The Undoing Project: The Friendship that Changed Our Minds
By Michael Lewis
WW Norton (2016)
This is a book about the pioneers in the movement to improve human decision making with data collection and statistical methods. It focuses on the work of Daryl Morey, Amos Tversky and Daniel Kahneman. Morey was a math nerd who taught the sports world to rely on data collected on prospective players to facilitate their selection by professional teams. Morey first brought this process to public attention in the late eighties as the general manager of the Houston Rockets baseball team. This approach would quickly be adopted to predict performance in basketball, football, banking, political campaigns, movie production, and farming. At present, the use of data-based “algorithms”* extends to nearly every area of human endeavor.
Most of the book focuses on the unique 15-year partnership between Israeli psychologist Amos Tversky and Daniel Kahneman. As with most of his books, Lewis’s forte is unraveling the intricacy of interpersonal relationship. In The Undoing Project, his main focus is to explore the unique creative relationship behind their revolutionary work.
Tversky, a giant in the field of mathematical psychology, had a special interest in ascertaining how people make choices and decisions. In their initial work at Hebrew University, he and Kahneman assisted the Israeli Defense Force in identifying objective data to determine which troops would perform best in combat.
Their research probably had the most impact on so-called free market economics. Prior to their ground breaking work, most economists believed consumers had rational reasons for the purchases they make.
The work of Tversky and Kahneman also challenged the notion of “expert judgement” in many fields, eg the inability of psychologists/psychiatrists to predict dangerous in patients and of radiologists to accurately diagnose cancer from x-rays. In both areas, Tversky’s and Kahneman’s work facilitated the development of algorithms that were far more reliable than human experts, whose judgement is often impaired by boredom, fatigue, stress, and unconscious biases.
In addition to advising the National Basketball Association, NATO, and the US Secret Service on reducing the fallibility of human decision making, the pair also played a role in reducing pilot error on commercial aircraft.
Kahneman won the 2002 Nobel Prize in Economics. Tversky was nominated for the Nobel Prize in 2996 but died of melanoma before it could be awarded.
*By definition an “algorithm” is a set of mathematical instructions that are followed in precise order to solve a problem.