Michael Lewis wrote The Undoing Project about two psychologists that changed the way we look at economics. (Photo: MichaelLewisWrites.com)
Our latest Freakonomics Radio episode is called “The Men Who Started a Thinking Revolution” (You can subscribe to the podcast at iTunes or elsewhere, get the RSS feed, or listen via the media player above.)
Starting in the late 1960s, the Israeli psychologists Amos Tversky and Danny Kahneman began to redefine how the human mind actually works. Michael Lewis’s new book The Undoing Project explains how the movement they started — now known as behavioral economics — has had such a profound effect on academia, governments, and society at large.
Below is a transcript of the episode, modified for your reading pleasure. For more information on the people and ideas in the episode, see the links at the bottom of this post. And you’ll find credits for the music in the episode noted within the transcript.
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A quick update on my new podcast, a game show called Tell Me Something I Don’t Know: We tape in front of a live audience and we’ve just announced a batch of new taping dates, in New York City, Boston, and Washington, D.C. On January 25, 26, and 27, we’ll be at Symphony Space, in New York City; on March 6 and 7, we’ll be at 6th and I, in Washington, D.C.; and on March 14, 15, and 16, we’ll be at the Wilbur Theater in Boston. So please come to the show! To get tickets — or if you want to be a contestant — just go to TMSIDK.com. If you haven’t heard the show yet, check it out on iTunes or wherever you get your podcasts. It’s already got more than 3 million listens — so what are you waiting for? Our first six episodes are already up, and lots more will be coming soon. Now, on to Freakonomics Radio.
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[MUSIC: Torches, “Fancy Meats” (from Heads Full of Rust)]
There aren’t many people in the world who write excellent books that also get turned into excellent films. Among them is this guy:
Michael LEWIS: My name is Michael Lewis, and I just think of myself as a writer.
What makes Michael Lewis’s rare feat even rarer is that his books wouldn’t seem at all conducive to the Hollywood treatment. Books like Moneyball
LEWIS: … which was about the way the Oakland A’s managed to function on a shoestring budget in Major League Baseball. And the book was in my mind really about the way the market for baseball players misvalued those players. That the then-experts in baseball, scouts, would make big mistakes in deciding who was a good player and who wasn’t a good player. And the A’s were exploiting this by using statistical analysis.
Brad PITT (Clip from Moneyball): The problem that we’re trying to solve is that there are rich teams and there are poor teams, then there’s 50 feet of crap — and then there’s us.
Or, an even more unlikely book to be turned into a film, The Big Short, Lewis’s book about how a housing bubble turned into a financial disaster.
Ryan GOSLING (Clip from The Big Short): With something called a Credit Default Swap. It’s like insurance on the bond and if it goes bust you can make ten-to-one—even twenty-to-one return.
LEWIS: I was astonished that anybody bothered to make Moneyball, much less The Big Short. And so my experience with the movie business is peculiar because what seems to happen is I write the books that are ever harder to turn into movies and they work ever harder to make them into movies.
His latest book may pose the biggest challenge yet. It’s called The Undoing Project. And it’s about a pair of academics, in a room alone, for a few decades, writing papers. They are a pair of Israeli psychologists named Amos Tversky and Danny Kahneman.
LEWIS: And one of their great discoveries is that people don’t make clean, clear choices between things. They make choices between descriptions of things.
No car chases. No doomsday scenarios. But it may still be movie material – for what Kahneman and Tversky did was nothing less than redefined how we humans think. Is that dramatic enough for you?
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Stephen J. DUBNER: So as a fellow writer, I want to ask you this: Reading your work is so pleasurable and easy, and I don’t mean that at all as a pejorative. I love the way you use language and words to talk about ideas. It’s an incredibly rare ability. But because it’s so pleasurable and easy to read, one might assume that the writing of these books is easy and perhaps pleasurable. Is it? Are you, Michael, any less tortured than the average writer?
LEWIS: Yes. It is pleasurable and easy. I hate to ruin your punchline, but actually what is hard for me is figuring out in the beginning what I want to say. I spend a lot of time gathering material and organizing the material before I sit down to write. I’d say three-quarters of the time is that. When the actual writing starts, it’s, for me, fun. It’s just fun. I mean, it’s fun and hard, but if it’s hard, it’s hard in a fun way. And people like my wife, who has walked in on me while I’m writing — I write with headphones on that just plays on a loop the same playlist that I’ve built for whatever book I’m writing. And I cease to hear anything in the world outside of what I’m doing. And apparently I’m sitting there laughing the whole time. And so I think basically what I’m doing is laughing at my own jokes, and I wasn’t even aware of that. But people like my kids and my wife say that, “You’re sitting at your desk laughing all the time.”
