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  • >> John Boyd: All right. I'm John Boyd. It is my great pleasure to introduce Professor

  • Kahneman today. And I just want to give you a brief background on his outstanding career.

  • He started in 1954 received his bachelors in experimental psychology and mathematics

  • from the Hebrew University in Jerusalem. In 1961, he was awarded his Ph.D. from University

  • of California Berkeley right across the bay in Experimental Psychology. In 1979, he and

  • his coauthor Amos Tversky published their seminal paper on Prospect Theory which started

  • to change the way people reframed the argument around gains, losses, and decision-making

  • under uncertainty. Several years later in 2002, Professor Kahneman was awarded the Nobel

  • Prize largely on the work of Prospect Theory of. And Nobel Prize isn't always impressive;

  • his perhaps more so because there isn't a Nobel Prize in psychology. He had to win his

  • Nobel Prize in economics. And as far as I know, there's only one other person, one other

  • psychologist, who's won a Nobel Prize and that's Ivan Pavlov. He may be a physiologist,

  • we could argue about that. Years later, in 2007, Psychologist tried to reclaim Professor

  • Kahneman as one of their own when the American Psychological Association awarded him Lifetime

  • Distinguished Contribution Award. And today he is a Senior Scholar at the Woodrow Wilson

  • School of Public and International Affairs at Princeton University and he's here to talk

  • about his new book Thinking Fast and Slow. Now Google's mission which we all know is

  • to take the world's information and to make it more useful and universally accessible.

  • And all information, all knowledge, is important, but I think some again is more important than

  • others. Because the information that he'll present today I think it's very personal;

  • it's about each of us. And, if you'll listen carefully it's going to change the way you

  • think about yourself and the world around you. So please join me in welcoming Professor

  • Kahneman to Google.

  • [Applause]

  • >> Kahneman: Thank you. Well, I think intuition has been discussed a lot in recent years and

  • I'll be talking about intuition. There are two camps in this discussion naturally there

  • is the pro and the con. And of course, many people here will have read Malcolm Gladwell

  • Blink which although it's not unconditional defense of intuition, it certainly gave people

  • the impression that sometimes we magically know things without knowing why we know them.

  • Within the discipline of psychology and the decision making there is a group and it is

  • headed by a very interesting figure called Gary Kline who wrote a book that I recommend.

  • Its Sources of Power is one of his books that I would recommend the most warmly. And they

  • are great believers in expert intuition. The other side there are skeptics about intuition

  • in general and including expert intuition. And I have long been counted as one of the

  • skeptics because my early work with Amos Tversky was about intuitive errors and flaws and biases

  • of intuitive thinking. Today you find that discussion in many places and for example

  • in medicine among the popular writers; two writers both of whom write for the New Yorker,

  • Jerome Groopman and Atul Gawande. They clearly differ. Atul Gawande is in favor of formal

  • systems, very skeptical about human judgment and wanting to prove all the time and Jerome

  • Groopman being in fact, although he doesn't quite admit he really likes good old fashioned

  • medical intuition. Of course he likes physicians well-educated. But he doesn't like formal

  • system and the issue in medicine is "What are the role of evidence based medicine and

  • how do you allocate that with the function of intuition?" The background actually, part of the background for what

  • I'll talk about today is a strange collaboration in which I engaged with about eight years

  • with Gary Klein, whom I mentioned. He is a guru of a group of people who really, I wouldn't

  • say they despise what I do but they certainly don't like what I do because they think that

  • the emphasis and biases of judgment has drawn an unjustly unfavorable picture of the human

  • mind. And by and large I am inclined to agree. Seven or eight years ago I invited him and

  • we worked together for a number of years trying to figure out where is the boundary? Where

  • is intuition marvelous and where is it flawed? And I think we can tell. And we wrote a paper

  • at the end of six or seven years with a lot of vicissitudes that we went through since

  • we basically don't agree. We wrote a paper the title of which was A Failure to Disagree,

  • because on the substance I think we know and we both agree where you can trust intuition

  • and where you cannot. Emotionally we haven't changed. He still hates the biases and doesn't

  • think that errors of experts are very funny and I think that errors of experts are quite

  • funny [laughter] so that's a difference right there. There are two modes of thinking that

  • all of us are familiar with. And there is one mode, one way for thoughts that come to

  • mind and listen to this. You know about this lady that she's I think adjust as quickly

  • as you know her hair is dark. And it's interesting to dwell a bit about this. It is this is not

  • something that the judgment that she is angry, the impression that she is angry. Doesn't

  • feel like something you did. It feels like something that happens. It happens to me.

  • We have the basic experience is a passive experience in those judgments. And that is

  • true of perception, when we see the world we don't decide to see it. It is true of impression.

  • And it is true in general what we call intuitive thinking. It just happens. It comes from somewhere.

  • And we are not the author of it. Now, there is another way that thoughts come to mind

  • and here I suppose essentially nothing came to your mind, but the answer is 408. To produce

  • the 408, requires a completely different kind of operation. You have to retrieve the program

  • that you learned in school. The program consists of steps. You have to go through the steps.

  • You've got to pay attention successively to partial products and so on. And keep things

  • in mind and keep the whole program in mind. This is how it works. This is something that

  • you do. It is not something that happens to you. And there are many indications that this

  • is how it works. One is that Physiology indicates and this is how it works: pupil dilates. This

  • is something that I studies many, many years ago that people really on a program like that

  • if you're on a problem like that if you're going to do it in your head, your pupil will

  • dilate. The area will increase by about 50% as soon as you engage in that. And it will

  • stay dilated as long as you're working and it will sort of collapse back to normal size

  • either when you quit or when you find the answer. So this is another way thoughts come

  • to mind. And this is definitely not the intuitive way. Here we are we feel a sense of urgency.

