Extra: The Men Who Started a Thinking Revolution (Update)

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Apr 14, 2024

Michael Lewis, a journalist and author known for his captivating works like 'Moneyball', discusses the profound impact of psychologist Daniel Kahneman and his collaborator Amos Tversky on decision-making. He reflects on their groundbreaking research and how it reshaped our understanding of cognitive biases. The conversation explores the intersection between literature and psychology, revealing how their insights influence storytelling. Lewis also celebrates their unique personalities and collaborative spirit, highlighting their lasting legacy in behavioral economics.

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ANECDOTE

Michael Lewis's Adapted Works

Michael Lewis, author of Moneyball and The Big Short, discusses his work's surprising Hollywood adaptations.
He notes the increasing difficulty of adapting his complex, idea-driven books into films.

INSIGHT

The Missing 'Why' in Moneyball

Lewis realized a gap in Moneyball after a review pointed out he hadn't explored why scouts misvalued players.
This led him to discover the work of psychologists Daniel Kahneman and Amos Tversky.

ANECDOTE

The Anchoring Experiment

Kahneman and Tversky's anchoring experiment used a wheel of fortune to influence unrelated estimations.
This demonstrated how irrelevant information can sway judgments, a tactic used car salesmen and others employ.

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The Undoing Project

Michael Lewis

The Undoing Project by Michael Lewis chronicles the intellectual and personal relationship between Daniel Kahneman and Amos Tversky, two Israeli psychologists whose research fundamentally changed our understanding of human decision-making. Their studies, conducted from the late 1960s to the 1980s, exposed systematic errors in human judgment under uncertainty and laid the foundation for behavioral economics. The book delves into their extraordinary lives, including their careers in the Israeli military, and how their personal differences and eventual estrangement affected their work. Lewis's narrative makes complex psychological concepts accessible through engaging storytelling, highlighting the profound impact of Kahneman and Tversky's work on various fields, including economics, medicine, and government regulation[3][4][5].

Thinking, Fast and Slow

Daniel Kahneman

In this book, Daniel Kahneman takes readers on a tour of the mind, explaining how the two systems of thought shape our judgments and decisions. System 1 is fast, automatic, and emotional, while System 2 is slower, effortful, and logical. Kahneman discusses the impact of cognitive biases, the difficulties of predicting future happiness, and the effects of overconfidence on corporate strategies. He offers practical insights into how to guard against mental glitches and how to benefit from slow thinking in both personal and business life. The book also explores the distinction between the 'experiencing self' and the 'remembering self' and their roles in our perception of happiness.

The Big Short: Inside the Doomsday Machine

Michael Lewis

The book tells the story of the 2007-08 financial crisis through the lens of a small group of eccentric and brilliant individuals who predicted and profited from the collapse of the housing market. It highlights the complexities of financial instruments like credit default swaps and collateralized debt obligations, and how these contributed to the crisis. Lewis's narrative is character-driven, filled with dark humor and indignation, and it exposes the systemic failures and incentives that led to the disaster.

Moneyball

The Art of Winning an Unfair Game

Michael Lewis

The book tells the story of the Oakland Athletics' 2002 season, where General Manager Billy Beane and his assistant Paul DePodesta used advanced statistical analysis, known as sabermetrics, to assemble a competitive team despite a limited budget. The approach, pioneered by Bill James, focused on metrics such as on-base percentage and slugging percentage rather than traditional measures like batting average and runs batted in. This data-driven strategy allowed the Athletics to compete with teams having much larger payrolls, like the New York Yankees, and achieve significant success, including a 20-game winning streak and a playoff appearance[2][3][5].