THE MAN IS INSANE

2024 Author: Harry Day | [email protected]. Last modified: 2023-12-17 15:43

The mind usually serves us only to

to boldly do stupid things

Francois de La Rochefoucauld

Psychologist Daniel Kahneman received the Nobel Prize in Economics in 2002. It is surprising, to say the least, that the highest award in economics should be given not to an economist, but to a psychologist. This happened only twice, when mathematicians Leonid Kantorovich (in 1974) and John Nash (1994) received the prize in economics.

Stupidity is the engine of progress

Kahneman came to an interesting conclusion. It turns out that human actions (consequently, economic tendencies, and, consequently, the entire history of mankind) are guided not only and not so much by the mind of people as by their stupidity, since a great many actions performed by people are irrational. In short, human stupidity is at the helm of life.

Of course, the thought is not new. The fact that people - with ambition and stupidity - was known at all times, but Kahneman experimentally proved that the illogicality of people's behavior is natural and showed that its scale is incredibly large. The Nobel Committee recognized that this psychological law is directly reflected in economics. According to the Nobel Committee, Kahneman "with sufficient reason to question the practical applicability of the fundamental postulates of economic theory."

Economists agreed that the highest award in economics was awarded to a psychologist quite rightly, and thus found the courage to admit that since the time of Smith and Ricardo they have been soaring brains to each other and to all of humanity, for they somewhat simplified and idealized our life, believing that people in their commodity-money actions act rationally and balanced.

Economic forecasts before the beginning of the 21st century were akin to 19th century weather forecasts in the sense that they practically did not take into account the factor of human stupidity - the influence of passions and emotions on decision-making - just as forecasters of the last century did not take into account the powerful factor influencing the weather of cyclones. and anticyclones visible from space. And the fact that people have finally recognized the advisory voice of their own stupidity in making business decisions is a major breakthrough in their minds.

Economic issues

Have you come across the following questions on your economics exam (if you had to take it):

- How did Clinton's sexual addiction affect the US budget deficit?

- How does speculation and prejudice in the confused brains of participants in trading on the stock exchange affect stock prices?

- How many alarmists of the world currency market Forex will thoughtlessly rush to convert dollars into pounds sterling if the White House collapses (mind you - not all of America, but only the White House)?

I didn’t come across either. Do you know why? Because such questions until recently were considered too frivolous - as if the above factors of influence did not exist at all.

So, the merit of Kahneman is that he made serious men seriously think about the influence of such "frivolous", but weighty factors.

Professor Kahneman's Experiments

In his works: "The Psychology of Forecasting" (1973), "Decision Making under Uncertainty" (1974), "Theory of Prospects: Analysis of Decision Making under Risk" (1979), "Decision Making and the Psychology of Choice" (1981) and others Daniel Kahneman and his late colleague Amos Tversky described simple, ingenious experiments that shed light on human inadequacy in perception. Here are some of them:

LINDU CHALLENGE

Students of the Faculty of Mathematics were asked to solve something like this:

Linda is a mature woman who hit her thirties, and the energy from her is so rushing. At her leisure, she wraps beautiful toasts no worse than the mustachioed Georgian toastmakers, and at the same time can knock over a glass of moonshine without batting an eye. In addition, she is enraged by any manifestations of discrimination and incited demonstrations in defense of African rhinos.

Attention, question:

Which of the two options is more likely: 1 - that Linda is a bank teller or 2 - that Linda is a bank teller and a feminist?

Over 70% of the participants in the experiment chose the second option because Linda's preliminary description corresponded to their ideas about feminists, although this description was irrelevant and distracting, like a silver spoon with an inconspicuous pike hook. Probability students knew that the probability of a simple event occurring is higher than the probability of a composite event - that is, the total number of cashiers is greater than the number of feminist cashiers. But they took the bait and fell for the hook. (As you can imagine, the correct answer is 1).

Hence the conclusion: stereotypes prevailing over people easily overshadow a sober mind.

THE LAW OF THE CUP

Imagine:

A visitor entering a cafe is greeted by a waitress with approximately the following exclamations: oh, kind of cool, it came true! - finally, the thousandth visitor has come to us! - and here's a solemn prize for that - a cup with a blue border! The visitor accepts the gift with a forced smile, without obvious signs of delight (and why do I need a cup? - he thinks). He orders a steak with onions and chews silently, staring blankly at an unnecessary gift and thinking to himself where to put it. But before he has time to take a sip of jelly, the same waitress in an apron runs up to him and apologetically says that, they say, excuse me, they miscalculated - it turned out that you are the 999th, and the thousandth one is that disabled person who came in with with a club - he grabs a cup and runs away screaming: who do I see! etc. Seeing such a turn, the visitor begins to worry: eh !, eh !!, EEE !!! Where are you going?! Here, the infection! - his irritation builds to the level of fury, although he needs a cup no more than a paddle.

Conclusion: the degree of satisfaction from the acquisition (cup, spoon, ladle, wife and other property) is less than the degree of grief from adequate losses. People are ready to fight for their pocket penny and are less inclined to bend over for a ruble.

