Lessons from a Nobel laureate teach us how to think better
What can chemists learn from ideas in economics? Daniel Kahneman, who died in March this year, was a psychologist who won the Nobel memorial prize in economics in 2002 and I still remember how his book Thinking Fast And Slow affected my career. It made a big impact on me when I was just beginning to understand the power of statistical thinking.
The book tells the story of Kahneman’s own career, including his collaboration with fellow psychologist Amos Tversky (who died in 1996) and their work uncovering surprising flaws in human decision-making that would give birth to behavioural economics and earn him a Nobel prize. It explains the imperfect heuristics or short-cuts we use for ‘fast’ thinking and how many of our choices are not purely ‘slow’, deliberate, rational thinking. And that this can lead to costly decisions. In a complex world of increasingly abundant data and the powerful potential of probabilistic machinery of AI, the lessons of Kahneman and Tversky’s research are more relevant than ever.
In one of Kahneman’s examples, hundreds of millions of dollars were spent to make US schools smaller. Someone looking at the data noticed that the top 50 schools included an unexpectedly large number of small schools. Conclusion: let’s break up big schools to improve their performance.
