Saturday, June 23, 2012

Debunking the Myth of Intuition - Daniel Kahneman Interviewed in Spiegel

I thoroughly enjoyed Daniel Kahneman's most recent book, Thinking, Fast and Slow - in which he explains the two cognitive systems that shape the way we think: "System 1 is fast, intuitive, and emotional; System 2 is slower, more deliberative, and more logical." Great book, and this is an excellent interview in which you can get a taste of his ideas.


SPIEGEL Interview with Daniel Kahneman

Debunking the Myth of Intuition

Can doctors and investment advisers be trusted? And do we live more for experiences or memories? In a SPIEGEL interview, Nobel Prize-winning psychologist Daniel Kahneman discusses the innate weakness of human thought, deceptive memories and the misleading power of intuition.

SPIEGEL: Professor Kahneman, you've spent your entire professional life studying the snares in which human thought can become entrapped. For example, in your book, you describe how easy it is to increase a person's willingness to contribute money to the coffee fund.
 
Kahneman: You just have to make sure that the right picture is hanging above the cash box. If a pair of eyes is looking back at them from the wall, people will contribute twice as much as they do when the picture shows flowers. People who feel observed behave more morally.
 
SPIEGEL: And this also works if we don't even pay attention to the photo on the wall?
 
Kahneman: All the more if you don't notice it. The phenomenon is called "priming": We aren't aware that we have perceived a certain stimulus, but it can be proved that we still respond to it.
 
SPIEGEL: People in advertising will like that.
 
Kahneman: Of course, that's where priming is in widespread use. An attractive woman in an ad automatically directs your attention to the name of the product. When you encounter it in the shop later on, it will already seem familiar to you.
 
SPIEGEL: Isn't erotic association much more important?
 
Kahneman: Of course, there are other mechanisms of advertising that also act on the subconscious. But the main effect is simply that a name we see in a shop looks familiar -- because, when it looks familiar, it looks good. There is a very good evolutionary explanation for that: If I encounter something many times, and it hasn't eaten me yet, then I'm safe. Familiarity is a safety signal. That's why we like what we know.
 
SPIEGEL: Can these insights also be applied to politics?
 
Kahneman: Of course. For example, one can show that anything that reminds people of their mortality makes them more obedient.
 
SPIEGEL: Like the cross above the altar?
 
Kahneman: Yes, there is even a theory that deals with the fear of death; it's called "Terror Management Theory." You can influence people by just reminding them of something -- it can be death; it can be money. Any symbol that is associated with money, even if it's just dollar signs as a screensaver, ensures that people will pay more attention to their own interests than they will want to help others.
 
SPIEGEL: It seems that priming works primarily in favor of the political right.
 
Kahneman: It would work just as well the other way around. There's an experiment, for example, in which people were playing a game but, in the first group, it was called a "competition game" and, in the other group, it was called a "community game." And, in the latter case, people acted less selfish even though it's exactly the same game.
 
SPIEGEL: Is there no way to escape those powerful suggestions?
 
Kahneman: It isn't easy, at any rate. The problem is that we usually don't notice these influences.
 
SPIEGEL: That's pretty unsettling.
 
Kahneman: Well, it can't be too bad because we live with that all the time. That's just the way it is.
 
SPIEGEL: But we want to know what our decisions are based on!
 
Kahneman: I'm not even sure I want that, to be honest, because it would be too complicated. I don't think we really are very keen to be self-controlled all the time.
 
SPIEGEL: You say in your book that, in such cases, we leave the decisions up to "System 1."
 
Kahneman: Yes. Psychologists distinguish between a "System 1" and a "System 2," which control our actions. System 1 represents what we may call intuition. It tirelessly provides us with quick impressions, intentions and feelings. System 2, on the other hand, represents reason, self-control and intelligence.
 
SPIEGEL: In other words, our conscious self?
 
Kahneman: Yes. System 2 is the one who believes that it's making the decisions. But in reality, most of the time, System 1 is acting on its own, without your being aware of it. It's System 1 that decides whether you like a person, which thoughts or associations come to mind, and what you feel about something. All of this happens automatically. You can't help it, and yet you often base your decisions on it.
 
SPIEGEL: And this System 1 never sleeps?
 
Kahneman: That's right. System 1 can never be switched off. You can't stop it from doing its thing. System 2, on the other hand, is lazy and only becomes active when necessary. Slow, deliberate thinking is hard work. It consumes chemical resources in the brain, and people usually don't like that. It's accompanied by physical arousal, increasing heart rate and blood pressure, activated sweat glands and dilated pupils …
 
SPIEGEL: … which you discovered as a useful tool for your research.
 
