Strategy. Innovation. Brand.

Daniel Kahneman

Two Brains. So What?

Alas, poor System 1...

Alas, poor System 1…

We have two different thinking systems in our brain, often called System 1 and System 2. System 1 is fast and automatic and makes up to 95% of our decisions. System 2 is a slow energy hog that allows us to think through issues consciously. When we think of thinking, we’re thinking of System 2.

You might ask: Why would this matter to anyone other than neuroscientists? It’s interesting to know but does it have any practical impact? Well, here are some things that we might want to change based on the dual-brain idea.

Economic theory – our classic economic theories depend on the notion of rational people making rational decisions. As Daniel Kahneman points out, that’s not the way the world works. For instance, our loss aversion bias pushes us towards non-rational investment decisions. (See also here). It happens all the time and has created a whole new school of thought called behavioral economics (and a Nobel prize for Kahneman).

Intelligence testing – System 1 makes up to 95% of our decisions but our classic IQ tests focus exclusively on System 2. That doesn’t make sense. We need new tests that incorporate rationality as well as intelligence.

Advertising – we often measure the effectiveness of advertising through awareness tests. Yet System 1 operates below the threshold of awareness. We can know things without knowing that we know them. As Peter Steidl points out, if we make 95% of our decisions in System 1, doesn’t it also follow that we make (roughly) 95% of our purchase decisions in System 1? Branding should focus on our habits and memory rather than our awareness.

Habits (both good and bad) – we know that we shouldn’t procrastinate (or smoke or eat too much, etc.). We know that in System 2, our conscious self. But System 2 doesn’t control our habits; System 1 does. In fact, John Arden calls System 1 the habitual brain. If we want to change our bad habits (or reinforce our goods ones), we need to change the habits and rules stored in System 1. How do we do that? Largely by changing our memories.

Judgment, probability, and public policy – As Daniel Kahneman points out, humans are naturally good at grammar but awful at statistics. We create our mental models in System 1, not System 2. How frequently does something happen? We estimate probability based on how easy it is to retrieve memories. What kinds of memories are easy to retrieve? Any memory that’s especially vivid or scary. Thus, we overestimate the probability of violent crime and underestimate the probability of good deeds. We make policy decisions and public investments based on erroneous – but deeply held – predictions.

Less logic, louder voice – people who aren’t very good at something tend to overestimate their skills. It’s the Dunning-Kruger effect – people don’t recognize their own ineptitude. It’s an artifact of System 1. Experts will often craft their conclusions very carefully with many caveats and warnings. Non-experts don’t know that their expertise is limited; they simply assume that they’re right. Thus, they often speak more loudly. It’s the old saying: “He’s seldom right but never in doubt”.

Teaching critical thinking – I’ve read nearly two-dozen textbooks on critical thinking. None of them give more than a passing remark or two on the essential differences between System 1 and System 2. They focus exclusively on our conscious selves: System 2. In other words, they focus on how we make five per cent of our decisions. It’s time to re-think the way we teach thinking.

How We Think And What It Means

Let's think about this.

Let’s think about this.

We have not one but two thinking systems in our heads. Daniel Kahneman, a Nobel laureate in economics, dubs them System 1 and System 2. System 1 is fast, automatic, energy efficient, subconscious, and always on. We don’t think about it; it thinks for us. Some observers claim that System 1 makes 95% of our decisions. We merrily mosey along, not even aware that we’re making decisions.

We are, on the other hand, aware of System 2. When we think about thinking, we’re thinking about System 2. It’s our conscious self. It’s where we consider ideas, weigh evidence, and reach conclusions. Unfortunately, System 2 is an energy hog so we use it sparingly. Like other forms of exercise, System 2 requires effort, practice, and discipline. It’s hard.

We get by most of the time on System 1. Usually that’s fine – System 1 makes a lot of good decisions. But not all the time. System 1 produces biases like stereotyping, temporizing, risk aversion, and unbridled fear. If we don’t have an effective, well-tuned System 2 to overcome those biases, we can do a lot of damage to ourselves and others.

Maria Konnikova (pictured), in her lovely book, Mastermind: How To Think Like Sherlock Holmes, compares System 1 to Watson and System 2 to Holmes. System Watson represents “…our naïve selves, operating by the lazy thought habits … that we’ve spent our whole lives acquiring….” On the other hand, System Holmes, represents “… our aspirational selves, the selves that we’ll be once we’re done learning how to apply his method of thinking to our everyday lives and, in so doing break the habits of our Watson system once and for all.”

System Watson comes to us naturally. System Holmes needs to be learned, practiced, and mastered. As Konnikova notes, “…to break from that autopiloted [Watson] mode, we have to be motivated to think in a mindful, present fashion, to exert effort on what goes through our heads instead of going with the flow.”

