Book Review: Noise: A Flaw in Human Judgement by Daniel Kahneman, Olivier Sibony, and Cass R. Sunstein (Ep.24)

Have you wondered why you and your friends or colleagues make very different judgements when faced with the same decision? Do you wonder why you are quick to make a judgement you usually wouldn't at separate times? This book addresses 'Noise' and how it can get in the way of our decisions, sometimes really important ones. 

Works Cited:

• https://www.goodreads.com/book/show/55339408-noise?ref=nav_sb_ss_3_5
• https://www.sciencedirect.com/science/article/abs/pii/S0749597883710022

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Transcript

Hello everyone, this is your host Josh, welcome to the Revitalized Reading Podcast. Today’s episode is the final book review for Season 2, covering “Noise: A Flaw in Human Judgement” by Daniel Kahneman, Olivier Sibony, and Cass R. Sunstein. 

The Synopsis on the back of the book says, “Imagine that two doctors give different diagnoses to identical patients, or that two judges give different sentences to people who have committed the same crime. Now imagine a doctor or a judge who makes different decisions depending on whether it is morning or afternoon. These are examples of noise: variability in judgements that should be identical. Wherever there is judgement, there is noise. Yet most of the time, individuals and organizations alike are unaware of it. They neglect noise. But with a few simple remedies, we can all reduce both noise and bias, and so make far better decisions. Packed with new ideas, and drawing on the same kind of diligent, insightful research that made Thinking, Fast and Slow and Nudge groundbreaking bestsellers, Noise explains how and why humans are susceptible to noise in judgement-and what we can do about it.” Noise was published in 2021, and is 359 pages long.   

As you might have noticed, this book has three authors, which is a first, and I want to share some basic info about all of them, starting with Daniel Kahneman. Daniel Kahneman was born on March 5th 1934 in British Palestine, when he was a young child, his family moved to Paris, where they would experience the German occupation firsthand during WW2. Miraculously, even though his family was Jewish, family friends were able to prevent him and his family from being killed in the holocaust. In 1948, Daniel and his family would move to Israel. While there, he would graduate from the Hebrew University of Jerusalem with a Bachelor of science degree, majoring in Psychology. While in Israel, Daniel would serve a short stint with the Israeli Defense Forces in the Psychology department, shortly afterwards he would move to the United States in 1958 for further schooling at the University of California Berkeley. Kahneman would quickly gain notoriety and fame for his contributions to Psychology, and he has since won many awards for his work, including the Presidential Medal of Freedom and the Award for Outstanding Lifetime Contributions to Psychology. Daniel has been married twice, with two children from the first marriage. Currently, Daniel is the head of the Psychology department at Princeton University. Some of Kahneman’s other works include Well-Being: The Foundations of Hedonic Psychology, Choices, Values and Frames, and his most well known book, Thinking Fast and Slow.

Olivier Sibony: 

·         Born 1967 in Paris France, not much is publicly known about his childhood. 

·         He attended HEC Paris a business school, graduating in 1988. 

·         He has made a career in researching and teaching about the importance of good judgement and decisiveness.

·         He has participated in the writing of  Cracked it!: How to solve big problems and sell solutions like top strategy consultants, and Noise. A Flaw in Human Judgement. He wrote You're About to Make a Terrible Mistake: How Biases Distort Decision-Making and What You Can Do to Fight Them. Himself

Cass R. Sunstein

-          Sunstein was born in Massachusetts in 1954. From a young age, Sunstein would show significant interest in law, and would have the opportunity to be clerk for USSCJ Thurgood Marshall for a short time. 

-          Sunstein would be professor at Colombia law school for Constiutional law, administrative law, and environmental law. 

-          Sunstein has independently written, or collaborated on over 45 books, varying from law, philosophy, to Star Wars commentary. 

-          He would be Administrator of the Office of Information and Regulatory Affairs for the Obama Administration from 2009 to 2012. 

-          In 2014, Harvard Law school found that Sunstein was the most cited individual for law related papers and publications in the United States. 

Now for the complicated part, breaking down a dense 359 page book in a few minutes haha. There are 6 parts to Noise, and I’ll start by summarizing Part 1: Finding Noise. Finding Noise explains what the heck noise even is. Noise is the bias and exterior factors that impact decisions big and small. This part also identifies the various settings Noise is prominent, but also particularly damaging in the areas of judicial proceedings, insurance underwriting, medicine, and a couple others. 

Part 2: Your Mind is a Measuring Instrument. This section explains how to identify and understand Noise in the spaces you occupy, along with the ways it can happen in different settings. While this section doesn’t touch on how to address Noise quite yet, it sets the foundation for further understanding of it at a more practical level. 

