed? Perhaps they are not a random sample of the population. Or have they been convinced by "experts" (who often have their own financial interests in mind) that if they stay invested long enough they will certainly win, losing is not even a real possibility, and they drank the kool-aid?
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Re: Thinking Fast and Slow

Post by Fallible »

protagonist wrote: Sun Jul 12, 2020 4:19 pm ...
Kahneman does a good job in pointing out flaws in "expert thinking" . He does state that it takes a long time for "expert" to kick in, but he also says (and I tend to believe this) that increasing expertise and respect and adulation is often tainted by increasing overconfidence which may cloud their judgement. I would humbly suggest that, at least from what I have read so far in TFAS, he falls prey to many of the flaws he identifies himself, and loses any vestige of skepticism regarding his own research or research that supports his ideas, though many of the issues seem transparent.
The “Overconfidence” section on “Expert Intuition: When Can We Trust It?” seems to me one most exemplary of Kahneman’s deep skepticism that leads to question after question after question about almost everything, including his own thoughts or tentative conclusions. In this section, it may be more obvious because it’s based largely on “adversarial collaboration” with Gary Klein, so we get opposing viewpoints throughout, which is always good (sort of like this thread?). What I most admire in Kahneman is his questioning based on that natural skepticism. It won't always take him to the right conclusions, or even any conclusions, and he's been ready to acknowledge this. But the process to conclude correctly is there.
"Yes, investing is simple. But it is not easy, for it requires discipline, patience, steadfastness, and that most uncommon of all gifts, common sense." ~Jack Bogle
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Re: Thinking Fast and Slow

Post by Fallible »

protagonist wrote: Sun Jul 12, 2020 4:42 pm You could also argue that investing in the stock market is intrinsically risky. Over the past century people have tended to "win" more often than "lose" in the market. And many people believe that past returns are predictive of future returns, and "expect" a certain positive return over the next x years.

But the potential for great loss is still very real, and for many people who have much of what they have accumulated in life invested, great loss (or for many, not-so-great loss) can be far more devastating than large gains in terms of impact on lifestyle.

So if people are intrinsically that much more loss-averse, why do they invest? Are stock investors a special breed? Perhaps they are not a random sample of the population. Or have they been convinced by "experts" (who often have their own financial interests in mind) that if they stay invested long enough they will certainly win, losing is not even a real possibility, and they drank the kool-aid?
I think this is about individual differences in how people handle risk, including brain structure, genetics, nature vs. nurture. Again, I’m loss averse so I could either have stayed out of the market or found a way to deal with the aversion. I found a way from Jack Bogle. Unfortunately, some investors don’t find that way. Whatever, being loss averse doesn’t automatically rule out taking risks in investing or life. In fact, the Bogleheads' philosophy is about guiding the loss averse through the many risks.
"Yes, investing is simple. But it is not easy, for it requires discipline, patience, steadfastness, and that most uncommon of all gifts, common sense." ~Jack Bogle
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Re: Thinking Fast and Slow

Post by protagonist »

Fallible wrote: Sun Jul 12, 2020 7:32 pm
protagonist wrote: Sun Jul 12, 2020 4:42 pm You could also argue that investing in the stock market is intrinsically risky. Over the past century people have tended to "win" more often than "lose" in the market. And many people believe that past returns are predictive of future returns, and "expect" a certain positive return over the next x years.

But the potential for great loss is still very real, and for many people who have much of what they have accumulated in life invested, great loss (or for many, not-so-great loss) can be far more devastating than large gains in terms of impact on lifestyle.

So if people are intrinsically that much more loss-averse, why do they invest? Are stock investors a special breed? Perhaps they are not a random sample of the population. Or have they been convinced by "experts" (who often have their own financial interests in mind) that if they stay invested long enough they will certainly win, losing is not even a real possibility, and they drank the kool-aid?
I think this is about individual differences in how people handle risk, including brain structure, genetics, nature vs. nurture. Again, I’m loss averse so I could either have stayed out of the market or found a way to deal with the aversion. I found a way from Jack Bogle. Unfortunately, some investors don’t find that way. Whatever, being loss averse doesn’t automatically rule out taking risks in investing or life. In fact, the Bogleheads' philosophy is about guiding the loss averse through the many risks.
You make good points here, Fallie.