Or if, say, during negotiations, no one pulled you by the tongue, and you joyfully promised your opponent an additional discount, then, as a rule, there is no turning back - otherwise, negotiations may come to a standstill or collapse completely. After all, a person is such that he usually takes concessions for granted, and if you change your mind, want to replay and return "everything as it was," he will perceive this as a shameless attempt to steal his legal property. Therefore, plan the upcoming negotiations - clearly know what you want from them and how much. At minimal cost, you can force your opponent to be as happy as an elephant (there is a psychology of communication for this), or you can spend a lot of time, nerves and money and, as a result, remain the last jerk in his eyes. Be soft on the personality of your opponent and hard on the subject of the negotiation.

EMOTIONAL DISTORTIONS OF THE LAWS OF PROBABILITY

Kahneman and Tversky, again, mathematics students were asked to consider the following situation:

Let's say an American aircraft carrier with 600 sailors on board is sinking (although the original problem statement considered the situation with hostages, which is unpleasant today). You have received an SOS signal and you have only two options to save them. If you choose the first option, it means that you will sail to the rescue on the fast but small cruiser Varyag and save exactly 200 sailors. And if the second, then you will sail on the battleship "Prince Potemkin-Tavrichesky" (popularly - the battleship "Potemkin"), which is low-speed, but roomy, therefore, with a probability of 1/2, the entire crew of the aircraft carrier will either sink into the abyss, or everyone will drink champagne, in general - 50 to 50. You only have enough fuel to refuel one ship. Which option for rescuing drowning people is preferable - "Varyag" or "Potemkin"?

Approximately 2/3 of the students participating in the experiment (72%) chose the variant with the Varyag cruiser. When asked why they chose it, the students answered that if you sail on the Varyag, 200 people are guaranteed to survive, and in the case of the Potemkin, perhaps everyone will die - I can't risk all the sailors!

Then, to another group of the same students, the same problem was formulated in a slightly different way:

Again, you have two options for rescuing the aforementioned sailors. If you choose the cruiser "Varyag", then exactly 400 of them will die, and if the battleship "Potemkin" - then again 50-50, that is, all or none.

With this formulation, 78% of the students have already chosen the battleship Potemkin. When asked why they did this, the following answer was usually given: in the variant with the Varyag, most of the people die, and the Potemkin has a good chance of saving everyone.

As you can see, the condition of the problem has essentially not changed, just in the first case the emphasis was placed on 200 surviving sailors, and in the second - on 400 dead - which is the same (remember? - what we are silent about, for the listener, as it were does not exist - take a look here).

The correct solution to the problem is as follows. The probability of 0.5 (which in the Potemkin variant) is multiplied by 600 sailors and we get the probable number of rescued persons equal to 300 (and, accordingly, the same probable number of drowned persons). As you can see, the probable number of rescued sailors in the variant with the Potemkin battleship is greater (and the probable number of those drowned, respectively, less) than in the variant with the Varyag cruiser (300> 200 and 300 <400). Therefore, if we put emotions aside and solve the problem according to the mind, then the option of rescue on the battleship Potemkin is preferable.

In general, as you can see, most of the participants in this experiment made decisions based on emotions - and this despite the fact that they all understood the laws of probability better than ordinary people on the street.

Takeaways: Quit smoking, learn to swim, and take public speaking courses. Well, more seriously, it seems that more than two-thirds of humanity are potential patients of Professor Kahneman, because although people know a lot, they know little about how to use knowledge in practice. And again, the person is more impressed by the loss than by the achievement. And one more thing: understanding the theory of probability is sometimes much more useful than knowing foreign languages and principles of accounting.

People can't see beyond their own noses

When making decisions, the choice of people is not always dictated by a sober mind, but often by instincts, emotions, or what is commonly called intuition (conclusions on insufficient grounds). As a rule, when people in life make intuitive decisions on insufficient grounds, then if they guess, they remember them and take credit for them, and if they make mistakes, they blame the circumstances and forget. And then they say: I always rely on intuition, and it never lets me down!

Although people can theoretically integrate and operate with cotangents on paper, in practice they tend only to add and subtract in life and usually do not go further than multiplication and division.

Former excellent students in school are often poor students in life. Professors and academics know Bohr's postulates, Mendel's laws and the theory of quantum fields, but in reality they can be bankrupt in simple enterprises, complete laymen in elementary psychology of communication, unhappy in marriage, and some of them drool over the minutes of the meeting at an international conference.

On the other hand, some clairvoyant grandmother with a claim to age-old wisdom is always ready to explain to you that your failures according to the law of karma were blamed on you by your sinful great-grandfather, who in his youth ditched her and abandoned her, although she herself, of course, has no idea, how, for example, a sailboat can move against the wind, or why is it colder at the South Pole than at the North (how can you talk about the complex without understanding the simple?).

The irrationality of people is such that they are more willing to believe that they know the answers to any unknowable questions and refuse to acknowledge the obviousness that in fact they do not see beyond their own nose (as a rule, there is only one argument here: "this is my faith!").