DUBNER: What’s on your playlist? What kind of stuff? Is it pop songs with lyrics or does it have to be more background stuff?
LEWIS: It’s pop songs with lyrics, but I cease to hear it. So the playlist for The Undoing Project included two versions of “Jesse’s Girl,” the Rick Springfield song. It’s Meghan Trainor, some of Adele’s new album, a Cat Stevens song, a Jim Croce song. And then they just… It’s kind of a random assortment stuff. What it all has in common is it kind of gets me up, and after I’ve listened to it a few times while writing, I have this Pavlovian response to it. So if you played like a Meghan Trainor song right now —
DUBNER: You’d just start typing.
LEWIS: Yeah, I’d look for a keyboard. That’s exactly right. So it’s a very odd kind of conditioning mechanism for me.
[MUSIC: Johnny Fiasco, “Downward Spiral” (from Metropolis)]
The Undoing Project began to germinate more than a decade ago. Lewis had just published Moneyball.
LEWIS: The heart of the story was that markets can really dramatically misvalue and misjudge people. And “If a baseball player could be misjudged, who couldn’t be?” kind of a thing. I thought it had kind of a universal message to it. What I didn’t do is ask why baseball scouts were misvaluing baseball players. And I didn’t really even notice that I hadn’t done that.
[MUSIC: Dot Dot Dot, “Can’t Let Go” (from Revel Revival)]
Lewis didn’t notice that until he read a review of Moneyball, published in The New Republic, by the economist Richard Thaler and the legal scholar Cass Sunstein.
LEWIS: And they said, and very sweetly, “This is a good story Michael Lewis has written, but he doesn’t seem to realize that these two guys named Danny Kahneman and Amos Tversky, psychologists, who’ve explored the biases in the human mind that lead people to make these sorts of misjudgments.” And that was the first time I’d ever heard of Danny Kahneman and Amos Tversky.
The fact that someone like Michael Lewis hadn’t even heard of Danny Kahneman and Amos Tversky tells you something about how obscure most academic research is. It also tells you something about Lewis.
LEWIS: I tend to have tunnel vision when I’m working on something and when Danny Kahneman got the Nobel Prize in economics in 2002, I was in an Oakland A’s dugout. And so I just wasn’t paying attention.
And it’s not like Kahneman and Tversky are exactly famous today, outside of some rather specific circles. But those circles have been expanding. And even if you don’t know Kahneman and Tversky by name, you are living through a revolution that their research made possible. A revolution as basic – and important – as understanding how people make decisions. Small decisions, like what to eat for lunch; and big ones, like whether to start a war. This revolution has many components and several names, the most prominent being “behavioral economics.” Which is an interesting name for a couple of reasons. No. 1, shouldn’t all economics be behavioral? And, no. 2, a lot of what people talk about when they talk about “behavioral economics” isn’t really economics at all. Which makes sense, since Kahneman and Tversky were psychologists and not economists. But economists, as Freakonomics Radio listeners know, can be a grabby breed. So they put their name on it: “behavioral economics.” Anyway: what is it? Loosely defined, it’s a way of blending empiricism and common sense to understand how people behave; it marries the economist’s belief that people respond to incentives with the psychologist’s understanding that people often don’t respond to incentives as rationally as economic theory might predict. It all starts with recognizing the gap between how we think we make decisions and how we actually make them. The foundation of this field, along with much of its nomenclature, came from the minds of just two men: Amos Tversky and Danny Kahneman. They had a particularly intense and intimate intellectual partnership:
LEWIS: Danny is a fertile source of ideas. So he’s really generative. And it’s not that Amos isn’t capable of being generative, but Danny is off-the-charts generative. He’s almost the poetic or novelistic mind in the room. And Amos is the diamond cutter. Amos is a pure analytical mind, who sees levels of abstraction in Danny’s ideas and generalizes them and formalizes them, so that they can be tested and expressed in a way that is academically respectable. But I think what they actually are doing is they’re laughing at stupid things people do. And Amos was asked once by somebody who said, “Does the work you and Danny do have any bearing on artificial intelligence?” And Amos said: “I’m much more interested in natural stupidity than I am in artificial intelligence.” And I think that they felt that it wasn’t a mocking spirit in which they operated, they were laughing also at themselves. At the sort of thing that they did that struck them as irrational, and they were mining that for gold. They have really a rattle bag of ideas that they end up trying to classify.