From what I have read so far, Kahneman's arguments are not nearly as nuanced as yours.

That is a major problem I have with both his reasoning and that of many others involved in psych. research (as I was for 2 years in the 1970s). Humans are far too complex to come to broad, sweeping conclusions of how they think or behave based on a creative but very artificially constructed experiment conducted on a handful of undergraduates. A 19 year old with $500 in the bank that he got from his parents is likely to have much different reactions related to $100 gambles than a 40 year old with $250K, a family and a solid career, or a retiree who barely has enough to survive, or a multimillionaire. As you point out clearly above, it is nearly impossible to control for the countless unperceived variables.

One other thing....not a criticism of his work but something that is really starting to bug me....is that I lost count of how many times in his book so far he has reminded the reader of the fact that he won a Nobel prize. I can't recall reading another book by an author with such conceit.
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Re: Thinking Fast and Slow

Post by stoptothink »

protagonist wrote: Mon Jul 13, 2020 9:27 am
That is a major problem I have with both his reasoning and that of many others involved in psych. research (as I was for 2 years in the 1970s). Humans are far too complex to come to broad, sweeping conclusions of how they think or behave based on a creative but very artificially constructed experiment conducted on a handful of undergraduates.
We run into the same exact problems in my area of research (health, obesity, exercise physiology). Humans are so distinct biologically, that making hard and fast generalizations always turns out to be a mistake.
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Re: Thinking Fast and Slow

Post by VictoriaF »

stoptothink wrote: Mon Jul 13, 2020 9:42 am
protagonist wrote: Mon Jul 13, 2020 9:27 am
That is a major problem I have with both his reasoning and that of many others involved in psych. research (as I was for 2 years in the 1970s). Humans are far too complex to come to broad, sweeping conclusions of how they think or behave based on a creative but very artificially constructed experiment conducted on a handful of undergraduates.
We run into the same exact problems in my area of research (health, obesity, exercise physiology). Humans are so distinct biologically, that making hard and fast generalizations always turns out to be a mistake.
In your area, a meta-problem is that it's much easier for a professional to say "don't eat fat" or "don't eat sugar" than to say "there are no universal answers." In the heuristics-and-biases terms, you'd lose the halo effect. Other problems are the availability heuristic of reading about the Blue Zones and confusing good stories with a scientific findings; and the silent evidence of not seeing what did not work in the Blue Zones and other stories.

Note that my comments above refer to the people who want to do right things and are diligent about self-care they believe in. Of course, there are many other people who eat junk food, smoke, drink too much alcohol, etc. These people have other biases and need other approaches.

Victoria

P.S. Check out a book "Tiny Habits" by BJ Fogg. It offers some good ideas for developing habits, and specifically health-related habits.
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Re: Thinking Fast and Slow

Post by Fallible »

protagonist wrote: Mon Jul 13, 2020 9:27 am
Fallible wrote: Sun Jul 12, 2020 7:32 pm
protagonist wrote: Sun Jul 12, 2020 4:42 pm You could also argue that investing in the stock market is intrinsically risky. Over the past century people have tended to "win" more often than "lose" in the market. And many people believe that past returns are predictive of future returns, and "expect" a certain positive return over the next x years.

But the potential for great loss is still very real, and for many people who have much of what they have accumulated in life invested, great loss (or for many, not-so-great loss) can be far more devastating than large gains in terms of impact on lifestyle.

