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Think Like a Freak:
How to Think Smarter About Almost Everything
Steven D Levitt and Stephen J Dubner
Worst enemy of predicting future is dogmatism - the unshakable belief that they know the truth about something when they actually don't. Tetlock and others have tracked prominent pundits and found that they tend to be massively overconfident, even when their predictions turn out to be completely wrong. This is a lethal combination - cocky plus wrong - especially when there is a more prudent option available: simply admit that you don't know.
The Iraq War was executed primarily on the claim that they had WMDs. Eight years later, 4500 American deaths, probably 100,000 Iraqis, and $800 billion dollars later, the claims proved to be wrong.
Incentives explain: there is a huge payoff for someone who makes a big and bold prediction that happens to come true. But if it doesn't, then it will be quickly forgotten, since no-one has an incentive to remember all the failed predictions.
We don't know ourselves very well, despite all the time we have spent with ourselves - 80% rate themselves as above-average drivers, even when they are lying in a hospital bed after a single-car accident.
Problem with applying moral test - when you are consumed with the right or wrong of an issue, it's very easy to lose track of what the actual issue is. Convince yourself that the answers are obvious, that it is a black-and-white issue with no grey area, and worst of all, that you already know everything you need to know about the issue so there is no point in trying to learn any more.
Suicide is an issue many are reluctant to discuss. But there are 38,000 suicides in US each year; twice the number of homicides. David Lester, a New Jersey professor, has published more than 2000 studies exploring the relationship between suicide and other factors such as alcohol, guns, mental health, IQ, internet use, drugs, video games etc. He has a tentative idea that people suicide when they "have no-one left to blame". If it's no-one else's fault that you're unhappy, that's when you despair.
But he also says that what he knows about suicide is dwarfed by what he doesn't know.
The key to learning is feedback. If you're trying to bake a loaf of bread with just a list of ingredients and no instructions, and you never see the finished product, you'll likely never come up with a good loaf. And with a large and complex problem, it's very difficult to capture the right feedback.
To think like a Freak you have to think small. All the hard problems have been thought about, hard, by many people who are mostly smarter than you. The best contribution you can make is to nibble around the edges.
Isaac Singer, who won a Nobel Prize for literature, said he preferred to write for children, because they read books, not reviews. And best of all, "they don't expect their beloved writer to redeem humanity."
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Whenever you interact with anyone or any organization, it always falls into a handful of frameworks. There's the financial framework for buying and selling. There's 'us-vs-them' frame for sport, war and politics. The 'loved-on' for friends and family, and collaborative one for work of amateur singing group etc. And there's the 'authority figure' framework in which you are expected to follow the instructions of parents, teachers, police and religious leaders.
Some rules about incentives:
1. The people devising the scheme are never as smart as the ones figuring out how to game the system.
2. You can easily imagine how you would respond to the carrot, but the people you are aiming to change often don't think the same way you do.
3. As soon as you introduce an incentive, you change the game, so the way people behave before is not necessarily the same as after, and the behaviour change is often not in the desired direction.
Scammers have a limited time resource. One way to combat them would be to design a chatbot that plausibly floods their system with apparent victims.
Best way to persuade is to tell stories. Not anecdotes ("the plural of anecdotes is not data"). Think of the Bible.
(London Times 1)
The authors of a new book explain why quitting a career or relationship you aren't enjoying makes perfect sense.
All these years later, the words still resonate: "Never give in, never give in, never, never, never - in nothing, great or small, large or petty." The speaker was Winston Churchill; he made his remarks at Harrow, the school of his youth. The date was October 29, 1941, deep in the heart of the Second World War. Hitler's army had been gobbling up huge swathes of Europe and beyond. German warplanes had bombed Britain nonstop for months, killing tens of thousands of civilians. A land invasion was said to be in the works. It was impossible to know whether Great Britain would even exist a few years hence.
And so Churchill's words that day took on an urgency that inspired millions for years to come. The message is unequivocal: failure may be an option but quitting is not. To quit is to prove oneself a coward, a shirker, a person of limited character - let's face it, a loser. Who could possibly argue with that?
