Monday 28 May 2018

What smart people don't always agree (with me)

One of my favourite ideas is that of "bounded rationality".

I've always struggled with the idea of why people who are intelligent, well informed, and capable could arrive at such different conclusions. I could get differences in things like values and preferences, and the like. But I struggled to get my head around what might be called more analytical differences.

Bounded rationality goes a long way to explaining this. It is a theory of decision making - the term was coined by Herbert Simon - and won him both a Nobel Award in Economics and a Turning Award for artificial intelligence (he's one of my intellectual heroes).  Simon observed that people are only partly rational; the reason for this is because we operate within limits of our cognition. In simple terms, we are not able to apply any sort of rational process to all - or even a majority of aspects - of decisions we are making. Instead, we apply heuristics - cognitive shortcuts - to simplify the processing load in making the decision.

This idea of heuristic simplification is pretty well established. If you've seen images like the one to the left, this is an example of how we use these short-cuts, in this case for reading. Rather than reading each letter, we read words and sentences and our brain fills in the blanks, ignores the exceptions, and we see what we expect. There's a lot of research that explains various aspects of how we process perceptual information.

(note: spelling is important. As is grammar. These short-cuts our brain takes means that good spelling and grammar are essential to reduce the chances someone will mis-understand our writing).

When we're faced with a complex decision, we bring to that decision a whole raft of short-cuts - preconceptions, values, biases, preferences, and other tools that determine how we shape, ask, and answer questions and take decisions. Some of these are systematic (I'll to a blog on cognitive biases and Khaneman and Tversky sometime!) These cognitive tools can be used to direct decisions - which is the foundation of behavioural economics. It explains why I think problem structuring is at least as - if not more - important than problem solving.

But, most of all, they explain how we all make such different decisions. And why smart people don't always agree (with me).

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