So if people are intrinsically that much more loss-averse, why do they invest? Are stock investors a special breed? Perhaps they are not a random sample of the population. Or have they been convinced by "experts" (who often have their own financial interests in mind) that if they stay invested long enough they will certainly win, losing is not even a real possibility, and they drank the kool-aid?
I think this is about individual differences in how people handle risk, including brain structure, genetics, nature vs. nurture. Again, I’m loss averse so I could either have stayed out of the market or found a way to deal with the aversion. I found a way from Jack Bogle. Unfortunately, some investors don’t find that way. Whatever, being loss averse doesn’t automatically rule out taking risks in investing or life. In fact, the Bogleheads' philosophy is about guiding the loss averse through the many risks.
You make good points here, Fallie.

From what I have read so far, Kahneman's arguments are not nearly as nuanced as yours.

That is a major problem I have with both his reasoning and that of many others involved in psych. research (as I was for 2 years in the 1970s). Humans are far too complex to come to broad, sweeping conclusions of how they think or behave based on a creative but very artificially constructed experiment conducted on a handful of undergraduates. A 19 year old with $500 in the bank that he got from his parents is likely to have much different reactions related to $100 gambles than a 40 year old with $250K, a family and a solid career, or a retiree who barely has enough to survive, or a multimillionaire. As you point out clearly above, it is nearly impossible to control for the countless unperceived variables.

One other thing....not a criticism of his work but something that is really starting to bug me....is that I lost count of how many times in his book so far he has reminded the reader of the fact that he won a Nobel prize. I can't recall reading another book by an author with such conceit.
Actually, my comment about individual differences referred to your asking why investors who are loss averse would take on risky investing. As for social experiments with college students, I don't know exactly what impact they have or if it always precludes meaningful results, but I've often questioned them because I doubted I would react the way the students did (but might have when I was a student). Many psychologists themselves question the use of students and there's much written about that.

So, is Daniel Kahneman conceited about his Nobel and does he mention it too often in his book? I didn't notice this when I read it, but I'm skeptical (that word again :-) ) and have questions: how often are the mentions and how are they stated, such as the context? A reason for my skepticism is that he has often and understandably seemed painfully aware that the award would have been shared with Tversky, who died in '96, and he has gone to great lengths to credit the other half of Prospect Theory.
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Re: Thinking Fast and Slow

Post by protagonist »

Fallible wrote: Mon Jul 13, 2020 5:21 pm
Actually, my comment about individual differences referred to your asking why investors who are loss averse would take on risky investing.
Yes, I understood that, and I thought you made a good point.
As for social experiments with college students, I don't know exactly what impact they have or if it always precludes meaningful results, but I've often questioned them because I doubted I would react the way the students did (but might have when I was a student). Many psychologists themselves question the use of students and there's much written about that.
I don't think it is ALWAYS a problem, but sometimes it is, and in the case that I quoted above I thought the problem was huge (but I guess Kahneman didn't because he quoted the results and their implications, expressing no doubts at all.)
So, is Daniel Kahneman conceited about his Nobel and does he mention it too often in his book? I didn't notice this when I read it, but I'm skeptical (that word again :-) ) and have questions: how often are the mentions and how are they stated, such as the context?
I didn't count, but enough times that I took notice and it rubbed me the wrong way, so too often for me. I don't recall reading anything by other laureates or winners of other great awards that gave me the same impression. I can't say that he is conceited (I don't know him). I can only speak of the impression it leaves me with.

I searched the word "Nobel" on my e-reader and it came up in the body of the book at least 8 times, and 4 more in his notes. To be fair, those references were not all referring to him...some were referring to colleagues. But at least four of them in the body of the book did refer to him (I didn't take the time to check them further). Even once is, in my humble opinion, too much.
A reason for my skepticism is that he has often and understandably seemed painfully aware that the award would have been shared with Tversky, who died in '96, and he has gone to great lengths to credit the other half of Prospect Theory.
Yes, he seems to have a lot of respect and affection for his friend. That is, in my opinion, something else entirely. But I'd rather get away from discussing his personal traits, which are of little interest to me and of which I cannot be a fair judge since I don't know him personally....what matters to me is his science.
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Re: Thinking Fast and Slow

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protagonist wrote: Mon Jul 13, 2020 8:35 pm ...
So, is Daniel Kahneman conceited about his Nobel and does he mention it too often in his book? I didn't notice this when I read it, but I'm skeptical (that word again :-) ) and have questions: how often are the mentions and how are they stated, such as the context?
I didn't count, but enough times that I took notice and it rubbed me the wrong way, so too often for me. I don't recall reading anything by other laureates or winners of other great awards that gave me the same impression. I can't say that he is conceited (I don't know him). I can only speak of the impression it leaves me with.

