Michael Lewis profiles Daniel Kahneman, one of the father’s of behavioral economics. Kahneman has a new book coming out: “The story he tells has two characters—he names them ‘System 1′ and ‘System 2’—that stand in for our two different mental operations. System 1 (fast thinking) is the mental state in which you probably drive a car or buy groceries. It relies heavily on intuition and is amazingly capable of misleading and also of being misled. The slow-thinking System 2 is the mental state that understands how System 1 might be misled and steps in to try to prevent it from happening. The most important quality of System 2 is that it is lazy; the most important quality of System 1 is that it can’t be turned off. We pass through this life on the receiving end of a steady signal of partially reliable information that we only occasionally, and under duress, evaluate thoroughly. Through these two characters the author describes the mistakes your mind is prone to make and then explores the reasons for its errors.”
Of course, in his own Michael Lewis way he brings it back to baseball, finding a letter from baseball statistician Bill James to Kahneman’s biggest collaborator:
“Baseball men, living from day to day in the clutch of carefully metered chance occurrences, have developed an entire bestiary of imagined causes to tie together and thus make sense of patterns that are in truth entirely accidental,” James wrote. “They have an entire vocabulary of completely imaginary concepts used to tie together chance groupings. It includes ‘momentum,’ ‘confidence,’ ‘seeing the ball well,’ ‘slumps,’ ‘guts,’ ‘clutch ability,’ being ‘hot’ and ‘cold,’ ‘not being aggressive’ and my all time favorite the ‘intangibles.’ By such concepts, the baseball man gains a feeling of control over a universe that swings him up and down and tosses him from side to side like a yoyo in a high wind.” It wasn’t just baseball he was writing about, James continued. “I think that the randomness of fate applies to all of us as much as baseball men, though it might be exacerbated by the orderliness of their successes and failures.”
As an aside, Kahneman is also the guy behind remembering self versus experiencing self.