[MUSIC: Mark Ullrich, “Melting”]
Ideas that all revolved around a central realization: that when most of us make decisions, we essentially ignore the laws of probability and even logic. That we rely instead on primitive rules of thumb and shortcuts – or “heuristics,” in the language of academia – that are prone to error. One such heuristic that Kahneman and Tversky explored is known as “anchoring.”
LEWIS: Anchoring is the idea that your mind can be swayed by totally irrelevant information when you’re making a judgment. And they tested it by creating a wheel of fortune that had numbers 1 to 100 on it. You the subject, the lab rat, would spin the wheel of fortune and some number would come up – 20 or 47. And then they asked you to estimate what percentage of the countries in the United Nations came from Africa and what they showed is people who spun a higher number on the wheel of fortune placed a higher estimate there, and the people who spun a lower number on the wheel of fortune guessed lower. And they were anchored by just this number that had been mentioned before. The idea that you could have that kind of effect on an totally irrelevant judgment by just putting a number in front of it, I think it’s totally original. Although, every used car salesman sort of understands, right?
DUBNER: Exactly.
LEWIS: Right? Or Donald Trump understands. You name some huge number and that becomes what you’re centering your judgment around. But what they showed is that the number you’re shown has nothing whatsoever to do with the judgment you’re making and can still affect the judgment.
Another mental shortcut Kahneman and Tversky examined is called the availability heuristic.
LEWIS: It’s a fancy name for just memory — like what comes to mind easily and how that warps your judgment. For example, you’re driving down a highway and you’re going 75 mph like everybody else you’re kind of assuming it’s safe because nothing is alerting you to the probability of an accident. And then you see a horrible accident and everybody slows down to 50 because all of a sudden probability of accident is more available. It’s in your mind. So what comes easily to mind leads to all kinds of biases that people have named- the vividness bias. People think that a baseball player is a better baseball player than he is if his talents are very vivid – if he’s really, really fast or has a lot of power he is more likely to be overvalued than if he had subtle abilities, like plate discipline, because those aren’t vivid. Recency bias is a consequence of the availability heuristic. Whatever happened most recently is judged to be more probable and more likely. A hurricane hits New Orleans, wipes it out — everybody thinks hurricanes are more likely to hit New Orleans than they really are and so forth.
[MUSIC: Blindfold, “Rotation”]
A lot of Kahneman and Tversky’s research looked at how people think about risk – and how we typically give adverse events a lot more weight than positive events. That was the thrust of their most influential paper, published in 1979, called “Prospect Theory: An Analysis of Decision Under Risk.” It argued that the standard economic model for decision-making didn’t fully account for how real people make real decisions, especially if there’s the possibility of a bad outcome. It made sense that Kahneman and Tversky thought about this differently than economists – they were, after all, psychologists; also, they’d both seen some bad outcomes themselves. As a child, Kahneman survived the Holocaust, just barely, in France. Tversky was a paratrooper and an infantry commander in the Israeli army, and saw his share of death and disaster. Their own experience with risk, and adverse events, informed what they thought about as scholars. They were both obsessed with how people process information; with how cognitive shortcuts get in the way of long-term logic; and especially with how we try, in our minds, to explain or even undo our worst experiences. The Undoing Project – the title of Lewis’s book – was also the name of the last project Tversky and Kahneman worked on together.
LEWIS: And the nature of the project was they were going to explore the rules of the human imagination. They had come to the conclusion that imagination wasn’t just this free-flowing thing — that actually it obeyed certain rules. And the way they thought they were going to study it was by studying the way people undid tragedies and tried to create alternative scenarios. When I saw the phrase I thought, “That’s a good description of their enterprise.” Because what these guys are engaged in doing, is undoing a false view of the human nature and the way that mind works, and that had infiltrated the social sciences and were just kind of in the air we breathed.
