Nobel Prize winner discusses judgment and intuition

“Most of the time,” said noted psychologist and Nobel laureate Daniel Kahneman to a packed house of students, scholars, and faculty at the Yenching Auditorium (April 15), “we run at very low effort.”

It was a sobering claim for the heady academic set, but according to Kahneman, no one is immune from the diagnosis. Even those with a high level of intelligence, he said, “don’t check themselves as much as they should.”

The researcher was referring to the human tendency to judge things quickly, to go with the familiar or what looks correct instead of giving a question or a problem sufficient attention, reflection, and thought.

The notion was part of a discussion by the psychology professor from Princeton University who for years has studied how humans think, and in particular the psychology of intuitive beliefs.

Kahneman received the 2002 Nobel Prize in economics for his work on the “prospect theory,” which he developed with his colleague and longtime collaborator Amos Tversky in 1979. The theory describes a person’s decision-making process when an element of risk is involved — one in which the person assesses perceived gains against perceived losses and more often than not makes a judgment based on the former rather than the latter.

He outlined some of his findings at a lecture titled “Judgment and Intuition.” The talk was part of the 2008 Distinguished Lecture Series sponsored by Harvard’s Mind/Brain/Behavior (MBB) Interfaculty Initiative (MBB). Kahneman’s other talks in the series included a discussion on “Decision-Making and Rationality,” and “The Evolving Notions of Well-Being.”

Marc Hauser, professor of psychology and MBB co-director, introduced the talk, noting that Kahneman’s work reveals “the impulse of our decision-making apparatus” and how one is often “seduced by peripheral issues, getting sidetracked by seeing a tree when we should be seeing the proverbial forest.”

During their work, Kahneman said, he and Tversky never considered attacking the notion of rationality, but instead focused their efforts on single types of questions that could be studied closely and answered with solid evidence.

“We knew we were attacking a very important model,” he said of the concept of humans as rational beings. But, he added, “If we couched our work as demanding that people aren’t rational, we would have had to define what rational was. We would never have gotten out of that one,” he laughed.

Instead, he said, they simply offered concrete examples of what types of judgments are made under uncertainty and allowed the readers of their work to make their own assumptions and arguments about rationality.

During his talk, Kahneman explained the idea of two distinct systems of thinking, a concept that informs a significant portion of his work. He said the first cognitive system relies on perception, intuition, and emotion and is often governed by habit. The second system is a guided, controlled approach, one that is effortful and involves reasoning.

Much of his research, Kahneman said, supports the notion that decision making, even by the “intelligent set,” is often dictated by the first system. People frequently make choices, he noted, based on intuition and emotion, arriving at their conclusions quickly and with little or no reflection.

He provided several examples to support his claims, including a number of tricky visual illusions.

When shown an image of two identical lines, people often insist one line is shorter than the other, said the psychologist, simply because of the way it is presented on the page, when in fact they are the same length.

In another study, subjects were asked what could buy more paper clips, a Susan B. Anthony coin or a paper dollar bill. Despite being identical amounts of currency, the dominant response was the dollar bill simply because, Kahneman said, “it’s more familiar.”

He also offered the example of a basic math problem that asks the following: A bat and a ball cost $1.10 in total. The bat costs $1 more than the ball. How much does the ball cost?

According to Kahneman, the neat and quick and fast and incorrect answer that so many come up with is 10 cents. (The correct response is five cents.)

“System one determines an answer,” said the Nobel laureate, “and it’s immediate, and it’s wrong.”

The 2008 Distinguished Lecture Series continues with ‘The Evolving Notions of Well-Being’ (post-lecture commentary by Daniel Gilbert, professor of psychology) from 5 to 7 p.m. today (April 17) at the Yenching Auditorium, 2 Divinity Ave., Cambridge, Mass.