The Undoing Project: A Friendship That Changed Our Minds by Michael Lewis

Summary

A great story about the partnership of Amos Tversky and Daniel Kahneman, pioneers in the field of the decision making and judgment. Their work reshaped our understanding of the human cognitive process, challenging the rational actor models and highlighting important cognitive shortcoming that influence our attitudes, beliefs, and actions.

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Key Takeaways

Context matters

“By changing the context in which two things are compared, you submerge certain features and force others to the surface.”

Context matters. If you compare an apple to an orange, you will see it differently than if you compare it to a tree. The context in which we compare things informs how we understand and evaluate those things. This principle is essential if you want to master the art of influence.

The power of grouping

“Things are grouped together for a reason, but, once they are grouped, their grouping causes them to seem more like each other than they otherwise would. That is, the mere act of classification reinforces stereotypes. If you want to weaken some stereotype, eliminate the classification.”

When we group things together, the things we have grouped seem more similar than they otherwise would have. Because of this, we can inadvertently reinforce or weaken stereotype by the nature of how we classify things.

Wait a day

“Amos liked to say that if you are asked to do anything—go to a party, give a speech, lift a finger—you should never answer right away, even if you are sure that you want to do it. Wait a day, Amos said, and you’ll be amazed how many of those invitations you would have accepted yesterday you’ll refuse after you have had a day to think it over.”

If you are presented with an invitation to do something, wait 24 hours to make a decision. Even when you are certain in the moment that you want to do it, the test of time will reveal your true feelings, and the result may be surprising.

On predictions

“A prediction is a judgment that involves uncertainty.”

Predictions are not accurate statements of the world. They are judgments that involve imperfect information and uncertainty. Once you consciously recognize this fact, you may not hold so closely to the predictions you and others make.

Regression to the mean

“Man’s inability to see the power of regression to the mean leaves him blind to the nature of the world around him.”

Regression to the mean fools us everyday. If a basketball player makes 10 shots in a row, or if we absolutely crush a presentation at work, we expect this exceptional performance to continue. However, in doing so, we fail to recognize that performance at the extremes (i.e., unusually good or bad relative to the average) will regress towards the average.

Losses loom larger than gains

“It reflects a general property of the human organism as a pleasure machine. For most people, the happiness involved in receiving a desirable object is smaller than the unhappiness involved in losing the same object.”

Loss aversion is the general tendency for humans to prefer avoiding losses to acquiring equivalent gains. In other words, it hurts more to lose $100 than it feels good to gain $100. Being aware of this principle can help you better understand your reactions to particular outcomes and your willingness to pursue or not pursue certain situations.

Comparisons matter

“‘If both my neighbor in the next cage and I get a cucumber for doing a great job, that’s great. But if he gets a banana and I get a cucumber, I will throw the cucumber at the experimenter’s face.’ The moment one ape got a banana, it became the ape next door’s reference point.”

How we view rewards and punishments depends on the rewards and punishments handed to the people next to us. While we may be grateful with a 5% raise if our colleague also gets a 5% raise, we might be deeply unhappy with a 5% raise if our colleague receives a 10% raise. The comparison between the outcomes in our lives and the outcomes in other people’s lives is a big factor in determining our satisfaction with a particular outcome.

Life is a book

“He said, ‘Life is a book. The fact that it was a short book doesn’t mean it wasn’t a good book. It was a very good book.’”

Although Amos Tversky died young, he felt that he had lived a good life. HIs life may have been short, but it was still a good life. His noble reaction to living a short life has encouraged me to pursue the things that matter and not delay them to a future date.

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