David Brooks, in the Social Animal: The Hidden Sources of Love, Character, and Achievement, describes our bias towards the conscious mind (System 2): “The conscious mind writes the autobiography of our species. Unaware of what is going on deep down inside, the conscious mind assigns itself the starring role. It gives itself credit for performing all sorts of tasks it doesn’t really control.”

Brooks compares the conscious mind to ”… a general atop a platform, who sees the world from a distance and analyzes things linearly and linguistically….” The unconscious mind, “…is like a million little scouts [that] … careen across the landscape, sending back a constant flow of signals and generating instant responses. They maintain no distance from the environment, but are immersed in it. They scurry about, interpenetrating other minds, landscapes, and ideas.”

For Brooks, the individual is the star in the “outer mind”. In contrast, “… the inner mind highlights the power of relationships and the invisible bonds between people. If the outer mind hungers for status, money, and applause, the inner mind hungers for harmony and connection….”

From Kahneman, we learn about the native biases of System 1 and an important implication: we’re not rational when it comes to economic matters. This is the insight that won the Nobel Prize. From Konnikova, we learn how to observe and deduce. The implication: with sufficient motivation, we can indeed learn to overcome our biases. From Brooks, we learn that System 2 is an individualist while System 1 is a collectivist. The implication: this duality is an important source of tension in the body politic.

What else can we learn by comparing System 1 to System 2? Let’s talk more about that tomorrow.

Should You Trust Your Gut?

Gut Feel

Gut Feel

When my students in critical thinking start to separate logic from emotion, they often say things like:

“I used to get tangled up between thinking and feeling. I now realize that I should ignore my feelings.”

“Emotions don’t help me think clearly. I’m not going to pay attention to them any more.”

These students have swung from one end of the pendulum to the other. On one end, thoughts and emotions are indeed tangled up. On the other end, thought reigns supreme; emotion is banished. Is that good? Should we really ignore our emotions?

Actually, no. Our emotions tell us something. They may warn us of dangers that we’re not aware of consciously. They may also be flat out wrong. It’s a System 1 issue. We use shortcuts – heuristics — to get quick answers. Many times those shortcuts produce the right answer. Sometimes they don’t. Wisdom is knowing the difference.

Here’s my advice on when you probably should and probably shouldn’t pay attention to your emotions:

Probably should – when something feels wrong, but you’re not sure what. You feel ill at ease with a new acquaintance but you don’t know why. You’re thinking about investing in a company that seems to have good prospects, but something feels wrong.

Your System 1 is always scanning the environment, alerting your subconscious to useful (and not so useful) information. It spots the pothole and guides your foot around it. It may also spot “potholes” in that company with good prospects or in your new acquaintance.

In situations like these, it’s good idea to step back, look around, and switch on all your observational tools. Above all, slow things down. Your System 1 is warning you that something needs further investigation. It’s a good idea to investigate.

Remember, however, that your System 1 can be overly protective. It doesn’t like novelty. It’s crotchety. It doesn’t particularly like strangers – especially if they look or act or talk differently. If you always listen to System 1 warnings, you’ll miss out on a lot of interesting people and adventures. So, when System 1 tells you to investigate further, it’s a good idea to do exactly that. But keep an open mind.

Maybe/maybe not – retrospective dot connection. We all make up stories about why things happened in the past. I can tell you a very clearheaded story of how and why my career evolved just as it did. For the most part, I’ll be wrong.

We find it very hard to accept that things might happen randomly. Perhaps there’s no rhyme or reason to it at all. That’s emotionally unsatisfying. It means we have no control. So we make up stories that seem logical but may be completely untrue. It’s called confabulation.

Unfortunately, we don’t realize that we’re doing it. The story sounds logical so we assume it’s true. We assume that the little model of reality that we build in our heads accurately reflects the reality that’s “out there”. We also assume that other people have the same view of reality. It’s not true.

It’s hard not to build stories. You’ll probably continue to do it. Just be aware that you’re doing it and that your stories are (probably) wrong.

Probably not – anything statistical. As Daniel Kahneman and others have pointed out, we’re naturally terrible at statistics, even if we’re trained at it. We assume that there are patterns where there are none. We assume that we can predict future outcomes based on past performance. We can’t.

So, if your intuition tells you that the number 24 is “due” to come up on the roulette wheel – it hasn’t been seen in over an hour – just ignore it. You’re wrong, you’re a lousy statistician, and you always will be.

Coincidence? I Think Not.

Coincidence? I think not.

Coincidence? I think not.

It’s a tough world out there so I start every day by reading the comics in our local newspaper. Comics and caffeine are the perfect combination to get the day started.

