How two game-changing psychologists changed the way we think about thinking
Israeli psychologists Daniel Kahneman and Amos Tversky had big ideas about why the brain makes the decisions it does.
"They showed over and again the various mistakes people make when they are making judgments — when they try to judge the odds," bestselling author Michael Lewis tells The Current's guest host Nora Young.
Lewis' new book, The Undoing Project: A Friendship that Changed our Minds, chronicles the relationship between the two geniuses and their game-changing research.
"Much of economic theory is premised on the idea that people are rational and pick the right things for themselves and judge odds accurately," says Lewis.
"Danny and Amos showed that people made systematic errors, and if they made systematic errors, then markets can be systematically wrong."
Both Khaneman and Tversky served in the Israeli military, where decision making was a matter of life and death.
Our intuitive judgement is fallible and we would be advised to pay attention in the way it is fallible.- Michael Lewis
The two met in the late 1960s and would form a strong friendship that Lewis would describe as a "love story."
Young asked Lewis what Khaneman and Tversky would make of the election of the Donald Trump
"If you want to summarize what they had to say in a sentence — it's that our intuitive judgement is fallible and we would be well-advised to pay attention in the way it is fallible," Lewis answers.
"Here we have a president who is in love with his own intuitive judgement and has no sense of his own fallibility," Lewis tells Young.
"He is a prime candidate to make the kinds of mistakes they identify. I think that is the first thing they would say."
When Khaneman won the Nobel Prize for Economics in 2002 his co-researcher, Amos Tversky, was not there. He died from cancer in 1996.
Listen to the full conversation at the top of this web post.
This segment was produced by The Current's Howard Goldenthal.