Kahneman: Yes. The pupil normally fluctuates in size, mostly depending on incoming light. But, when you give someone a mental task, it widens and remains surprisingly stable -- a strange circumstance that proved to be very useful to us. In fact, the pupils reflect the extent of mental effort in an incredibly precise way. I have never done any work in which the measurement is so precise.


The Pitfalls of Intuition
 
SPIEGEL: By studying human intuition, or System 1, you seem to have learned to distrust this intuition…
 
Kahneman: I wouldn't put it that way. Our intuition works very well for the most part. But it's interesting to examine where it fails.
 
SPIEGEL: Experts, for example, have gathered a lot of experience in their respective fields and, for this reason, are convinced that they have very good intuition about their particular field. Shouldn't we be able to rely on that?
 
Kahneman: It depends on the field. In the stock market, for example, the predictions of experts are practically worthless. Anyone who wants to invest money is better off choosing index funds, which simply follow a certain stock index without any intervention of gifted stock pickers. Year after year, they perform better than 80 percent of the investment funds managed by highly paid specialists. Nevertheless, intuitively, we want to invest our money with somebody who appears to understand, even though the statistical evidence is plain that they are very unlikely to do so. Of course, there are fields in which expertise exists. This depends on two things: whether the domain is inherently predictable, and whether the expert has had sufficient experience to learn the regularities. The world of stock is inherently unpredictable.
 
SPIEGEL: So, all the experts' complex analyses and calculations are worthless and no better than simply betting on the index?
 
Kahneman: The experts are even worse because they're expensive.
 
SPIEGEL: So it's all about selling snake oil?
 
Kahneman: It's more complicated because the person who sells snake oil knows that there is no magic, whereas many people on Wall Street seem to believe that they understand. That's the illusion of validity …
 
SPIEGEL: … which earns them millions in bonuses.
 
Kahneman: There is no need to be cynical. You may be cynical about the whole banking system, but not about the individuals. Many believe they are building real value.
 
SPIEGEL: How did Wall Street respond to your book?
 
Kahneman: Oh, some people were really mad; others were quite interested and positive. It was on Wall Street, I heard, that somebody gave a thousand copies of my book to investors. But, of course, many professionals still don't believe me. Or, to be more precise, they believe me in general, but they don't apply that to themselves. They feel that they can trust their own judgment, and they feel comfortable with that.
 
SPIEGEL: Do we generally put too much faith in experts?
 
Kahneman: I'm not claiming that the predictions of experts are fundamentally worthless. … Take doctors. They're often excellent when it comes to short-term predictions. But they're often quite poor in predicting how a patient will be doing in five or 10 years. And they don't know the difference. That's the key.
 
SPIEGEL: How can you tell whether a prediction is any good?
 
Kahneman: In the first place, be suspicious if a prediction is presented with great confidence. That says nothing about its accuracy. You should ask whether the environment is sufficiently regular and predictable, and whether the individual has had enough experience to learn this environment.
 
SPIEGEL: According to your most recent book "Thinking, Fast and Slow," when in doubt, it's better to trust a computer algorithm.
 
Kahneman: When it comes to predictions, algorithms often just happen to be better.
 
SPIEGEL: Why should that be the case?
 
Kahneman: Well, the results are unequivocal. Hundreds of studies have shown that wherever we have sufficient information to build a model, it will perform better than most people.
 
SPIEGEL: How can a simple procedure be superior to human reasoning?
 
Kahneman: Well, even models are sometimes useless. A computer will be just as unreliable at predicting stock prices as a human being. And the political situation in 20 years is probably completely unpredictable; the world is simply too complex. However, computer models are good where things are relatively regular. Human judgment is easily influenced by circumstances and moods: Give a radiologist the same X-ray twice, and he'll often interpret it differently the second time. But with an algorithm, if you give it the same information twice, it will turn out the same answer twice.
 
SPIEGEL: IBM has developed a supercomputer called "Watson" that is supposed to quickly supply medical diagnoses by analyzing the description of symptoms and the patient's history. Is this the medicine of the future?
 
Kahneman: I think so. There's no magic involved.
 
SPIEGEL: Some say the next blockbuster movie could be predicted by an algorithm, as well.
 
Kahneman: Why not? The alternative is simply not very convincing. The entertainment industry wastes a lot of money on films that don't work. It shouldn't be that difficult to develop a program that at least doesn't do any worse than the intuitive judgments that govern these decisions now.
 
SPIEGEL: But most people tend to be hostile to formulas and cold calculations, and many patients prefer a doctor who treats them holistically.
 