DUBNER: As useful as it is obviously to identify all these heuristics we use and all the errors they lead to, and honestly all the loss it leads to, how prescriptive were Kahneman and Tversky?
LEWIS: You know, they were very diffident about how their work was going to be used. So I think they thought — I know they thought — that people were never going to be as good at correcting for their own illusions, but I think they also thought that they might be good at correcting for other people’s illusions, that it was easier to spot the mistakes and inefficiencies and irrationalities in other people’s thinking and decision-making and judgment than it was your own and so that’s where you get checks from. That and also the whole Moneyball thing, that you use data as an antidote to the warping that naturally goes on when you’re making intuitive judgments.
Coming up on Freakonomics Radio: how to undo that warping. Also, how the odd couple of Kahneman and Tversky came to be:
LEWIS: No one who knew them both could imagine them spending five minutes together.
And: how their work has exploded in recent years.
LEWIS: It is incredible to me how many different spheres of human existence these guys’ work has touched and influenced.
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[MUSIC: Neil Andersson, “The Blue Boat” (from As The Crow Flies)]
Michael Lewis’s book The Undoing Project is a portrait of two men who came together to rewrite many of the assumptions about how people think, and make decisions. Amos Tversky and Danny Kahneman met in the late 1960s; they were both teaching psychology at Hebrew University, in Jerusalem. Aside from that fact, they didn’t have much in common. Tversky was outgoing and headstrong and popular; Kahneman was brooding and, despite his brilliance, riddled with insecurities. They also looked at psychology very differently.
LEWIS: Amos had a kind of sterility to his academic interests. He was a mathematical psychologist. And if you want to put yourself to sleep at night grab a mathematical psychology textbook. It doesn’t really seem to have much to do with psychology. And Amos was happily assuming the assumptions of economics and mathematical psychology, which were that people were basically rational. People when they’re making rational decisions are basically good intuitive statisticians and making judgments as if they were good at them.
Kahneman wasn’t mathy at all. Intuitive, yes; and thoughtful – maybe to a fault. All he could think about was thinking. And he thought that the standard assumptions of mainstream economics and psychology were ridiculous. And he said so, to Amos Tversky’s face, when Kahneman invited Tversky to speak to a graduate seminar that Kahneman was teaching. Tversky, with his usual brio, began to extol the notion that most people are pretty good at making decisions based on a rational assessment of the available information.
LEWIS: And Danny is the first one to really challenge him on this, saying, “I’m not! I make mistake after mistake after mistake and I’m smarter than most of the people I know. This is nonsense, that I can show to you that people make systematic mistakes when they’re faced with decisions and judgments.” And this intrigued Amos. And very quickly they’re in a room together with the door shut and don’t want to see anybody else. And a collaboration begins. And the collaboration is all about the exploration of how the human mind actually works.
This collaboration was surprising to just about everyone at Hebrew University.
LEWIS: They were regarded as two big dogs on campus—yet they were also regarded as polar opposites. No one who knew them both could imagine them spending five minutes together. Kahneman was difficult, neurotic, seemingly perpetually unhappy, full of doubt, tortured. He was very fertile, had lots of ideas, but the minute he had the ideas he thought they were crap, and he would walk away from his own ideas very quickly. What he says now is he had a peculiar talent for changing his mind. He liked changing his mind. That’s a nice spin on a—
DUBNER: Do you believe it?
LEWIS: I think it’s much more complicated than that. I think that he doesn’t know what stability feels like. He was a child of the Holocaust. He spent ages 7, 8, 9, 10, 11 being chased through southern France by Nazis and hiding in chicken coops and barns. He watched his father die because he couldn’t seek medical treatment for fear of being caught by the Germans. And he himself has as one of his central qualities a kind of evasiveness. People found him hard to know. But incredibly talented. And when he got up in front of a class and talked he was mesmerizing. So mesmerizing as one of his students said after he has Danny’s class, he was finding other professors not that interesting and he complained to one of the administrators at Hebrew University said “You can’t do this.” He said, “You can’t compare other teachers to Kahneman. There is Kahneman and then there is everybody else.” Amos was untroubled, happy, simple, very clear in his head. You know, you describe his childhood; it’s not the childhood of an intellectual. It was a childhood of a happy kid, who’s pressed into a military service and through status needs becomes a Spartan warrior, like a lot of these first-generation Israelis were at that time. And he almost certainly killed people. He almost certainly had people trying to kill him. He was a decorated war hero, among other things. He saved other soldiers’ lives and risked his own. And at the end of his life, he still had shrapnel in his body. And was widely admired by everybody who knew him. And he was from a very early age identified by other people, more than by himself, as intellectually spectacular. The psychologist Richard Nisbett, after he got to know Amos, designed a one-line intelligent test, which gets repeated over and over. And it’s this: “The longer it takes you to figure it out that Amos Tversky is smarter than you, the stupider you are.”
