Dan Kahneman Puzzles With Us
I have never tried very hard, but I am in a way surprised by the ambivalence about it that you encounter in organizations. My sense is that by and large there isn’t a huge wish to improve decision-making – there is a lot of talk about doing so, but it is a topic that is considered dangerous by the people in the organization and by the leadership of the organization. I’ll give you a couple of examples. I taught a seminar to the top executives of a very large corporation that I cannot name and asked them, would you invest one percent of your annual profits into improving your decision-making? They looked at me as if I was crazy; it was too much.
That is from an Edge interview. We see a related disinterest in better decisions via decision markets. Hat Tip Hamish Barney.
Robin Hanson said, “Constant, top execs couldeasily want other execs at their firm to make betterdecisions.”
But, Robin, the other execs are nowfollowing the very successful directions ofthe top executives. The top executives willfear the company will become lesssuccessful if any change leads the otherexecs to stop following their directions.
John
Kahneman wonders that businesses do not use hismethods to improve their decision making.
Thenthere is this at the link:
'Paul Krugman, in his New York Times column,"Quagmire Of The Vanities" (January 8, 2007), asksif the proponents of the "surge" in Iraq are cynicalor delusional. He presents Kahneman's view that"the administration's unwillingness to face reality inIraq reflects a basic human aversion to cuttingone's losses—the same instinct that makesgamblers stay at the table, hoping to break even."
If Kahneman is so certain about what is unknowablewhy would anyone believe his methods will improvetheir decision making? If comment like this creepinto his discussions, he is likely to become as easyto dismiss as Rumsfeld after his comments abouttheir having been no guerrilla warfare againstAmerican troops in Iraq.
Now, Kahneman's defenders will say that Rumsfeldwas demonstrably wrong and Kahneman may yet beproven correct. And they would be right to do thatif the question were the accuracy of Rumsfeld andKahneman. But making absolutist statements aboutwhat might (or might not) come to pass, is unlikelyto impress people who must make practicaldecisions.
John