A Freak, that's who.
Sure, if you are prime minister of a great nation that is facing extinction, fighting to the death is indeed the best option. But for the rest of us the stakes aren't usually so high.
You've been at it for a while now, whatever the 'it' is - a job, an academic pursuit, a business start-up, a relationship, a charitable endeavor, a sport. In your most honest moments, it's easy to see that things aren't working out. So why haven't you quit?
At least three forces bias us against quitting. The first is a lifetime of being told that quitting is a sign of failure. The second is the notion of sunk costs. This is pretty much what it sounds like: the time or money or sweat equity you've already spent on a project. The third force that keeps people from quitting is a tendency to focus on concrete costs and pay too little attention to opportunity cost. If you want to go back to university to get an MBA, you know it'll cost two years' time and tens of thousands of pounds - but what might you have done with that time and money had you not been in school?
Civilisation is an aggressive, almost maniacal chronicler of success. This is understandable - but might we all be better off if failure carried less of a stigma? When failure is demonised, people will try to avoid it at all costs, even when it represents nothing more than a temporary setback.
On January 28, 1986, Nasa launched the space shuttle Challenger from Kennedy Space Centre in Cape Canaveral, Florida. The launch had already been delayed several times. The mission had drawn massive public interest, largely because the crew included a civilian, a New Hampshire schoolteacher named Christa McAuliffe. The night before the launch, Nasa held a long teleconference call with engineers who had built the Challenger's solid-fuel rocket motors, Allan McDonald among them. It was unusually cold in Florida - a predicted overnight low of minus 8C, so McDonald recommended the launch be postponed again. The cold weather, the engineers explained, might damage the rubber O-rings that kept hot gases from escaping the shuttle boosters. The boosters had never been tested below 10C, and the morning forecast indicated temperatures much lower than that.
During the call Nasa pushed back against McDonald's decision to postpone. He was surprised. "This was the first time that Nasa personnel ever challenged a recommendation that was made that said it was unsafe to fly," he later wrote. "For some strange reason we found ourselves being challenged to prove quantitatively that it would definitely fail, and we couldn't do that."
The launch was officially back on. McDonald was livid, but he had been overruled. Nasa asked him to sign off on the decision to launch. McDonald refused; his boss signed instead. The next morning, Challenger took off as scheduled and blew apart in mid-air 73 seconds later, killing everyone on board. The cause, as was later established by a presidential commission, was the failure of O-rings due to the cold weather.
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What makes this story remarkable - and even more tragic - is that the people in the know had forecast the exact cause of failure. That's the idea behind a 'premortem', as the psychologist Gary Klein calls it, to find out what might go wrong before it's too late. You gather up everyone connected with a project and have them imagine that it launched and failed miserably. Now they each write down the exact reasons for its failure. Klein has found the premortem can help to flush out the flaws or doubts in a project that no one had been willing to speak aloud.
Whether quitting is worth it is the sort of question that is inevitably hard to answer, at least empirically. So we tried the next best thing. We set up a website, named it Freakonomics Experiments (freakonomics.com), and asked people to let us decide their future with a coin toss. We ensured their anonymity, asked them to tell us their dilemma and then flipped the coin. (Technically, it was a digital coin toss from a random number generator, which ensured its fairness.) Heads meant quitting and tails meant sticking it out. We also asked them to check in with us after two months and again after six months so that we could see whether quitting made them happier or less happy. And we asked for a third party - a friend or family member, usually - to verify that the flipper actually followed the coin flip.
As ludicrous as this may seem, within a few months our website had attracted enough potential quitters to flip more than 40,000 coins. The male/female split was about 60/40; the average age was just under 30. Some 30 per cent of the flippers were married and 73 per cent lived in the United States; the rest were scattered across the globe.
Just to give you a flavour, here are some of the questions we received: Should I have the fourth child that my husband wants? Should I quit the Mormon faith? Should I come out? Should I go vegan? Should I let my talented daughter quit piano? Should I start a Lebanese women's rights movement on Facebook?