I searched the word "Nobel" on my e-reader and it came up in the body of the book at least 8 times, and 4 more in his notes. To be fair, those references were not all referring to him...some were referring to colleagues. But at least four of them in the body of the book did refer to him (I didn't take the time to check them further). Even once is, in my humble opinion, too much.
A reason for my skepticism is that he has often and understandably seemed painfully aware that the award would have been shared with Tversky, who died in '96, and he has gone to great lengths to credit the other half of Prospect Theory.
Yes, he seems to have a lot of respect and affection for his friend. That is, in my opinion, something else entirely. But I'd rather get away from discussing his personal traits, which are of little interest to me and of which I cannot be a fair judge since I don't know him personally....what matters to me is his science.
Yes, some of it would be personal, but most of it would be professional. I think anyone winning such a major award as the Nobel would certainly want, out of simple fairness and maybe even a tinge of guilt, to credit as much as possible the person responsible for half, and possibly more, of that award.

Looking back now on our exchanges overall, I think we agree on the, um, fallibility of psychology's social experiments with college students, and it's always nice to agree. :happy
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Re: Thinking Fast and Slow

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Fallible wrote: Tue Jul 14, 2020 1:05 pm

Looking back now on our exchanges overall, I think we agree on the, um, fallibility of psychology's social experiments with college students, and it's always nice to agree. :happy
I think we have agreed on most things over the years, Fallie. *smile*

To be clear, I have no problem with many of Kahneman's ideas. I think he has done a great job pointing out the many ways that our thought processes are subject to unintentional biases and our ability to make sound and rational decisions and perceptions is tainted by various subtle processes of which we should be aware. He also points out (and sadly, I think he is probably right) that even if we are aware of the pitfalls it probably will not substantially change our behavior in the long run. But, in my humble opinion, awareness is at least a good first step.

My issues with the book are not with many of his ideas, just my impression of the quality of his research (and that of others that he quotes) and his tacit acceptance of seemingly any data that could be construed to support his ideas, as well as what sometimes appears to me to be a weak grasp of basic statistics. Some of the ideas as well are pretty loony (putting a pencil in one's mouth forces a smile which makes one happier and more susceptible to System 1 thinking, for example. Really????). But many of them make a lot of sense, and I don't advocate throwing the baby out with the proverbial bath water. There is a lot that may be very helpful to many people in making sense of their world.

As for mentioning his Nobel a bunch of times, that is just a pet peeve that turns me off to the book. Maybe it is just me.

Plus, as you know from years of posting on Bogleheads, I am a die-hard skeptic.
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Re: Thinking Fast and Slow

Post by pezblanco »

protagonist wrote: Fri Jul 10, 2020 1:10 pm
(btw, this is the same Bernoulli who came up with the Bernoulli principle, which governs the amount of lift on the wing of an aircraft (or sail on a boat), and the Bernoulli distribution in mathematics, and he did it all in the early 18th century, so he was one SMART dude. Disregarding opinions about his actual proposed weightings of subjective gain based on initial wealth as outlined in Kahneman's book, I would suggest that he was not "in error". His thinking would be consistent with expected utility, though I don't know how the original expected utility theory was worded so it may contradict the theory if it weights every dollar as having the same utility).

