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Noise | A Flaw in Human Judgment | Daniel Kahneman, Cass R. Sunstein and Olivier Sibony | Summary

Feb 15, 2022

In this podcast, Daniel Kahneman, Cass R. Sunstein, and Olivier Sibony discuss the detrimental effects of noise in human judgment in various fields such as medicine, law, and economic forecasting. They highlight the importance of reducing bias and noise for better decision-making. They explore the challenges of noise in evaluating CEO candidates and the complexity of human judgment in group decision-making processes. The hosts also discuss a study on noise in group rankings and provide principles for minimizing noise in decision-making.

17:15

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Episode guests

Olivier Sibony

Daniel Kahneman

Cass R. Sunstein

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Episode notes

Podcast summary created with Snipd AI

Quick takeaways

Noise in judgments can lead to inconsistent decisions in various fields such as medicine, law, and hiring.

Noise is more prevalent and problematic than bias in professional judgments, contributing to overall error calculations and damaging credibility and trust in systems.

Deep dives

The Impact of Noise on Judgments

Noise in judgments is often overlooked but can cause significant problems. It can lead to inconsistent decisions in various fields such as medicine, law, and hiring. Noise can be both wanted and unwanted, but the unwanted noise is more prevalent and costly. For example, judges giving different sentences for the same crime is an example of unwanted noise. To reduce noise, organizations can perform noise audits and follow six principles of decision hygiene.

Introduction

3min

Understanding Noise in Human Judgment

6min

Challenges of Noise in Judgments for Evaluating CEO Candidates

2min

The Complexity of Human Judgment and the Amplification of Noise in Group Decision Making

3min

Exploring Noise in Group Rankings and Strategies to Minimize It

3min

Imagine that two doctors in the same city give different diagnoses to identical patients—or that two judges in the same courthouse give markedly different sentences to people who have committed the same crime. Suppose that different interviewers at the same firm make different decisions about indistinguishable job applicants—or that when a company is handling customer complaints, the resolution depends on who happens to answer the phone. Now imagine that the same doctor, the same judge, the same interviewer, or the same customer service agent makes different decisions depending on whether it is morning or afternoon, or Monday rather than Wednesday. These are examples of noise: variability in judgments that should be identical.

In Noise, Daniel Kahneman, Olivier Sibony, and Cass R. Sunstein show the detrimental effects of noise in many fields, including medicine, law, economic forecasting, forensic science, bail, child protection, strategy, performance reviews, and personnel selection. Wherever there is judgment, there is noise. Yet, most of the time, individuals and organizations alike are unaware of it. They neglect noise. With a few simple remedies, people can reduce both noise and bias, and so make far better decisions.

Packed with original ideas, and offering the same kinds of research-based insights that made Thinking, Fast and Slow and Nudge groundbreaking New York Times bestsellers, Noise explains how and why humans are so susceptible to noise in judgment—and what we can do about it.

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