Overall, 60 per cent of the people followed the coin toss - which means that thousands of people made a choice they wouldn't have made if the toss had come out opposite.
People were especially willing to follow the coin's command when it came to the following questions: Should I ask for a raise? Should I splurge on something fun? Should I sign up for a marathon? Should I break up with my boyfriend/girlfriend?
On this last question - the romantic breakup - we were responsible for the dissolution of roughly 100 couples. (To the jilted lovers: sorry!) On the other hand, because of the nature of a coin flip, we were also responsible for keeping together another 100 couples who might have broken up had the coin landed on heads.
Some decisions made people considerably less happy: asking for a raise, splurging on something fun and signing up for a marathon. It could be that if you ask for a raise and don't get it you feel resentful. And maybe training for a marathon is far more appealing in theory than in practice.
Some changes, meanwhile, did leave people happier, including two of the most substantial quits: breaking up with a boyfriend/girlfriend and quitting a job.
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Have we definitively proved that people are on average more likely to be better off if they quit more jobs, relationships and projects? Not by a long shot. But there is nothing in the data to suggest that quitting leads to misery either. We have each been serial quitters and are pretty happy about how things turned out.
One of us - Levitt, the economist - was pretty sure, from the age of nine, that he would be a professional golfer. At 17 he qualified for the Minnesota state amateur championship. But his competitor during the qualifier - a short, squat, unathletic-looking 14-year-old - routinely out-drove him by 30 or 40 yards and beat him soundly. If I can't beat this kid, he thought, how am I ever going to be a touring pro? The lifelong golf dream was summarily shuttered. In retrospect, Levitt may have given up too easily. That 14-year-old was Tim 'Lumpy' Herron, who is approaching his 20th year on the PGA Tour, with career earnings of more than $18 million (£11 million).
Years later, Levitt enrolled in an economics PhD programme because it gave him the cover to quit a management consulting job he hated. He focused on political economics and, by any standard metric, his career was going well. Just one problem: political economics was no fun at all. Yes, it was an important field, but the work itself was dry as bones.
There seemed to be three options:
1. Plough on regardless.
2. Quit economics entirely and move into his parent's basement.
3. Find a new speciality within economics that wasn't so dull.
No 1 was the easiest choice. A few more publications and our hero would likely earn tenure in a top economics department. This option exploited what academics call the status-quo bias, a preference for keeping things as they are. No 2 had some intrinsic appeal but he passed. No 3 beckoned, but was there any activity he enjoyed that might also reboot his academic career? Indeed there was: watching Cops on TV.
No, it wasn't very classy, and probably not important, but it was incredible fun to watch. Every week, viewers rode along with cops in Baltimore or Tampa as they chased down carjackers and wife beaters. The show wasn't remotely scientific, but it did get him thinking. Why are so many of the criminals drunk? Does gun control really work? How much money do drug dealers make?
Watching a few dozen hours of Cops prompted enough questions to fuel a decade's worth of fascinating academic research. And, just like that, a new career path was laid out: the economics of crime. It was an underserved market and, although not nearly as important as political economics, it could permanently keep this economist out of his parents' basement.
The second author of this book has quit both a childhood dream and a dream job. He played music from an early age, and in college helped to start a rock band, the Right Profile, named after a song on the Clash album London Calling. After a few years they signed a contract with Arista Records and the band was on its way. It was intoxicating to be so close to his childhood dream.
And then he quit. Somewhere along the way, he realised that as exhilarating as it was to get up onstage with a guitar and jump around like a maniac, the actual life of a rock star didn't appeal to him. From the outside, chasing fame and fortune seemed fantastic. But he realised he'd prefer to sit in a quiet room and write stories, then go home at night to a wife and kids. So that's what he set out to do. This led him to graduate school and a few years of writing anything he could, and then, as if beckoning from the heavens, came The New York Times, offering a dream job. For the first year at the Times he pinched himself daily. One year gave way to five and then . . . he quit again. As exciting as journalism could be, he realised he'd rather be off on his own, writing books.