Any other thoughts about this?
No, they were different Bernoulli's ... Daniel and Jakob (uncle and nephew I think).
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Re: Thinking Fast and Slow

Post by pezblanco »

protagonist wrote: Mon Jul 13, 2020 9:27 am
One other thing....not a criticism of his work but something that is really starting to bug me....is that I lost count of how many times in his book so far he has reminded the reader of the fact that he won a Nobel prize. I can't recall reading another book by an author with such conceit.
You've never read anything by Taleb? :D
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Re: Thinking Fast and Slow

Post by protagonist »

pezblanco wrote: Tue Jul 14, 2020 5:39 pm
protagonist wrote: Fri Jul 10, 2020 1:10 pm
(btw, this is the same Bernoulli who came up with the Bernoulli principle, which governs the amount of lift on the wing of an aircraft (or sail on a boat), and the Bernoulli distribution in mathematics, and he did it all in the early 18th century, so he was one SMART dude. Disregarding opinions about his actual proposed weightings of subjective gain based on initial wealth as outlined in Kahneman's book, I would suggest that he was not "in error". His thinking would be consistent with expected utility, though I don't know how the original expected utility theory was worded so it may contradict the theory if it weights every dollar as having the same utility).

Any other thoughts about this?
No, they were different Bernoulli's ... Daniel and Jakob (uncle and nephew I think).
Thanks, whitefish. They are both still smart dudes.
Last edited by protagonist on Tue Jul 14, 2020 7:44 pm, edited 1 time in total.
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Re: Thinking Fast and Slow

Post by protagonist »

pezblanco wrote: Tue Jul 14, 2020 5:41 pm
protagonist wrote: Mon Jul 13, 2020 9:27 am
One other thing....not a criticism of his work but something that is really starting to bug me....is that I lost count of how many times in his book so far he has reminded the reader of the fact that he won a Nobel prize. I can't recall reading another book by an author with such conceit.
You've never read anything by Taleb? :D
*laughing* I've heard others criticize him for that sort of thing, which is one reason I haven't.

Another reason is that I've read a lot of people's summaries of his work on Bogleheads, and from that I surmised that the best part of his work is more or less just a popularization of chaos/complexity theory, of which I am already quite familiar. People here also criticize him for his writing style and redundancy, so I'm not too motivated to read his stuff. I have too much other stuff that I want to read.
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Re: Thinking Fast and Slow

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Chapter 30: Rare Events>

In this chapter , in my opinion he made an excellent point, and in another case, probably misinterpreted data supporting his theory (or at least was blind to other obvious possibilities).

The excellent point (and very actionable): How probability is worded has a large impact on subjective response, and is manipulated to have the desired effect. Definite numbers have more impact than probabilities.

Example: You are likely to be much more fearful of Islamic terrorism if you hear that "23 Americans have died on US soil since 9/11 from radical Islamic terrorist attacks" (a figure quoted in Wikipedia), than if you hear that "since 9/11, the chance of being killed in the US by an Islamic terrorist attack since 9/11 was 0.000007%" (even though the statements are identical).
Likewise, if you hear "Since 9/11 you were more than twice as likely to get murdered by domestic right-wing extremist terrorist groups than by Islamic terrorist groups", that would make you much more afraid of right-wing terrorists than if you hear the identical "Your chance of having been killed in a domestic right wing terrorist attack since 9/11 was only 0.000019%" (also true acc. to Wikipedia).

The misinterpreted data:
Given the choice between a 50% chance of winning $5 or a 5% chance of winning $50, which would you choose?
It is immediately apparent to me that the calculated financial value of each proposition is the same ($2.50).
That said, I would definitely choose the 5% chance of winning $50.

Kahneman says that is because people overweight low probabilities (5% is viewed as "more probable" than 5%, whereas 50% is viewed realistically ).

The common sense conclusion to me is that $5 is virtually meaningless to me, whereas if I am lucky enough to win $50, I can buy something I really want with it. And either way I have nothing to lose.

Kahneman does not even mention that as a POSSIBLE alternate way to explain the result!!!!

Consider the more extreme example....which gamble would you prefer?
1. A 99.999999% chance of winning a penny? or
2. A 50-50 chance of winning a penny? or
3. A 0.000000001% chance of winning $1,000,000? (analogous perhaps to a lottery or sweepstakes).

