Book Review: The Undoing Project by Michael Lewis

 Hi all,  I'm still here, though given the amount of sleep I require, it doesn't seem like I'm here as much.  I did read one book that was quire remarkable, and I recommend it for everyone.

The Undoing Project by Michael Lewis is a biography of two psychologists, Danny Kahneman and Amos Tversky and the work they've done together on decision theory and the natural mistakes made by humans that can impact those decisions.  

Lewis starts trying to show how their work is important.  Lewis uses NBA General Manager Darryl Morey as an example and all the trouble he has experienced trying to determine if players from around the world would make good NBA basketball players. 

The book then goes and looks at Kahneman and Tversky's lives, from their births during and after the Holocaust, through their roles in the military fighting for newly-independent Israel, to their initial academic postings at Hebrew University, where they began their work together.  Most of this work consisted of finding room somewhere and talking through various questions for hours.  They then came up with questionnaires on human choices which they gave to their students, but also to expert economists throughout academia.  Results showed it didn't matter if you were an expert or not, everyone is subject to a set of biases which are best described through a set of heuristics, or rules of thumb.  

These results also showed that people are not naturally rational or logical in their thinking.  For example, people are often biased by context and the narrative surrounding a given situation.  One of the more memorable was the 'Lynda problem.'  A narrative description is given of Lynda showing her to be of liberal mind and interested in women's issues.  The questionnaire then asks which is more likely:

a) Lynda is a bank teller

b) Lynda is a bank teller and a member of the feminist movement

A large majority of people chose (b), which is ridiculous when you think about it from a strictly mathematical perspective.  Clearly, (b) is a subset of (a):  all feminist bank tellers are bank tellers.  (a) should be more likely just because there are more bank tellers than feminist bank tellers.

While all the material on decision theory and biases is interesting, it can be overwhelming to the reader.  I suggest one reads (or listen to on audiobook) the book like a novel, letting the psychology wash over you, getting the general gist but leaving the details for another time.  The book is interesting on a number of levels:  how Kahneman and Tversky came up with their theories; their relationship while building up the actual material; and the personality differences between the two academics -- Kahneman was clearly an introvert who wanted to solve interesting problems versus Tversky, an a-type personality who wanted to prove the theories were right.

Having finished this great story, I plan on learning more about decision heuristics, as documented in Kahneman's later books, including Thinking Fast and Slow.  I think this material is critical for decisions throughout business and life.  I would recommend a similar course of learning for my friends and colleagues.  Michael Lewis' book is a good way to 'easy yourself into' the topic, while being a good interesting read