Kahneman: It's a question of what you're used to. So-called "evidence-based medicine" is making progress, and it's based on clear, replicable algorithms. Or take the oil industry. There are strict procedures on deciding whether or not to drill in a specific location. They have a set of questions that they ask, and then they measure. Relying on intuition would be far too error-prone. After all, the risks are high, and there is a lot of money at stake.


Memory, Trauma and Time
 
SPIEGEL: In the second part of your book, you deal with the question of why we can't even rely on our memory. You claim, for example, that when a person has suffered, in retrospect, it doesn't matter to him or her how long the pain lasted. That sounds rather absurd.
 
Kahneman: The findings are clear. We demonstrated this in patients who had had a colonoscopy. In half of the cases, we asked the doctors to wait a while after having finished before removing the tube from the patients. In other words, for them, the unpleasant procedure was prolonged. And that, it turns out, greatly improved the scores that people gave to the experience. The patients clearly based their global assessments of the procedure on how it ended, and they perceived the gradual subsidence of pain as being much more pleasant. Many other experiments arrived at similar results. In some cases, subjects had to tolerate noise and, in others, they had to hold their hand in cold water. The issue is not memory: People know how long they had to endure the pain, so their memory is correct. But their evaluation of the experience is unaffected by duration.
 
SPIEGEL: How can that be?
 
Kahneman: Every experience is given a score in your memory: good, bad, worse. And that's completely independent of its duration. Only two things matter here: the peaks -- that is, the worst or best moments -- and the outcome. How did it end up?
 
SPIEGEL: So, after painful procedures, should doctors simply ask whether they might subject the patient to a few more minutes of moderate torture?
 
Kahneman: No. Because if a doctor says it's over, the episode is finished for the patient -- and that's the point at which a value is assigned. After that, a new episode begins, and no one would ask for additional pain in advance. … But it would probably be useful, mainly for patients who have suffered a trauma. My advice would be: Don't remove them from the site of the trauma to treat them elsewhere. You should try to make them feel better in the same place so that the memory of what happened to them will not be as bad.
 
SPIEGEL: Because this changes the perception they associate with that location?
 
Kahneman: No, because moving away from the location is perceived as the end of an episode, and the evaluation made at that time will be stored in memory.
 
SPIEGEL: But that doesn't prevent us from living through every bad experience again and again, as in a movie.
 
Kahneman: That certainly is the case. But what you evaluate in the end, or what you will fear in the future, that just happens to be this representative, especially intense moment, and not the entire episode. It's similar with animals, by the way.
 
SPIEGEL: How can you know that?
 
Kahneman: It's easy to study -- in rats, for example -- by giving them light electric shocks. You can vary both the intensity and the duration of the shocks. And you can measure how afraid they are. You'll see that it depends on the intensity, not on the duration.
 
SPIEGEL: In other words, our memory also informs what we expect from the future?
 
Kahneman: Exactly. This can be demonstrated with a small thought experiment I sometimes ask people to do: Suppose you go on a vacation and, at the end, you get an amnesia drug. Of course, all your photographs are also destroyed. Would you take the same trip again? Or would you choose one that's less challenging? Some people say they wouldn't even bother to go on the vacation. In other words, they prefer to forsake the pleasure, which, of course, would remain completely unaffected by its being erased afterwards. So they are clearly not doing it for the experience; they are doing it entirely for the memory of it.
 
SPIEGEL: Why is it so important for us to imagine our lives as a collection of stories?
 
Kahneman: Because that's all we keep from life. It's going by, and you are left with stories. That's why people exaggerate the importance of memories.
 
SPIEGEL: But, if I'm planning a vacation, I wouldn't accept being terribly bored most of the time just for the sake of a few highlights.
 
Kahneman: Of course not. And if I ask you whether you would rather tolerate pain for three minutes or five minutes, the answer is just as clear. But, in retrospect, the vacation that left you with the best memories wins out. How long you've been bored between the memorable moments is no longer relevant.
 
SPIEGEL: It was rather exhausting and difficult for you to write the book. You must remember how long it lasted, that is, the duration.
 
Kahneman: That's true. I could very quickly go through a film of four years of pain, but mostly I remember moments -- and most of them are bad.
 
SPIEGEL: Do you re-evaluate this period of time now that the book has become such a big success?
 
Kahneman: There is much less pain associated with the memory now. In my mind, if the book had done less well, I would feel even worse about what happened to me during those years. So, clearly, what happens later changes the story.
 
SPIEGEL: Would we even start such a challenging project a second time if it weren't for the partial amnesia?
 
