The Undoing Project
362 pp. W.W Norton & Co, 2017
362 pages, $28.95
In the early 1940s, young Danny Kahneman was walking the streets of Paris after curfew. He had gone to school early so he could take off his sweater before his classmates could see the yellow Star of David he was forced to wear by Nazi occupiers. On the way home Danny was approached by a German soldier wearing the black uniform of the feared SS. Danny was overwhelmed by terror when the soldier called him over and suddenly picked him up. Danny feared the soldier would spot the yellow star under the sweater he was wearing inside-out and arrest him— instead, the soldier hugged Danny, shared a photo of his son, gave Danny some money and sent him on his way.
That event, along with other experiences as a Jew in Nazi-occupied France, left Danny questioning the most basic aspects of human thought and perception. How could a soldier trained to find and exterminate Jews not recognize that Danny was Jewish? Why would an anti-Semitic industrialist save Danny’s family just because Danny’s father was a skilled chemist? Why did some Jews flee and others remain and be slaughtered?
In prior books such as Moneyball and The Big Short, Michael Lewis demonstrated his ability to help readers understand complex events and concepts by weaving concise and understandable explanations with compelling stories about fascinating individuals. In The Undoing Project, Lewis shows how two Jewish refugees established a Nobel Prize-winning theory of human thought that has changed innumerable aspects of our lives—from baseball to medicine to management.
The Undoing Project begins in the world of Moneyball—the world of professional sports, where grizzled scouts and longtime coaches relied on their observations and instincts to pick recruits. This time however, the sport is basketball and the challenge is making multi-million dollar decisions as to who should play professional basketball and who should not. Lewis introduces Daryl Morey, the “Nerd King” general manager of the Houston Rockets who is trying to replace the traditional reliance on intuition with decisions based on data analysis.
Morey notices patterns in bad draft picks. For example, when Stephen Curry took the NBA by storm, teams began loading up on light skinned black basketball players. When some of these picks failed to perform, Morey realized that the players’ resemblance to Stephen Curry misled even the most seasoned professionals. With top tier prospects commanding multi-million dollar salaries before playing their first professional game, a more reliable, analytical approach had to be found. Morey turned to data-based sports analytics, similar to those used in Moneyball to neutralize known sources of judgment errors such as Endowment Bias, Hindsight Bias, and the more well-known Confirmation Bias—all of which Lewis clearly explains.
The remainder and lion’s share of The Undoing Game is actually a prequel, as Lewis explores the origins and underpinnings of Moneyball analytics. Lewis takes readers to the source—the symbiotic, ground-breaking collaboration between Danny Kahneman and Amos Tversky, two refugees from totalitarianism who met in Israel and together taught us how our minds really work.
After Danny’s family escaped to Israel, his curiosity about human behavior led him to study psychology—he often said he had to either be a psychologist or a rabbi like his grandfather. His exposure to Gestalt psychology and its emphasis on errors of perception added to his interest in errors in human decision making. Danny became a “connoisseur of human error.”
In the early days of the State of Israel, the military recognized the value of using psychological techniques to sort through recruits and identify those who could lead and those who should follow. The young nation desperately needed to know how its recruits would perform. Who could handle the terror and confinement of being in a tank crew? Who would rally his comrades and who would panic? A small nation surrounded by larger hostile nations could ill afford to waste its human and material resources.
Soon after joining the Israeli Army, Danny began to develop screening questionnaires. Always the outsider in a country full of refugees looking for a place to fit in, Danny questioned every assumption. He fashioned questionnaires designed to ferret out essential character traits. The trick was to determine which data points best predicted positive or negative characteristics, rather than relying on fallible human judgment. The resulting Kahneman Scores quickly and significantly reduced the number of officer candidates that washed out.
Through his work, Danny began expanding the emerging study of heuristics— simple, efficient rules of thumb which people use to quickly form judgments and make decisions. While the utility theory followed by economists of the time posited that people are perfectly rational and make logical decisions weighing the relative benefits and risks of available choices, Danny argued that heuristics often led them astray. The very mental shortcuts that we rely on to rapidly assess the world and make choices can sometimes also mislead.
