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How cognitive illusions blind us to reason

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Fun arti­cle by Daniel Kah­ne­man based on his new book,Think­ing, Fast and Slow.

How cog­ni­tive illu­sions blind us to rea­son (The Guardian):

Why do Wall Street traders have such faith in their pow­ers of pre­dic­tion, when their suc­cess is large­ly down to chance? Daniel Kah­ne­man explains. 

- “Look­ing back, the most strik­ing part of the sto­ry is that our knowl­edge of the gen­er­al rule that we could not pre­dict had no effect on our con­fi­dence in indi­vid­ual cas­es. We were reluc­tant to infer the par­tic­u­lar from the gen­er­al. Sub­jec­tive con­fi­dence in a judg­ment is not a rea­soned eval­u­a­tion of the prob­a­bil­i­ty that this judg­ment is cor­rect. Con­fi­dence is a feel­ing, which reflects the coher­ence of the infor­ma­tion and the cog­ni­tive ease of pro­cess­ing it. It is wise to take admis­sions of uncer­tain­ty seri­ous­ly, but dec­la­ra­tions of high con­fi­dence main­ly tell you that an indi­vid­ual has con­struct­ed a coher­ent sto­ry in his mind, not nec­es­sar­i­ly that the sto­ry is true.” …

- “The sub­jec­tive expe­ri­ence of traders is that they are mak­ing sen­si­ble edu­cat­ed guess­es in a sit­u­a­tion of great uncer­tain­ty. In high­ly effi­cient mar­kets, how­ev­er, edu­cat­ed guess­es are no more accu­rate than blind guesses.”

Relat­ed articles:

On Being Certain: Believing You Are Right Even When You’re Not

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Where does our “Feel­ing of Know­ing” come from? Have you ever felt cer­tain that you knew an answer even though you could­n’t think of it right off? Where does that “feel­ing of know­ing” come from? The answer to this ques­tion is the focus of neu­rol­o­gist Robert Bur­ton’s new book On Being Cer­tain: Believ­ing You Are Right Even When You’re Not.

I recent­ly reviewed Dr. Bur­ton’s book on the Brain Sci­ence Pod­cast and last week I had the oppor­tu­ni­ty to inter­view him for the show. He explained that one of the ori­gins for his book was his expe­ri­ence with patients with con­di­tions like Cotard’s syn­drome (where the patient thinks he is dead or does not exist). What Dr. Bur­ton calls the “feel­ing of know­ing” is so strong that peo­ple con­sis­tent­ly trust it even when their beliefs con­tra­dict the evi­dence. At first it might seem sur­pris­ing that this feel­ing is gen­er­at­ed at an uncon­scious lev­el in our brain, yet the same sort of pro­cess­ing cre­ates the world we see and hear. It is well-known that what we see is not what enters our eyes, but [Read more…] about On Being Cer­tain: Believ­ing You Are Right Even When You’re Not