Amos Tversky was smart enough to realize that Danny Kahneman, for all his insecurities, would be a priceless intellectual partner.
LEWIS: Central to the dynamic was Amos giving Danny the confidence to be himself, that Danny did not have confidence to be himself. And he didn’t realize how precious and valuable he was.
[MUSIC: Leo Islo, “Mind of Martha Jane” (from Modern Fiction)]
And thus began one of the most productive intellectual partnerships in modern history. Before long, both men moved to the States; they wrote paper after paper after paper, many of them fiercely original and, at first glance, a bit weird – for academia is a realm in which originality is praised but rarely pursued. Tversky and Kahneman tore apart and reconstructed the models that social scientists use to make sense of human behavior. It took some time but their work crossed over into economics, the most hard-headed of the social sciences. It helped, surely, that Tversky was mathy enough that their papers wound up in journals like Econometrica, which published their landmark paper “Prospect Theory: An Analysis of Decision Under Risk.” A more typical Econometrica article of that era? Something like Robert F. Engle’s paper called “Autoregressive Conditional Heteroscedasticity with Estimates of the Variance of United Kingdom Inflation.” Which I’m sure you all remember well. Kahneman and, especially Tversky, were originals in their personal lives as well.
DUBNER: You write at length about Amos’s singular approach to life and work, that he only really did what he wanted to do always, which made other people kind of astonished, when he wanted to go for a run he would just take off his pants and go out in the street and run. I’m curious about you, Michael Lewis, whether as a writer, as a human, as a father, whatever. Did it make you a bit envious to be learning and writing about someone who expressed his own preferences so aggressively whenever he wanted? And did it make you change anything in your life?
LEWIS: Well, that’s an interesting question because when I described Amos to my wife, I told her a couple of things. I said you know he was so ruthless in doing only what he wanted to do that when his mail came in in the morning, he flipped through it, glance at it and say a “what can they do to me?” rule. If by not opening the letter he wasn’t getting into any trouble, he would just chuck it into the garbage can. And this included invitations to parties, or thank you notes, or whatever it was. He had a gift to just not be in any situation he didn’t want to be in. And he told people. He gave people advice. He said, “If you find yourself at a party or a board meeting or a faculty meeting and you find it’s a waste of your time, you don’t have to think up an excuse to leave. You’ll never think of the words. Get up and leave and as you’re walking towards the door the words will come.” Now I’ve actually taken that advice, but when I told my wife about this she said to me: “He’s just like you!” And there is an element of Amos in me where I am extremely good at avoiding anything I don’t want to do.
DUBNER: You talk about Amos’s argument that, as you write it: “[T]he mere act of classification reinforces stereotypes.” It’s a way that we look at two or more groups of things and then kind of pick the most obvious difference between them and build that difference up to the point where we treat those two groups as very, very different when in fact mostly what’s underlying is similarities. And I’m curious any thoughts you might have to how that issue affects how we for instance talk about race in America now, or the political discourse.
LEWIS: One of the big things the human mind is doing all the time is making similarity judgments: Is this a friend or a foe? Is this a potential mate or not? Is this edible food or not? It’s always classifying. We take it for granted, but we’re doing it all the time. And Amos was interested even before he meets Danny, in how people make these judgments. What makes two things similar to each other. And he did really interesting work on the subject. And out of this work grows this other heuristic that they discover. They call it the “representative heuristic.” And if you want to put it in plain English, roughly what they’re saying is that people think in stereotypes. And the stereotypes are incredibly powerful. And when we’re looking for someone to fill any kind of job the fact that someone looks kind of like the way that we imagined the person who holds that job typically to look has huge effects on our judgment about whether that person will be good at that job, much to our detriment. And in fact I think they would probably agree that if a person looks too much like they belong at a job, it’s probably exactly when you want to question whether they belong at the job. Because maybe they got to the job because of the power of the stereotype.
