Irrational

Last Summer I had the privilege of reading, among other masterpieces, Thinking, Fast and Slow. The authoer, Daniel Kahneman, is a psychologist who was awarded the Nobel prize in Economics over his work around the psychology of judgement and decision making.

The book compiles a huge list of behavioural and decision biases, illustrating their effect through conducted experiments. These include, but are not limited to, the (amazing) anchoring effect, availability heuristic, base rate neglect, confirmation bias, decoy effect, duration neglect, expectation bias, framing effect, gambler's fallacy, illusion of control, insentivity to sample size, irrational escalation, just-world hypothesis, less-is-better effect, loss aversion, negativity bias, normalcy bias, omission bias (what we see is what we believe), optimistm bias, outcome bias, zero-risk bias. While it would take way too much time and paper (yes I still use it) to go through all of them here I urge you to look them up or, even better, read the book! Of course you can also just ask me, and settle for an ignorant's response.

The author tries to find a raison d'étre for these odd behaviours, ending up with the theory of the 2 systems. Basically he believes we're equipped with two different thinking mechanisms (without trying to make any physical/biological association). The first one is fast, emotional and hugely biased and heuristic based, thus irrational. The second is rational, though slow, and it's basicly how we think of ourselves in terms of reasoning. Unfortunately we're wrong, terribly wrong. Seems like system 1 is the one pulling the string as default, and system 2 is only called upon through conscious and effortful focusing. The conclusion is simples: we're not rational.

That statement, although seemingly inoquous and theoretical, has a huge practical impact in many different areas. Enough to be acknowledged with a Nobel prize in Economics. The reason is trivial: the entire Economy system is based on the premise that we are (or at least resemble greatly) rational agents. The same happens in other important areas, such as the political systems. When you drop that single premise it's as if we're solving a Maths problem with the wrong equations. The numbers add up, but the solution doesn't hold. And that really is a problem; we're agents alright, but hardly rational. After reading this book, I'm inclined to think that Dilbert (from The Dilbert Principle) was actually closer to the truth: people are idiots. Not my beloved readers, of course.

Of course politicians and people from marketing are aware of some of these 'glitches' in human reasoning, exploiting them to sell an item or an idea. It is not rare at all to listen to people complaining that they are manipulating us. However, from what I've read, I'm afraid this might be just the beginning. Sadly, being aware of our flaws is only helpful to some extent, given that our attention span is quite limited and therefore we'll quickly rever to our irrational form.