Saturday, April 6, 2024

My favourite quotes from Daniel Kahneman

One of my heroes, Daniel Kahneman, passed away last month at the age of 90. Ever since I heard his talk on YouTube on “Marvels and flaws of human intuition” sometime in 2009, I became his fan. I listened to the talk like how people listen to a music album again and again. A couple of years later, his book “Thinking, fast and slow” was published and soon he became a celebrity. I continued to listen to his interviews. I ended up using the biased-agent model rather than the rational-agent model in all my work related to innovation capacity & culture building, design thinking, and mindfulness. In this article, I would like to present four of my favourite quotes from Kahneman.

Rational agent model is a non-starter: I remember hearing this from Kahneman in multiple interviews over the past decade and it created a deep impression in my mind. He said in this interview last year (April 14, 2023): “Consistency of beliefs and preferences, which are the essence of rationality in that model — it's important to see what it implies. It's not the same thing as reasoning correctly, that is, of saying two things that are consistent with each other in the same conversation. It's that your beliefs, the whole system, your beliefs and preferences, taken one at a time, make up a consistent system. And that is psychologically a non-starter. That's simply because our beliefs and our preferences are so context-dependent and the context is highly specific and momentary, that this type of consistency is not conceivable.” So beautifully put.

Cognitive biases act like optical illusions: I mentioned this quote along with the cartoon below three years ago while presenting a working definition of mindfulness. In “Thinking, fast and slow” he says “Cognitive illusions can be more stubborn than visual illusions”. Kahneman is not suggesting that we don’t change our mind. He says, “To a good first approximation, people simply don't change their minds about anything that matters." And, he elaborates this with, “I think I'm actually known for changing my mind. This is one of the traits that all my collaborators complain about, because I keep changing my mind. But I keep changing my mind about small things. Then what I discovered actually, in part while preparing that talk on adversarial collaboration, there are things on which I just won't change my mind. Some of these I've believed since I was 17 or 18, so certainly are not going to change now.” We could be deeply attached to a religion, national identity, political ideologies, and even scientific theories. My guess is that Kahneman would have been deeply saddened by the way Israel-Gaza conflict has unfolded since the last October, demonstrating the stubbornness of cognitive illusions.

Focus on the process, not the outcome: We live in a world where successful outcome is worshipped. Individual net worth, startup valuations, election results, winning IPLs, competitive exam scores, your position, and possessions, etc. Schools teaching entrepreneurship have a vision of producing a certain number of unicorns. Kahneman knew that this lopsided emphasis on outcome is a mistake.  He said, “The key feature of decision-making under uncertainty is that there is no perfect correlation between the quality of decisions and quality of outcomes. You could make a good decision and fail and you could make a bad decision and succeed.” And he advises later in the talk, “Try to focus on the process, and not on the outcome”. For more on this, check out my blog “Rewarding innovation: process vs outcome”.

Human mind does not deal well with nonevents: I am sure I must have encountered nonevents before I read about them in “Thinking, fast and slow”. But since then, they have become a large part of my life. I see them all the time everywhere. After narrating Google’s success story, Kahneman says, “There is a very good story here. Fleshed out in more detail, the story could give you the sense that you understand what made Google succeed; it would also make you feel that you have learned a valuable general lesson about what makes businesses succeed. Unfortunately, there is good reason to believe that your sense of understanding and learning from the Google story is largely illusory. The ultimate test of an explanation is whether it would have made the event predictable in advance. No story of Google’s unlikely success will meet that test, because no story can include the myriad of events that would have caused a different outcome. The human mind does not deal well with nonevents.” Now, every moment events appear to be a tiny fraction of nonevents, most of them my mind is not even capable of fathoming. My mom’s fall from her bed in the old age home a couple of days ago was a lucky event because today she can walk to the dining hall on her own.

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