In our paper, the comics are in the entertainment section, which is usually either eight or twelve pages long. The comics are at the back. Last week, I pulled the entertainment section out, glanced at the first page, then flipped it open to the comics.

While I was reading my favorite comics, a random thought popped into my head: “I wonder if I could use Steven Wright’s comedy to teach any useful lessons in my critical thinking class?” Pretty random, eh?

Do you know Steven Wright? He’s an amazingly gifted comedian whose popularity probably peaked in the nineties. Elliot was a kid at the time and he and I loved to listen to Wright’s tapes. (Suellen was a bit less enthusiastic). Here are some of his famous lines:

  • All those who believe in psychokinesis raise my hand.
  • I saw a man with wooden legs. And real feet.
  • I almost had a psychic girlfriend but she left me before we met.
  • Everyone has a photographic memory. Some just don’t have film.

Given Wright’s ironic paraprosdokians, it seems logical that I would think of him as a way to teach critical thinking. But why would he pop up one morning when I was enjoying my coffee and comics?

I finished the comics and closed the entertainment section. On the back page, I spotted an article announcing that Steven Wright was in town to play some local comedy clubs. I was initially dumbfounded. I hadn’t seen the article before reading the comics. How could I have known? I reached an obvious conclusion: I must have psychic powers.

While congratulating myself on my newfound powers, I turned back to the front page of the entertainment section. Then my crest fell. There, in the upper left hand corner of the front page, was a little blurb: “Steven Wright’s in town.”

I must have seen the blurb when I glanced at the front page. But it didn’t register consciously. I didn’t know that I knew it. Rather, my System 1 must have picked it up. Then, while reading the comics, System 1 passed a cryptic note to my System 2. I had been thinking about my critical thinking class. When my conscious mind got the Seven Wright cue from System 1, I coupled it with what I was already thinking.

I wasn’t psychic after all. Was it a coincidence? Not at all. Was I using ESP? Nope. It was just my System 1 taking me for a ride. Let that be a lesson to us all.

(For more on System 1 versus System 2, click here and here and here).

Immoral Afternoons

Good advice.

Good advice.

I used to work for a CEO who had one hard and fast rule when it came to making decisions: he wouldn’t make any important decisions after 2:00 in the afternoon. I used to think it was an odd and unnecessary rule … but then I started counting calories.

My little food diary app keeps track of what I eat and lets me know if I’m getting too much of this or not enough of that. It’s interesting to keep track of what I consume. But what really surprised me was not what I eat so much as when I eat. I eat a well-balanced, healthy diet throughout the day. Then, around 7:00 at night, all hell breaks loose. On a typical day, I eat roughly 50% of my calories between 7:00 and 10:00 at night. If I went to bed at 7:00 pm, I’d be much healthier.

My experience reminded me of Daniel Kahneman’s story about the Israeli parole board. The default decision in any such hearing is to deny parole. To permit parole, the board has to find information that would point toward a positive outcome. In other words, it’s easy to deny parole. It takes more work – sometimes quite a bit more work – to grant parole.

Kahneman reports on a study that tracked parole decisions by time of day. Prisoners whose cases were considered just after lunch were more likely to win parole than those whose cases were considered before lunch. It all has to do with energy. Our brains consume huge amounts of energy. Making difficult decisions requires even more energy. Just before lunch, members of the parole board don’t have much energy. Just after lunch they do. So before lunch, they’re more likely to make the default decision. After lunch, they’re more capable of making the more laborious decision.

Energy doesn’t just affect decision making. It also affects will power (which, of course, is a form of decision making). When our bodies have sufficient stores of energy, we also have more will power. Why do I eat so many calories after 7:00 pm? Perhaps because my energy stores are at a low and, therefore, my will power is also at a low. It might be smarter to spread my calories more evenly throughout the day so my energy – and will power – don’t ebb.

Energy also affects ethics. A research study published in last month’s edition of Psychological Science is titled, “The Morning Morality Effect”. The researchers, Maryam Kouchaki and Isaac Smith, ran four experiments and found that people “… engaged in less unethical behavior … on tasks performed in the morning than in the same tasks performed in the afternoon.” In fact, “people were 20% to 50% more likely to lie, cheat, or otherwise be dishonest in the afternoon than in the morning.”

What’s the common denominator here? Energy depletion. As the day wears on and our energy levels drop, we’re less able to make complicated decisions or resist temptation. The parole board example suggests that we can combat this to some degree simply by eating. I wonder if taking a nap might also help – though I haven’t seen any research evidence of this.

Bottom line: my old boss was right. Make the tough decisions in the morning. Take it easy in the afternoon.

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