  • We feel something deliberate is happening and a very important aspect of it this is

  • effortful and what psychologists mean by effort is basically, if you want the quick introduction

  • to what effort is, this is something you cannot do while making a left turn into traffic.

  • You cannot do it and you shouldn't try. And the reason is that there is limited capacity

  • to exert effort. And if you are engaged that capacity or those resources at one task less

  • is available for another task. Now, there is another function of System 2. And here

  • I'm going to tell you a riddle. Most of you are familiar with it. A bat and a ball together

  • costs 1.10. The bat costs more than the ball. Of course how much does the ball cost? How

  • many people know this riddle by the way? Oh, okay. So it's still usable. The point about

  • this riddle is that the number came to your mind. And the number is ten cents. And everybody

  • just, I think. Maybe here they're exception, very few exceptions. People confess that the

  • number ten cents immediately came to mind. Now, it's wrong. Ten cents and dollar 10 is

  • a dollar 20. The solution is five cents. What is interesting here is that at Princeton,

  • at MIT at Harvard and I don't know about Stanford or CalTech about 50% of students asked this

  • question of undergraduates say ten cents. And we learn something very interesting when

  • somebody says ten cents. We learn that they didn't check because if they had checked,

  • they wouldn't say ten cents. So, there is a sense of confidence that people have that

  • these people in particular have and it brings us to another function of what I'll call System

  • 2. System 1 is the intuitive one; they perform those automatic and activities and System

  • 2 is the effortful one the one that the deliberate one. And the reason that I classify this as

  • System 2 operation is that self-control and controlling your attention and deliberate

  • exertion of effort are impaired when by other activities. So, if for example, a trivial

  • example, if somebody is asked to retain seven digits in their head and you then give them

  • a choice between chocolate cake, sinful chocolate cake and virtuous fruit salad they're more

  • likely to choose the chocolate cake than they would if they didn't have seven digits in

  • their head. It takes effort to control your impulses even such mild impulses as a preference

  • for chocolate cake. So you should be aware of that difference between System 1 operations, the automatic ones and

  • System 2 operations, the deliberate ones, it comes very clearly when in driving. So

  • driving is a skill. And any skilled activity measure of skill is that things begin to happen

  • automatically. So you can drive and conduct a conversation. You cannot make a left turn

  • into traffic, but by and large, we can drive and talk. So driving is largely automatic.

  • Braking, when there is any sign of danger, braking is completely automatic. That is,

  • you can notice while you're braking, but you first respond so that the response is immediate,

  • it is fully automatic. Now, in some places, not here where people drive in snow or ice,

  • they learn about skids. And then, occasionally, you'll find yourself as a driver in a skid.

  • And then System 2 will be mobilized because in a skid you're not supposed to do anything

  • that comes naturally to you. You shouldn't brake and you shouldn't steer away from the

  • skid. You should leave the brakes alone and steer into the skid, completely non-intuitive.

  • Now, when people have a lot of practice with skids that too becomes automatic. So one thing

  • that we can tell about System 1 and System 2 those two types of operations, is some of

  • the basic innate operations, functions that we have such as having emotional reactions

  • to things, all this is System 1. We don't choose to do it. It just happens to us. But

  • also System 1 is where skill is. That is when we get to be skilled at something it becomes

  • automatic and it demands your resources and we get to be very good at it. Now, the issue

  • of intuition and here I'm not sure, but I suspect that Malcolm Gladwell really did us

  • a disservice by giving us a sense there is magic to intuition. There really is no magic

  • at all and we should understand how it works. Intuition and Herbert Simon who was Psychologist

  • then and economist and a political scientist Nobel Laureate, Herbert Simon gave a very

  • good definition about what intuition is. It is simply recognition. There is really no

  • difference between the physician recognizing a disease, you know, a particular disease

  • from a facial expression or something and a little child learning, pointing to something

  • and saying doggie. The little child has no idea what the clues are but he just said.

  • He just knows this is dog without knowing why he knows. And once you think about it

  • this way, this really demystifies intuition to a very considerable extent. And it also

  • leads you to sort of a solution to the problem Gary Klein and I were trying to solve. When

  • can you trust intuition and when can't you? And then it becomes an issue of is the world

  • regular enough so that you can learn to recognize things? Or and then did that particular individual

  • have an opportunity to learn the regularities of the world? And so, the world of chess players

  • is highly regular. And statistically, the world of poker players is very regular. So

  • there is an element of chance, but there are rules and the mind is so set that if there

  • are rules in the environment and we're exposed to them for a long time, and we get immediate

  • feedback on what is right and wrong, or fairly immediate feedback, we would acquire those

  • rules. So all of us have expert intuition even if we are not physicians and we're not

  • master chess players. I recognize my wife's mood from one word on the telephone. You know,

  • most of you can do that. There's people that you know very well. All of us recognize dangerous

  • driver on the next lane. And you know we get cues and we don't necessarily know what is

  • the cue but this person is driving erratically and could do something dangerous. And this

  • is a lot of reinforced practice and we're very good at that. We can learn about those,

  • there are differences. Among experts, among professionals, in the level of expertise that

  • they have and they depend in the level of intuitive expertise that they can develop.

  • So for example, compare anesthesiologists to radiologists. Anesthesiologists get very

  • good feedback, an immediate feedback whenever they do anything wrong. You know they have

  • those measurements in real time. Radiologists get really miserable feedback about whether

  • they're right or wrong. So you could expect an anesthesiologist to develop intuition much

  • more than you would expect radiologist to develop intuition. And so, that is part of

  • the answer about intuitive expertise. We don't need to disagree about that because we know

  • pretty much when intuitive expertise is likely to develop. And as I said, we also that means