Friday, December 16, 2016


It's obvious to almost everybody that there areas of life in which expert performance far surpasses that of the beginner or even the enthusiastic amateur. Hunting, farming, sports, science, professions like medicine and law, games like chess, go and bridge are all examples. Very simple games, like tic-tac-toe, are another story - one or two tricks makes you an expert.

Michael Lewis was on Colbert's show the other week, touting his new book: "The Undoing Project," about the collaboration of Israeli psychologists Daniel Kahneman and Amos Tversky which led to Kahneman's Nobel Memorial Prize in Economics. Colbert set him up by asking him about why the stock market has gone up since Trump was elected. Lewis said that analysts can construct very persuasive narratives explaining this but could have constructed equally persuasive narratives if the opposite had happened. In fact, predicting the stock market is one of those areas where supposed experts really can't outperform chance, and the work of Kahneman and Tversky conclusively showed that.

Our ability to construct persuasive narratives is a pretty fundamental human trait, and even though it can be misleading, as with the stock market (and I would add religion), it wouldn't have been perfected if it didn't have survival value. In particular, I think, it's at the core of both individual and group planning. There is little doubt that human dominance in the terrestrial ecosystem is due to our ability to cooperatively plan and act.

One crucial point is that the world contains both real and phony expertise. The way to tell the difference is to look at the logical details and the data.