Gregory Berns, a professor of neuroeconomics at Emory University and author of Iconoclast: A Neuroscientist Reveals How to Think Differently(UK)/(US), was interviewed this morning on Radio 4′s Today programme exploring the role of neuroeconomics in understanding the current crisis. He’s in Davos for the World Economic Forum, with all the large fromages.
Back in the day, the Knackered Hack used to dispatch a team of reporters to Davos. Press places were then scarce. Now I’m watching it all on Twitter, my very own self-organizing newswire, and tossing in the occasional iconoclastic observation of my own. Who-da thunk it? Everyone and his dog seems to be there; some shuddering, and not from the cold.
Berns message was about as negative as you can get when considering the current crisis. He deftly applied the old-dog-new-tricks teaching heuristic to an entire generation:-
One thing that we know is when people make decisions that they are uncertain about is that they look to other people… We have seen along the way how other people’s opinions essentially pollute those judgments. Now, modern markets are great. Now, economists like to talk about efficient markets and all of that, but the problem is that they are only efficient when people behave as individuals and render independent judgments. Now I would probably go as far as saying the current crop of adults is a lost cause in that I think we should be focussing our efforts on the next generation and how to teach them to make judgment that are independent of each other and stop this crazy herd behaviour.
So there you have it. All current adults are sheep. Better cancel the Twitter account . You can listen to the whole thing here. I think it was edited, so there may be some context missing and the above quotation therefore not adequately representative. That’s mainstream media for you.
All that said, like a dog barking in the wind, I myself did tweet the following just a few weeks ago:-
Haunted slightly by counterfactual sense the boom promoted an entire generation of the wrong type of manager”
I’ll come back to that idea soon, I hope. But in the meantime, given Berns’ imperative that we focus on the cognitive capacities of the next generation, it was a neat little coincidence that a review copy of a new textbook by David Hardman, entitled Judgment and Decision Making, arrived in the post yesterday from Wiley. US version available here. Just take a look at the contents:-
- Introduction and Overview: Judgments, Decisions Rationality
- The Nature and Analysis of Judgment
- Judging Probability and Frequency
- Judgmental Distortions: The Anchoring-and-Adjustment Heuristic
- Assessing Evidence and Evaluation Arguments
- Covariation Causation, and Counterfactual Thinking
- Decision Making under Risk and Uncertainty
- Preference and Choice
- Confidence and Optimism
- Judgment and Choice over Time
- Dynamic Decisions and High Stakes: Where Real Life Meets the Laboratory
- Decision Making in Groups and Teams
- Cooperation and Coordination
- Intuition, Reflective Thinking, and the Brain
Back of the net, as they say in soccer.
David, with others, runs the London Judgment and Decision Making Group, whose seminars I’ve been lucky enough to attend when I’m in town. If Berns is right, David should be needing a larger venue. David assures me he will be blogging on the book before too long, so I’ll let you know when that happens. We can definitely benefit from a regular dose of wisdom from this discipline. Of course, it’s a little known fact that the Knackered Hack is already one of the leading decision science blogs on the web. It says so here. And if you are wondering how that happened, the answer remains … well … uncertain.
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