Part 3: Noise in Predictive Judgements. What on earth is a Predictive Judgement anyway? Well, a predictive judgement refers to the process of making an informed guess or assessment about a future event or outcome based on available information, historical data, and patterns. This section discusses how predictive judgements can be influenced by Noise and other forms of bias or inconsistency.

Part 4: How Noise Happens. This section is rather self-explanatory. Here we are introduced to ways that noise can enter the equation in various settings. Noise can be something as simple as the time of a day a trial takes place, or the day of the week an insurance company sends a policy to underwriting. While not every form of noise and its origin is explained, this section covers the major types of noise one can find in most companies and communities. 

Part 5: Improving Judgements. Now we enter the portion of the book that begins to give the reader advice on how to reduce noise, and improve judgements overall. Some of the solutions include hiring professionals to organize and properly channel the efforts of a company with a set standard, or there is the beginning of noise audits, where the workers or people of the community can begin to slowly improve their judgements with consistent and thorough audits. 

Part 6: Optimal Noise. As weird as it might sound, while noise has probably sounded like the ultimate evil, the book makes sure to emphasize that not all noise is bad, but that there is an optimal amount for different situations. The book ends with a general conclusion on the good that can be brought about if noise is reduced and properly regulated in government, businesses, and individual lives. With all of that said, what is the central purpose of the book? “Noise: A Flaw in Human Judgement” Explains the prevalence of noise in the world surrounding important decisions and judgements, and ultimately how to address it and mitigate its effects.

Because there are 3 times as many Authors as I am used to, I’ll only share 3 quotes today. As usual, I will share the page number the quote can be found if you would like to follow along. Our first quote is on Page 115, “From the perspective of noise reduction, a singular decision is a recurrent decision that happens only once. Whether you make a decision only once or a hundred times, your goal should be to make it in a way that reduces both bias and noise. And practices that reduce error should be just as effective in your one-of-a-kind decisions as in your repeated ones.”

The next quote is on page 232, “Noise is mostly a by-product of our uniqueness, of our “judgment personality.” final quote is on page 67, “wherever there is judgment, there is noise—and more of it than you think.” For the Comprehension score, Noise gets a 7. While the book can occasionally go too deep in the stats and clinical language, it’s generally easy to understand and follow. As for engagement, the book gets a 5 out of 10 from me. While there are certain sections of the book that caught my attention and kept me engaged, more than half of the book was laborious to read, which obviously isn’t great. As for the G-R rating, Noise is PG, the rating has nothing to do with the content, but the subject matter of the group. This book probably isn’t ideal for younger kids, just because they won’t understand most of it.

Sebastian Gebski 5 stars. “This book is criticized primarily for 2 reasons:
 * first of all, because it doesn't bring such striking mental models as System 1 and System 2 (from "Thinking ...")
 * because some have expected that Kahneman will ride on SJW wave and write a book on "racial/social bias", full of political correctness, etc. (hint: it didn't happen)
 
 Unjustly, because surprisingly this is a really good book. Seriously, if you think about this - is it even possible to write a good book, without avoiding excessive repetitions, on such a specific (and narrow) topic? I know I wouldn't be able to this, but well - I'm certainly no Daniel Kahneman.
 
 So, if you're really interested in the topic, you will really enjoy the book. What were my favorite parts?
 * the one about rating content on public marketplaces
 * why noise is sometimes useful (rules vs standards)
 * noise in medical examinations
 * what has bigger negative implications: noise or bias?
 
 I've enjoyed reading "Noise" more than I expected. Don't be fooled - it is SPECIFIC and it is focused on a very narrow topic (which you may find annoying), but in my case - I loved it.”

Riku Sayuj 4 stars. "Noise" is positioned as another ground-breaking dual lens to look at the world, fresh from Kahneman's desk. However, it is not as radical as TFAS since it only extends the central argument and is not half as well written. This one could have been an additional chapter in an updated edition.
 
 The central thesis is that while we worry about bias a lot (the basis of which was explored in TFAS), noise is the silent enemy - affecting our ability to think clearly and make sound decisions. Historically we have been blind to bias of various sorts, and we need to continue our pursuit of eliminating bias, but noise can be just as iniquitous and needs to be addressed as well. Noise can be insidious, sneaking into our decision-making processes in subtle and often unconscious ways.
 
 The book ultimately extends the central thesis of TFAS - our decisions are flawed: We make wrong decisions, yes, but even more so, we make random decisions. If asked to replay our decisions in a DBRCT of some sort, we'll most likely create a spread of decisions that'll make us question our identity. That's the reality.
 
