Why smart people can be so stupid

Interesting Excerpts (Via Stanovich)

The sure-thing principle is not the only rule of rational thinking that humans have been shown to violate. A substantial research literature–one comprising literally hundreds of empirical studies conducted over nearly four decades–has firmly established that people’s responses often deviate from the performance considered normative on many reasoning tasks. For example, people assess probabilities incorrectly, they display confirmation bias, they test hypotheses inefficiently, they violate the axioms of utility theory, they do not properly calibrate degrees of belief, they overproject their own opinions onto others, they display illogical framing effects, they uneconomically honor sunk costs, they allow prior knowledge to become implicated in deductive reasoning, and they display numerous other information processing biases.

Very Important Excerpt (Via Stanovich)

Because of the failure to follow the normative rules of rational thought–because of the processing biases listed above–physicians choose less effective medical treatments (McNeil, Pauker, Sox, & Tversky, 1982; Redelmeier & Tversky, 1990, 1992; Sutherland, 1992); people fail to accurately assess risks in their environment (Lichtenstein, Slovic, Fischhoff, Layman, & Combs, 1978; Margolis, 1996; Yates, 1992); information is misused in legal proceedings (Saks & Kidd, 1980–1981); millions of dollars are spent on unneeded projects by government and private industry (Arkes & Ayton, 1999; Dawes, 1988, pp. 23–24); parents fail to vaccinate their children (Baron, 1998); unnecessary surgery is performed (Dawes, 1988, pp. 73–75); animals are hunted to extinction (Baron, 1998; Dawkins, 1998); billions of dollars are wasted on quack medical remedies (Gilovich, 1991); and costly financial misjudgments are made (Belsky, 1995; Belsky & Gilovich, 1999; Fridson, 1993; Thaler, 1992; Tversky, 1996; Willis, 1990).

So?

The findings from the reasoning and decision making literature and the many real-world examples of the consequences of irrational thinking (e.g., Belsky & Gilovich, 1999; Gilovich, 1991; Piattelli-Palmarini, 1994; Shermer, 1997; Sutherland, 1992; Thaler, 1992) create a seeming paradox. The physicians using ineffective procedures, the financial analysts making costly misjudgments, the retired professionals managing their money poorly– none of these are unintelligent people. The experimental literature is even more perplexing. Over 90% of the subjects in the studies in the literature are university students–some from the most selective institutions of higher learning in the world (Tversky & Shafir’s subjects are from Stanford). Yet these are the very people who have provided the data that indicate that a substantial proportion of people can sometimes violates some of the most basic strictures of rational thought such as transitivity or the sure-thing principle. It appears that an awful lot of pretty smart people are doing some incredibly dumb things. How are we to understand this seeming contradiction?

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27. January 2010 by Miguel Barbosa
Categories: Curated Readings, Wisdom Seeking | Leave a comment

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