Lewis eventually introduces Amos Tversky whose parents fled Russian anti-Semitism in the early 1920’s and joined the Zionist pioneers. Amos, a Sabra, and also the grandson of a rabbi, was hyper-kinetic and bold. And while he had the slightest of lisps, he was a wonderful raconteur whose charisma made him a party favorite. His brilliance was obvious and people unconsciously competed for his attention.
Actively involved in the Six Day War, both Danny and Amos were shocked by warfare’s gruesome reality. Both were fascinated by how scholarly Jews had been transformed into Spartans. Amos became a paratrooper and was recognized as a hero in a country full of heroes, receiving the highest award for bravery when injured saving a soldier’s life during a training exercise.
Danny and Amos meet in academia and combine their divergent personalities and intellects in an all-out effort to unravel the mind’s mysteries. Danny was the introspective professor whose “defining emotion is doubt” and who believed that “confidence was a sign of fraudulence.” His wartime childhood trained him to question everything…even himself. Amos, the swaggering paratrooper, had the confidence and charm to take on established beliefs. He also possessed world-class statistical skills. The strength of their relationship provided a safe environment in which Danny could explore his doubts about his own thought process. Together they worked as if they were a single mind committed to discovering the truth. In fact, they often could not remember which of them first came up with an insight and generally flipped a coin to determine which name would go first when they collaborated on a research paper.
Amos and Danny would lock themselves in a room and create scenarios to demonstrate the role of heuristics and the errors that could result. Much of The Undoing Project is devoted to examples of these scenarios and exploration of the errors in judgment they reveal. In one very simple example, one group was given five seconds to guess the product of the following:
8 X 7 X 6 X 5 X 4 X 3 X 2 X 1
While another group had five seconds to multiply:
1 X 2 X 3 X 4 X 5 X 6 X 7 X 8
The first group’s median guess was 2,250 while the second group’s median estimate was 512 (the correct answer is 40,320). Clearly the fact that the first set of numbers started out with higher values skewed the estimates.
Danny and Amos were overheard laughing day after day as they constructed questions and scenarios designed to tease out the sources of human miss-judgment. Long before our current interest in artificial intelligence, they were, in effect, studying “natural stupidity” to learn how to improve human decision-making. They realized that many decisions were too complex to be made by algorithms without human input, so they chose to learn where heuristic techniques and tendencies mislead experts to improve individual and group decision-making.
The Undoing Game outlines and analyzes various heuristics as demonstrated by the men’s decision inducing scenarios. This is a strength or a weakness of the book, depending on your personal nerd factor. Many scenarios and choices will surprise and enlighten you. Several made me laugh out loud. A couple made my head hurt. All in all, however, Lewis does an excellent job selecting examples that help the average reader get a good sense of the utility and weaknesses of the heuristic tools we use every day to try to make sense of the world.
Ever the practical Israelis, Amos and Danny worked to apply heuristic theory to real world decision-making. Insights gained from their research have improved decision making by physicians, fighter pilots, sports teams, corporations, and investors. Ultimately, their theories were embraced by economists, and in 2002, Danny Kahneman, the psychologist, was awarded a Nobel Prize in Economics. Readers will have to read The Undoing Project to learn why Amos Tversky did not share in the award.
Lewis understands that one of the most enjoyable ways to study history is through a well-written biography. The Undoing Game is an entertaining and enlightening introduction to heuristic theory. However, this dual biography of Danny Kahneman and Amos Tversky is engaging on a personal level as well, for theirs was a love affair of the mind, replete with shared triumphs, competition, and jealousy. They are quintessential Jewish refugee heroes, shaped by discrimination, dislocation, and war, and who questioned accepted truths and brought society critical insights into the workings of the human mind.
– Skip Sacks
—Skip Sacks is Virginia State Counsel for Stewart Title Guaranty Company.