Kahneman: Well, you don't know how much pain you are going to have. But, later on, we remember the great relief we felt after completing the task. … In childbirth, for example, it's all about the story that ends well, and that offsets what may have been horrible until then. It's as if we were divided into an experiencing self, which has to endure the strain, and a remembering self, which doesn't care at all.


Happiness and the Remembering Self
 
SPIEGEL: So, do we have our remembering self to thank for the fact that we courageously go out in search of adventure and memorable moments in life? Would we otherwise simply be content with long, dull periods of moderate well-being?
 
Kahneman: Yes, our lives are governed by the remembering self. Even when we're planning something, we anticipate the memories we expect to get out of it. The experiencing self, which may have to put up with a lot in return, has no say in the matter. Besides, what the experiencing self has enjoyed can be completely devaluated in retrospect. Someone once told me that he had recently listened to a wonderful symphony but, unfortunately, at the end, there was a terrible screeching sound on the record. He said that ruined the whole experience. But, of course, the only thing it ruined was the memory of the experience, (which was) still a happy experience.
 
SPIEGEL: Does that also apply to an entire life? Is it all about the end?
 
Kahneman: Yes, in a sense. We can't help but look at life retrospectively, and we want it to look good in retrospect. There was once an experiment in which the subjects were supposed to evaluate the life of a fictitious woman who had had a very happy life but then died in an accident. Astonishingly, whether she died at 30 or 60 had no effect whatsoever on their evaluation. But when the subjects were told that the woman had had 30 happy years followed by five that were no so happy, the scores got worse. Or imagine a scientist who has made an important discovery, a happy and successful man, and after his death it turns out that the discovery was false and isn't worth anything. It spoils the entire story even though absolutely nothing about the scientist's life has changed. But now you feel pity for him.
 
SPIEGEL: Would you go so far as to say that it's the remembering self that makes us human? Animals probably don't collect memorable moments.
 
Kahneman: Well, I actually think that animals do because they must score experiences as worth repeating and others as worth avoiding. And, from the evolutionary point of view, that makes sense. The duration of an experience is simply not relevant. What matters for survival is whether it ended well and how bad it got. This also applies to animals.
 
SPIEGEL: In your view, the remembering self is very dominant -- to the point that it seems to have practically enslaved the experiencing self.
 
Kahneman: In fact, I call it a tyranny. It can vary in intensity, depending on culture. Buddhists, for example, emphasize the experience, the present; they try to live in the moment. They put little weight on memories and retrospective evaluation. For devout Christians, it's completely different. For them, the only thing that matters is whether they go to heaven at the end.
 
SPIEGEL: People reading your book will sympathize with the poor experiencing self, which essentially has to do our living.
 
Kahneman: That was my intention. Readers should realize that there is another way of looking at it. I would say it's comforting for me because both my wife and I complain all the time that our memories are terrible. We don't really go to the theater to remember what we've seen later on, but to enjoy the performance. Other people live through life collecting experiences like you collect pictures.
 
SPIEGEL: In other words, they think that only a wealth of memories can make them happy.
 
Kahneman: Here we have to distinguish between satisfaction and happiness. When you ask people whether they're happy, their answers can differ widely depending on their current mood. Let me give you an example: For years, the Gallup institute has been polling about a thousand Americans on various issues, including their well-being. One of the most surprising findings is that, when the first question is about politics, people immediately consider themselves less happy.
 
SPIEGEL: True calamities, on the other hand, seem to have surprisingly little effect on well-being. Paraplegics, for example, hardly differ from healthy individuals in terms of their satisfaction with life.
 
Kahneman: At any rate, the difference is smaller than one would expect. That's because, when we think of paraplegics, we are subject to an illusion that is hard to escape: We automatically focus on all the things that change as a result of the disability, and we overlook what is still the same in everyday life. It's similar with income. Everyone wants to make more money, and yet the salary level -- at least above a certain threshold -- has no influence whatsoever on emotional happiness, although life satisfaction continues to rise with income.
 
SPIEGEL: And where is that threshold?
 
Kahneman: Here in the United States, it's at a household income of about $75,000 (€60,000). Below that, it makes a substantial difference. It's terrible to be poor. No matter if you are sick or going through a divorce, everything is worse if you're poor.
 
SPIEGEL: So, is it harder to get used to illness or disability than poverty?
 
Kahneman: I think we adapt more quickly to improvement than to deterioration.
 
SPIEGEL: Professor Kahneman, we thank you for this interview.

Interview conducted by Manfred Dworschak and Johann Grolle.

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