One terrific chapter in Thinking Fast and Slow is 21, Intuitions vs Formulas. There Kahneman tells us a brutal unsettling truth, which is that for certain purposes in certain situations, algorithms do better than expert judgement. Thick detailed rich experiential knowledge does worse than a boring quick little formula. A psychologist called Paul Meehl made this claim more than 50 years ago and the research he inspired is still pouring out. Clinical psychologists don’t like the claim! (You can see the insurance people licking their chops, although Kahneman hasn’t mentioned that as far as I’ve read.)
This is about prediction, and for a moment I consoled myself with “oh well just for prediction…” but really, that won’t do. Prediction is … Read the rest
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