Clearly I'd think that most people would (and do) choose #3 over #1 or #2 even though the calculated "value" of the first two gambles are much greater than the third, because they view a penny as virtually worthless whereas $1M makes them rich. Nobody bothers gambling to win a penny (unless just in fun).

No need to postulate some convoluted theory of probability weightings to explain it.

Correct but predictable results...faulty conclusion...bad science.
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Re: Thinking Fast and Slow

Post by protagonist »

I finished the book. I doubt if I would have if it were not for the pandemic, but I am happy I did.

The later chapters were, IMHO, much better than the earlier ones, as suggested by fallible.

For the most part, I thought he had very interesting things to say about tendencies to overweight rare events, approach towards risk (particularly the idea of viewing each of life's "gambles" as one in a sea of many rather than evaluating them in isolation), distorted perspectives on risk, experience vs. memory and especially the part about evaluating "happiness" and what really makes one happy.

Some of the later stuff still bothered me....especially his seeming near-worship of the idea of "libertarian paternalism" in the conclusions chapter, where, as with other concepts that he seems to accept blindly, he presented only situations where it works and totally ignored any conflicting ones. He mentioned how politicians on both the right and left believe it works but only gave a couple of examples where it actually did, none where it didn't or where it was rejected. (Clearly no one "ism" fits all). He used an example of how not wearing a motorcycle helmet only puts the non-wearer at risk but ignored that when somebody without a helmet (or seat belt) gets into an accident we all pay for it with our taxes and insurance premiums. He also ignored the fact that whenever one speaks of "paternalism" one has to question the choice of and the wisdom of the "fathers". It is that kind of one-sided writing that I find so annoying and misleading and potentially dangerous.

That said, I can't say I didn't learn anything from reading the book..many of his ideas seemed sound and were definitely food for thought, though I found a lot of his research questionable (as, apparently, did many others based on fact-checking).

The book on a whole was a mixed bag of good ideas and flaws. If Kahneman didn't seem to invoke (and imho encourage) the kind of worship that it appears to me he does in some circles, and particularly if I was less of a critic of flawed science, I might have liked it more.
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Re: Thinking Fast and Slow

Post by gavinman »

bluegill wrote: Fri Jul 03, 2020 6:11 am I read about 10 pages. It is an extremely boring book. Maybe the author should have condensed this book to about 40 pages.
According to Amazon it’s one the most bought but unread books on Kindle. It has a high percentage of people that do not finish the whole book. It’s amazing everything Amazon tracks. I bought the book but haven’t read it yet, I bought it because I read it was required reading for CIA agents in training.
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Re: Thinking Fast and Slow

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protagonist wrote: Mon Jul 27, 2020 7:38 pm I finished the book. I doubt if I would have if it were not for the pandemic, but I am happy I did. ...
The book on a whole was a mixed bag of good ideas and flaws. If Kahneman didn't seem to invoke (and imho encourage) the kind of worship that it appears to me he does in some circles, and particularly if I was less of a critic of flawed science, I might have liked it more.
I think any author would consider their work successful if it captured the attention, time, and analysis you brought to this book, pandemic or no. And I think competent, conscientious authors know their work will have flaws despite their skills backed by much professional editing and fact-checking and by colleague reviews.

I liked the book for making me more aware of why humans are both rational and irrational, or at least why Kahneman (and Tversky, and others) thought so. I was disappointed in that it seemed to end there, with awareness of our biases the best we can do, rather than awareness itself being a major step toward mitigating them. He says as much: "The way to block errors that originate in System 1 is simple in principle: recognize the signs that you are in a cognitive minefield, slow down, and ask for reinforcement from System 2." Well, isn't slowing down and seeking reinforcement the result of awareness? It's not easy, he emphasizes, but who would expect tackling even one bias to be easy?