DUBNER: But you know it seems to me at least that there is a little bit of Catch-22 in that in the modern era we talk a lot about equity and fairness and reparations of different sorts and therefore dwell even more on the defining characteristics that are different. And my concern is that by focusing on the differences, you essentially just continue to rebuild and re-create and magnify the stereotypes. Am I wrong?
LEWIS: I think you’re right. If you want to reduce the power of a stereotype, you eliminate the classifications. The more you reinforce the classifications, the more powerful the stereotype will be. That’s their work, I mean that’s not me speaking. That’s their work. And so it is, you’re absolutely right, the more we focus on race as a differentiator between people, the more stereotypes are going to be driving people’s judgments.
[MUSIC: Jetty Rae, “Another Town” (from Can’t Curse the Free)]
DUBNER: Well I guess this leads to what their work has become, which is a couple of economists adopted or hijacked or whatever you want to call it, this work and turn it into a field that is now in academia, in particular, but elsewhere, in government and firms, even individuals, behavioral economics has caught on a lot, but it is prescriptive in that acknowledges the shortcomings of our thought processes and then designs kind of essentially workarounds. So talk to me for just a minute about a degree to which the rest of the world is using moves from, nudges from, whatever we want to call them, that are derived from the work of Kahneman and Tversky and how successful do you think they’re being?
LEWIS: It’s a messy story, but it is incredible to me how many different spheres of human existence these guys’ work has touched and influenced. So it’s not just economics. You know, medicine. It’s now a standard part of medical training for doctors to be introduced to Kahneman and Tversky’s work or at least their ideas, because they’re going to be rendering intuitive judgments about patients and they need to be aware of how they might be fallible. In government, I think the big influence that Amos and Danny have had is in the awareness of the importance of choice architecture – that the environment in which people make the decision has a huge effect on the decision, and if you want government workers to save more money, you design the pension plans so that they have to opt out of them rather than opt into them. And all of a sudden you double or triple the savings rates. If you want people to school lunches to be healthy, you create the default option as a healthy option and force to kids to trade in for a less healthy option if they want it. There are units in the U.S. government, in the British government, in the Australian government, the German government is interested in it, the Scandinavian governments. They’re calling them Nudge units, after Dick Thaler and Cass Sunstein’s work, but this job is really to create environments that will lead people to make choices that are good for them. And that really comes out of Danny and Amos’s work. One of their great discoveries is that people don’t make clean, clear decisions between things, or choices between things. They make choices between descriptions of things. And so how things are described have a huge effect on the way people choose and governments are often charged with creating these decision-making environments.
DUBNER: So these two guys, Danny Kahneman and Amos Tversky, had an incredibly fruitful, original intellectual partnership that was also a very rocky relationship at times. Danny felt that Amos was getting a lot of credit for their work. Danny could be resentful and insecure and as you write the story, three days before Amos Tversky was diagnosed with melanoma they had effectively ended their friendship. Kahneman called it a “divorce.” Amos died. Danny later won a Nobel Prize in economics and Amos, being dead, was not eligible to receive that. So Danny wins the Nobel for work that had been done largely with Amos. So talk for a minute about Danny’s feelings about the award and all the recognition and opportunity it brought to him with his partner gone.
LEWIS: One of the most lovable things about Danny Kahneman is as much as he tortures other people with his doubt, he tortures himself even more. And when Amos had died he was left with a sense, Danny, that the world found their work extremely important, but maybe thought maybe he didn’t have much to do with it. And he had an invitation from the Nobel Prize committee to come and give a talk in 2001 in Stockholm, which he thought of as an audition for the Nobel Prize. And he thought the question wasn’t “Is the work worthy?” The question is “Am I worthy?” And he, you know, some part of him, I think, thought maybe he wasn’t. Some part of him always wondered how important he was, where Amos had never had any doubts about Danny’s importance. I think Amos actually thought Danny was more important than Amos to the whole thing. And so the prize—prizes usually have kind of a temporary effect. I think Danny and Amos’s own work would predict that people’s expectation of happiness from a Nobel Prize would exceed the happiness in the moment, which would probably exceed the happiness of the memory of it.
