Friday, April 9, 2010

Gut Feelings - Short Cuts to Better Decision Making

Author:                   Gerd Gigerenzer
Published:               2007
Publisher:                Penguin Group
Paperback:             288 pages
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Have you  read Malcolm Gladwell's bestseller Blink ? I have not read it yet, but I think this book Gut Feelings which I  just finished reading more than makes up for it.  Because a critical source for Malcolm Gladwell's Blink was the breakthrough research on intuitive thinking carried out by Gerd Gigerenzer who is the author of this book.
This book  warns you from getting stuck in analysis paralysis mode and strongly advocates the necessity and urgency to take decisions based on your intuitive gut feelings given the limited information and time you have at your disposal. Such decisions, the author argues , are generally as good as if not better than the decisions taken with tonnes of data and information.
According to the author gut feelings (aka intuition, hunch) refers to a judgment
  1. that appears quickly in consciousness,
  2. whose underlying reasons we are not fully aware of, and
  3. is strong enough to act upon
The rationale behind working of gut feelings consists of  two components
  1.  simple rules of thumb (heuristic), which takes advantage of
  2. evolved capacities of the brain.
As per the author the goal of this book is to first explain the hidden rules of thumb underlying the intuition and then to understand when the intuitions are likely to succeed or fail.

Some  such  rules of thumb behind intuitive decision making are:
  • If a person looks at one alternative (longer than at others), it is likely the one the person desires.
  • In an uncertain environment, good intuitions must ignore information.
  • Recognition heuristic - If you recognize one object but not the other, then infer that the recognized object has higher value.
  • Health care heuristics - If you see a white coat, trust it. Don't ask your doctors what they recommend. Ask them what they would do if it were their mother.
  • Default Rule - If there is default, do nothing about it
  • Social instinct heuristics - Do what the majority of your peers do. Do what a successful person does.
 Such common sense heuristics and many more are discussed with convincing examples and case studies throughout the book.

Overall a very interesting read, though at certain places it tends to be  somewhat repetitive.

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