Protag, it'll be a long pandemic, so what's your next book? :-)
"Yes, investing is simple. But it is not easy, for it requires discipline, patience, steadfastness, and that most uncommon of all gifts, common sense." ~Jack Bogle
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Re: Thinking Fast and Slow

Post by protagonist »

Fallible wrote: Mon Aug 03, 2020 6:19 pm
protagonist wrote: Mon Jul 27, 2020 7:38 pm I finished the book. I doubt if I would have if it were not for the pandemic, but I am happy I did. ...
The book on a whole was a mixed bag of good ideas and flaws. If Kahneman didn't seem to invoke (and imho encourage) the kind of worship that it appears to me he does in some circles, and particularly if I was less of a critic of flawed science, I might have liked it more.
I think any author would consider their work successful if it captured the attention, time, and analysis you brought to this book, pandemic or no. And I think competent, conscientious authors know their work will have flaws despite their skills backed by much professional editing and fact-checking and by colleague reviews.

I liked the book for making me more aware of why humans are both rational and irrational, or at least why Kahneman (and Tversky, and others) thought so. I was disappointed in that it seemed to end there, with awareness of our biases the best we can do, rather than awareness itself being a major step toward mitigating them. He says as much: "The way to block errors that originate in System 1 is simple in principle: recognize the signs that you are in a cognitive minefield, slow down, and ask for reinforcement from System 2." Well, isn't slowing down and seeking reinforcement the result of awareness? It's not easy, he emphasizes, but who would expect tackling even one bias to be easy?

Protag, it'll be a long pandemic, so what's your next book? :-)
I agree with you, fallie. As with most aspects of human behavior I think , awareness is the first step towards progress.
The reason I analyzed, or over-analyzed (whatever) parts of this book has to do with two things:
1. COVID-19.
2. The fact that it got its own thread here, and that I have been hearing people on this site talking (well, writing really) about it so much since it was published. It gets so much attention in these circles.

Next book? Beats me. I sort of read in spurts. Right now there is nothing that jumps out and screams "read me, please!!" to me. Maybe something a bit more amusing. Along the lines of Vonnegut or Wolfe or Toole or Robbins. Or whatev. But I have to get inspired first. If you have any ideas, I'm all ears (well, eyes really). Just don't shoot the messenger if I don't get around to it.

Anyway, I hope you are well....
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Re: Thinking Fast and Slow

Post by Fallible »

protagonist wrote: Mon Aug 03, 2020 8:52 pm
Fallible wrote: Mon Aug 03, 2020 6:19 pm
protagonist wrote: Mon Jul 27, 2020 7:38 pm I finished the book. I doubt if I would have if it were not for the pandemic, but I am happy I did. ...
The book on a whole was a mixed bag of good ideas and flaws. If Kahneman didn't seem to invoke (and imho encourage) the kind of worship that it appears to me he does in some circles, and particularly if I was less of a critic of flawed science, I might have liked it more.
I think any author would consider their work successful if it captured the attention, time, and analysis you brought to this book, pandemic or no. And I think competent, conscientious authors know their work will have flaws despite their skills backed by much professional editing and fact-checking and by colleague reviews.

I liked the book for making me more aware of why humans are both rational and irrational, or at least why Kahneman (and Tversky, and others) thought so. I was disappointed in that it seemed to end there, with awareness of our biases the best we can do, rather than awareness itself being a major step toward mitigating them. He says as much: "The way to block errors that originate in System 1 is simple in principle: recognize the signs that you are in a cognitive minefield, slow down, and ask for reinforcement from System 2." Well, isn't slowing down and seeking reinforcement the result of awareness? It's not easy, he emphasizes, but who would expect tackling even one bias to be easy?

Protag, it'll be a long pandemic, so what's your next book? :-)
I agree with you, fallie. As with most aspects of human behavior I think , awareness is the first step towards progress.
The reason I analyzed, or over-analyzed (whatever) parts of this book has to do with two things:
1. COVID-19.
2. The fact that it got its own thread here, and that I have been hearing people on this site talking (well, writing really) about it so much since it was published. It gets so much attention in these circles.

