![]() It’s what gamers call RNG or random number generator - a fun shorthand way to describe all the randomness in a game’s world, randomness that’s mirrored in ours. Noise is about the fact that while we have a lot of cognitive biases, in many cases the world is random. ![]() The first book of Dune depicts an omniscient, omnipotent figure becoming a leader, and the second book of Dune is about how that’s not a good system of governance for anyone involved. It’s what the second book of Dune ( Dune Messiah) was to the first book of Dune. His most well-known book, Thinking, Fast and Slow, as well as his seminal work in the field, explore these ideas and how we can recognize our biases and go from there. Much of Daniel Kahneman’s work, along with that of Amos Tversky and the start of behavioral economics, is centered around the idea of cognitive bias - systemic errors in our thinking that change our judgment in a specific way, usually caused by incorrect applications of heuristics. The central theme of this book is super cool for anyone who has learned about bias. Can you tell us a little bit about this book? Your first recommendation for us is Noise by Daniel Kahneman, Olivier Sibony, and Cass R. It’s not a question of whether we regret a decision in retrospect it’s a question of whether, knowing what we knew then, it was a good decision or a bad one.īy Cass Sunstein, Daniel Kahneman & Olivier Sibony Read It’s to make the best decision possible at any given moment, based on what we know at that time, how we know it, and why we know it. Therefore, our goal is not to make the perfect decision. ![]() The combination of these factors impedes our ability to make the perfect decision. That’s even before we consider the effects of bias, the impact of noise, the fact that we don’t control our destiny, or the possibility that all our basic assumptions are wrong. We have an idea about how the current interest rates affect our business, but we may have no idea how different the business should look if the interest rates were to rise by an additional five or six per cent.Īll of this makes decision-making difficult. What may have been a great investment decision in 2021 may make no sense in 2023, simply because of fluctuating interest rates. We don’t know what we don’t know.Īdditionally, things constantly change. That’s not how the world works! In the real world, everything operates with imperfect information. In the academic sphere, we talk about how we’re breaking out the decision: we assume no variance in the system, and then we say, ‘What’s one plus one?’ We say it’s two, and we’re all happy with that. Foreign Policy & International Relationsĭecision-making is even more difficult than people realize. ![]()
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