DUBNER: Well, unless the prize leads to opportunity and continuing recognition, which it really did in this case, right?
LEWIS: In this case it did. And people who know Danny told me going in that one of the problems you’re going to have writing this book is the person who we know post-Nobel Prize is entirely different from the person who got the Nobel Prize. And that he is much less gloomy, much less consumed with doubts, that this kind of like a sense in Danny that everything might kind of work out, which he never had before. And it puts him in a position, in relation to the rest of the world, that he’s most comfortable with. He’s the descendant of famous rabbis and he once said when someone asked if he could imagine an alternative career for himself, he said, “I could only be one of two things – a professor or a rabbi.” He likes to be in the position of being the wise man and he naturally is the wise man. And when you have a Nobel Prize in not even your field – I mean he doesn’t even know that much economics and they gave him the Nobel Prize in economics because of the influence he had on economics–you are treated wherever you go as the wise man and he plays the role beautifully.
DUBNER: And he deserves it, frankly, right?
LEWIS: My God. I’ve written about a lot of people. And I’ve had a lot of characters in my life over the course of my career. I’ve never had one of such depth of interest as Danny Kahneman. Everything that comes out of his mouth is interesting. Everything he thinks is interesting. He just doesn’t believe it.
[MUSIC: Beckah Shae, “See Ya Soon” (from Mighty)]
For the record, it was the work of Kahneman and Tversky that first got me interested in economics, and which led to Freakonomics. Before them, economics seemed too methodical; too bloodless. So I’m grateful to Danny Kahneman and Amos Tversky for shining their light into the human brain – and thankful to Michael Lewis for shining his light on them. Coming up next week on Freakonomics Radio: a very different kind of conversation …
Trevor NOAH: What would I call my religion? The Church of the Truth. That’s what I would call it.
Which, in the end, gets into a lot of the ideas we talked about today:
NOAH: The one thing you’re negating is the fact that what you feel or think about the world is not mutually exclusive from what the world thinks or feels about you.
A conversation with Trevor Noah, host of The Daily Show, and now, author of a best selling memoir, about religion, race – and podcasts:
NOAH: I’ve come to the conclusion that people who refuse to listen to Freakonomics Radio are unfortunately doomed to be labeled as idiots.
That’s next time, on Freakonomics Radio.
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Freakonomics Radio is produced by WNYC Studios and Dubner Productions. Today’s episode was produced by Greg Rosalsky. Our staff also includes Shelley Lewis, Christopher Werth, Merritt Jacob, Stephanie Tam, Eliza Lambert, Alison Hockenberry, Emma Morgenstern, Harry Huggins, and Brian Gutierrez. You can subscribe to this podcast on iTunes, or wherever you get your podcasts; and come visit Freakonomics.com, where you’ll find our entire podcast archive, as well as a complete transcript of every episode ever made, along with music credits and lots of extras. Thanks for listening.
Here’s where you can learn more about the people and ideas in this episode:
SOURCES
- Michael Lewis, writer
RESOURCES
- The Undoing Project, by Michael Lewis, 2016
- Moneyball: The Art of Winning an Unfair Game, by Michael Lewis, 2004
- The Big Short: Inside the Doomsday Machine, by Michael Lewis, 2010
- Thinking, Fast and Slow, by Daniel Kahneman, 2011
- Nudge: Improving Decisions About Health, Wealth, and Happiness, by Richard Thaler and Cass R. Sunstein, 2009
- “Who’s On First,” by Richard Thaler and Cass Sunstein, New Republic, 9/1/2003
- “Subjective Probability: A Judgment of Representativeness,” by Daniel Kahneman and Amos Tversky, Cognitive Psychology, 1972
- “Judgment under Uncertainty: Heuristics and Biases,” by Daniel Kahneman and Amos Tversky, Science, 1974
- “Prospect Theory: An Analysis of Decision Under Risk,” by Daniel Kahneman and Amos Tversky, Econometrica, 1979
- “The Framing of Decisions and the Psychology of Choice,” by Daniel Kahneman and Amos Tversky, Science, 1981
ETC.
- Nobel Prize Lecture by Daniel Kahneman, Nobelprize.org, 2002
- Moneyball, Sony Pictures, 2011
- The Blind Side, Warner Bros. Pictures, 2009
- The Big Short, Paramount Pictures, 2015
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