Next book? Beats me. I sort of read in spurts. Right now there is nothing that jumps out and screams "read me, please!!" to me. Maybe something a bit more amusing. Along the lines of Vonnegut or Wolfe or Toole or Robbins. Or whatev. But I have to get inspired first. If you have any ideas, I'm all ears (well, eyes really). Just don't shoot the messenger if I don't get around to it.

Anyway, I hope you are well....
Don't have a book for you, but you might be interested in what Bill Bernstein wrote about a landmark paper by Kahneman/Tversky outlining errors humans make in estimating probabilities. Bill called it a "classic," but also said it was "couched in an increasingly complex series of mind-twisting examples." Sound familiar? I think if someone with Bill Bernstein's extraordinary intellect finds something mind-twisting, it really IS mind-twisting.
"Yes, investing is simple. But it is not easy, for it requires discipline, patience, steadfastness, and that most uncommon of all gifts, common sense." ~Jack Bogle
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Re: Thinking Fast and Slow

Post by protagonist »

Fallible wrote: Fri Aug 07, 2020 5:58 pm
protagonist wrote: Mon Aug 03, 2020 8:52 pm
Fallible wrote: Mon Aug 03, 2020 6:19 pm
protagonist wrote: Mon Jul 27, 2020 7:38 pm I finished the book. I doubt if I would have if it were not for the pandemic, but I am happy I did. ...
The book on a whole was a mixed bag of good ideas and flaws. If Kahneman didn't seem to invoke (and imho encourage) the kind of worship that it appears to me he does in some circles, and particularly if I was less of a critic of flawed science, I might have liked it more.
I think any author would consider their work successful if it captured the attention, time, and analysis you brought to this book, pandemic or no. And I think competent, conscientious authors know their work will have flaws despite their skills backed by much professional editing and fact-checking and by colleague reviews.

I liked the book for making me more aware of why humans are both rational and irrational, or at least why Kahneman (and Tversky, and others) thought so. I was disappointed in that it seemed to end there, with awareness of our biases the best we can do, rather than awareness itself being a major step toward mitigating them. He says as much: "The way to block errors that originate in System 1 is simple in principle: recognize the signs that you are in a cognitive minefield, slow down, and ask for reinforcement from System 2." Well, isn't slowing down and seeking reinforcement the result of awareness? It's not easy, he emphasizes, but who would expect tackling even one bias to be easy?

Protag, it'll be a long pandemic, so what's your next book? :-)
I agree with you, fallie. As with most aspects of human behavior I think , awareness is the first step towards progress.
The reason I analyzed, or over-analyzed (whatever) parts of this book has to do with two things:
1. COVID-19.
2. The fact that it got its own thread here, and that I have been hearing people on this site talking (well, writing really) about it so much since it was published. It gets so much attention in these circles.

Next book? Beats me. I sort of read in spurts. Right now there is nothing that jumps out and screams "read me, please!!" to me. Maybe something a bit more amusing. Along the lines of Vonnegut or Wolfe or Toole or Robbins. Or whatev. But I have to get inspired first. If you have any ideas, I'm all ears (well, eyes really). Just don't shoot the messenger if I don't get around to it.

Anyway, I hope you are well....
Don't have a book for you, but you might be interested in what Bill Bernstein wrote about a landmark paper by Kahneman/Tversky outlining errors humans make in estimating probabilities. Bill called it a "classic," but also said it was "couched in an increasingly complex series of mind-twisting examples." Sound familiar? I think if someone with Bill Bernstein's extraordinary intellect finds something mind-twisting, it really IS mind-twisting.
+1

I'm reading I am Charlotte Simmons by Tom Wolfe, because somebody lent it to me (a bird in the hand...) I haven't read much of it yet, but so far I am not getting into it as much as some of his earlier works.
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Re: Thinking Fast and Slow

Post by Fallible »

A new thread on Kahneman and Tversky's loss aversion takes up replication also discussed here:

viewtopic.php?f=10&t=322611&p=5427085#p5427085
"Yes, investing is simple. But it is not easy, for it requires discipline, patience, steadfastness, and that most uncommon of all gifts, common sense." ~Jack Bogle
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