Wednesday, June 30, 2021

Noise: A Flaw in Human Judgment (Daniel Kahneman, Olivier Sibony, and Cass R. Sunstein)

Daniel Kahneman, author of Thinking, Fast and Slow, returns with Noise: A Flaw in Human Judgment. Written with co-authors Olivier Sibony and Cass R. Sunstein, Noise explores why people make bad judgments.

“Noise” is defined as variability in decision making, whether it be in prescribing medicines, making forecasts, deciding on personnel, determining how much bail to require in a criminal case, and so on. While bias is talked about frequently in social science, the concept of noise is not. Kahneman’s book gets into the weeds on how noise can negatively and inconsistently impact individuals and businesses. Humans are susceptible, as the authors articulate, to noise in all aspects of life. The book spends a lot of time explaining the why behind that fact and how to address it. 

Solutions to address noise include “noise audits” to measure disagreement in group decision making as well as algorithms to help reduce human input in the decision making process.

My favorite parts of Noise regarded personnel decisions in the office, specifically performance reviews (the 3 your boss gives you in an annual performance review may not mean the same as a 3 Sally’s boss gives her, for instance) and hiring.  Some parts of Noise are very technical and in-depth, requiring a couple of re-reads to understand fully. However, it is a very good journey into the flawed process of decision making, one that will offer insight on how to improve this process.