The podcast emphasizes how Daniel Kahneman and Amos Tversky’s work laid the foundation for understanding human decision-making under uncertainty.
It introduces the premortem technique as a valuable approach to foresee potential failures and encourage open discussions in decision-making processes.
Deep dives
The Relauch of Risk Gaming and Legacy of Decision Science
Risk Gaming has been relaunched with a new newsletter that simplifies subscriptions and engages a growing audience. This episode revisits the impactful work of Danny Kahneman and Amos Tversky, who were pioneers in decision science, shedding light on how humans make judgements under uncertainty. Kahneman, who received the Nobel Prize for his contributions to the field, recently made the profound decision to choose assisted suicide, illustrating the gravity of decision-making even at the end of life. This poignant moment underlines the insights that accompany the exploration of human decisions in uncertain scenarios.
The Concept of Premortems in Decision-Making
The idea of a premortem is introduced as a vital tool to anticipate potential failures before making a decision. This process involves imagining a future scenario where a decision has gone wrong, allowing decision-makers to identify possible downsides and adjust plans accordingly. By documenting reasons for potential failure, the premortem method encourages critical thinking and helps overcome groupthink, which often suppresses doubts in the face of collective decision-making. Although not universally replicable, the effectiveness of premortems lies primarily in fostering open discussion and surfacing dissenting opinions to strengthen decision outcomes.
Challenges in Changing Established Beliefs
Changing one’s mind, particularly on significant beliefs, proves to be a complex challenge tied to personal identity and social connections. It is suggested that cognitive dissonance plays a crucial role, where actions can influence beliefs just as much as beliefs drive actions, making individuals resistant to changing core convictions. The conversation highlights that modifying decision-making processes may require setting specific conditions in advance for when and how one would adapt their beliefs. The notion of framing decisions based on potential future outcomes can help facilitate a willingness to reassess and reconsider one's choices, creating a more flexible approach to personal and organizational decision-making.
This is a big week for us, since we officially re-launched the newsletter on our gorgeous new web address Riskgaming.com, which we are now hosting on Substack. You’ll find all of our archives there, as well as much easier tools to manage your subscription to our Dispatches, Event Announcements, our edited Interviews and after almost a decade, Lux Recommends.We’ve had thousands of new people subscribe and follow us over the past two years, and so I figured this re-launch week was also an opportune time to recirculate one of my absolute favorite episodes of the podcast from three years ago in May 2022. Daniel Kahneman, alongside his long-time research partner Amos Tversky, pioneered the field now broadly known as decision science, exploring the economics, incentives, tradeoffs and psychologies of humans making judgments in moments of uncertainty. Tversky would pass away in 1996, and Kahneman would win the 2002 Nobel Prize in Economics for much of the work they partnered together on.
In the months after our recording, Kahneman made an extraordinary decision under uncertainty of his own. Concerned about his future risk for dementia, he decided to travel to Switzerland at the age of 90 to pass away through assisted suicide. It was an astonishing final decision by the master of decision-making, and he conducted his final act in secrecy before it was revealed in The Wall Street Journal in a column by Jason Zweig last month.I had the opportunity to host Kahneman alongside World Series of Poker champion Annie Duke, legendary investment strategist Michael Maubaussin of Morgan Stanley’s Counterpoint Global and our own founding managing partner Josh Wolfe for a lunch debate on the current research and trends underpinning risk, bias and decision-making. We merged our four part original series down to two parts. This week, we cover the ideas of pre-mortem as well as dissonance reduction and what circumstances lead people to changing their minds at all.
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