 Kahneman leaves us worse off than where we were at the end of TFAS. However, he does offer some techniques for improving our focus and concentration, as well as ways to reduce the number of distractions and interruptions that can cause noise in our decisions. But in the end, the two books together show us up as even more flawed beings than ever.”

Nick Lucarelli 3 Stars. “Doesn't add enough to "Thinking, Fast and Slow" to warrant another book. Feels like one of those books where the author gets paid for every time they use a specific word (in this case, "noise") and have said it to themselves so much it has become a cult-like world view. In this instance, noise refers to the variations in human decision making which Kahneman attributes to a mixture of situational and systemic cognitive biases that covers old territory in the behavioral psychology world. He makes a case for a utopian rules-based slash AI system to guide decision making in spheres including law, medicine and HR, which can work to a degree to eliminate noise and bias but can also mute gestalt and out-of-the-box thinking. Aside from the odd forcefully inserted and admittedly interesting behavioral psychology study The 5 page conclusion at the end is all that's worth your time here.”

Rebecca A 2 Stars. “Although interesting, the authors clearly show their bias in “Noise”. It was a disappointing book after reading the incredibly interesting and applicable “Thinking Fast and Slow”. My main concern is that they imply causation where statisticians would not claim more than correlation. Implying causation is sloppy and a bad statistical practice.
 
 They are greatly concerned with the randomness of individual impacts to people from judgments, insurance companies, and job interviews. Although they state that overall impacts to individuals on average are fair (i.e. unbiased), the impact to each individual may have a large variance (be wildly different from the average), which is caused by systemic noise. They assume this is inherently bad and that we should systematically reduce this noise by implementing more algorithms and rules into all sorts of private and public institutions. My concern is: who determines the rules for those algorithms? (Unbiased statisticians or policy makers?)
 
 Essentially, this is a long discussion about statistical models that have larger variances than the authors would like (and larger variances than the general population would expect). They use the variability in human judgement to illustrate that humans are flawed. Their solution is to use more models, but they also point out that models can be flawed in similar ways. It’s a conflicting book of “don’t trust anyone’s judgement” and “don’t trust models”, but “do trust that individuals are likely having unfair things happen to them, even if there isn’t any bias in the system.” It was unfortunate that they didn’t include a discussion of what individuals can do to improve themselves (reducing their own biases and noise) rather than waiting for big institutions to reduce that noise for them.”

Nekomancer 1 Star. “This is one of the worst popular press social sciences books I've ever read, and I've read many. It gets a lot wrong about what we know regarding decision-making and basic statistics. While it's true that algorithms are highly useful when applied appropriately, this book massively overstates the case in their favor while neglecting important counterpoints, among other serious problems. Kahneman's "Thinking, Fast and Slow" remains one of my favorite books on research in psychology and this is an extremely disappointing step down. I recommend skipping "Noise" entirely and looking elsewhere if you're interested in the subjects it touches on. Want a book on statistics? Try "Naked Statistics" by Charles Wheelan. Interested in decision-making? "Thinking, Fast and Slow" is still good, but skip the chapter of priming (it doesn't hold up). "Thinking in Bets" is decent as well. Want critical thinking with a healthy dose of data interpretation? "Calling Bullshit: The Art of Skepticism in a Data-Driven World" is pretty good. Just, whatever you do, skip "Noise" and spend your time elsewhere.” Noise hold an average rating of 3.66 on goodreads. 

“Noise is an absolutely brilliant investigation of a massive societal problem that has been hiding in plain sight.” (Steven Levitt coauthor of Freakonomics)

“An intricate examination of decision-making and sound judgement….fascinating.” (Publishers Weekly)

“Convincing…A humbling lesson in inaccuracy.” (Robert Armstrong Financial Times)

Overall Score 5/10. Interesting at certain points, writing style can appear different keeping engagement. The book is long winded, gets too complicated, it sounds like it’s trying to be smart. I only suggest it if you are really curious about Noise, and how to address it. Thinking, Fast and Slow is 4.18, compared to 3.66 of Noise. 

Thank you so much for joining me again today! While this is the last book review for season 2, we still have some awesome episodes that will be coming out in the next couple of weeks. So keep up with the Podcast’s social media pages to stay updated with all that’s happening for the show. Thank you to those who joined me for the 1 year anniversary of the podcast on Facebook live, I am very excited to see what can happen this next year. Have a great day, stay safe, and as always, keep reading. Bye everyone.