It's pretty obvious: quitting is at the very core of thinking like a Freak. Or, if that word still frightens you, let's think of it as letting go. Letting go of the conventional wisdoms that torment us. Letting go of the artificial limits that hold us back - and of the fear of admitting what we don't know.
We might add that Churchill was in fact one of history's greatest quitters. Soon after entering politics he quit one party for another, and later he quit government altogether.
Perhaps it was that long streak of quitting that helped Churchill to build the fortitude to tough it out when it was truly necessary. By now he knew what was worth letting go, and what was not.
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(London Times 2)
Have you ever received one of those emails promising you a fortune if you help the widow of Nigeria's former head of the security forces? All you have to do is say the word and millions of dollars could be yours in commission.
If you are like me, you will have scoffed at the request, amused that the author admits to coming from Nigeria, which is well known for this scam, and surprised that the fraudster didn't think it worth the effort to make their communication more convincing and original.
What almost certainly hasn't struck you is that this incompetence is deliberate. The Nigerian email scam is just one of the many everyday items you will look at a little differently if you read Think Like a Freak by Steven Levitt and Stephen Dubner.
As the author's explain, it doesn't cost much to send out an email to thousands of people trying to entice them into co-operating. What does cost time and money is getting the cash out of the people who respond. The fraudsters do not want to waste their time on people who will realise part of the way through the operation that they are falling into a trap. It is better that they realise this at the beginning and never respond.
So the incompetent email acts as a filter. Only the truly gullible bother responding to such an obviously ludicrous communication. The people the criminals lavish the attention upon are therefore those most likely to fall for the trick.
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The conceit of Think Like a Freak is that it will teach you how to think more clearly. And it doesn't do a bad job of offering advice. It encourages the reader, for instance, to be far more ready to admit when we don't know something (introducing me for the first time to a fabulous word: ultracrepidarianism, which means 'the habit of giving opinions and advice on matters outside of one's knowledge or competence').
Or, to give another example, to understand the importance of incentives and to think about the motivations of your customers.
The advice is usually judicious, but rather randomly assembled. Think Like a Freak isn't in any way a comprehensive study of thinking about behaviour. What makes it - as the authors acknowledge explicitly - are the stories which accompany the rules on how to think.
The section on incentives, for instance, relates what happened when Mexico City tried to deal with its pollution problem by rationing use of the roads. Drivers would only be able to drive on one workday a week, with the day determined by the car's licence plate. What happened? Pollution got worse. People skirted the ban by buying a second car, often an older, and therefore less environmentally friendly, model.
And there's the story of how the British tried reducing the number of cobras roaming Delhi by offering a bounty for every cobra skin. Indians began actively breeding the cobras in order to kill them and claim the bounty. When the scheme ended they released the snakes onto the streets.
Being blandly advised that 'if you ask the wrong question, you'll surely get the wrong answer' is unlikely to help anybody think more clearly. The next time they face a tricky problem, readers might, however, remember Takeru Kobayashi and the hot-dog competitions.
In 2001, Kobi, as he is known, entered the Coney Island eating competition. The record for eating hot dogs in a bun stood at 25 and one eighth in 12 minutes and Kobi was a first timer, thought not to stand a chance. Instead the Japanese man ate 50, an extraordinary achievement. How did he do it? By working out what the real objective was.
Before Kobi, eating competitors used to eat the same way they would at a picnic, just more quickly. Kobi understood that he wasn't being asked to enjoy the hot dogs or consume them in any prescribed way. He was just trying to eat more of them. Nobody said, for example, that he had to eat them end to end, or that he had to eat bun and sausage together. So he broke them in half and ate dogs first then buns, also dunking the buns in water. Repulsive, but effective.
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The most original section advises readers to make use of the work of game theorists. The Nigerian scammers do this, tricking the targets of their fraud into revealing how gullible they are. We also read of Zappos shoe company which pays people a bonus to leave the company after a month. This helps them to get rid of employees who are motivated to work there only by money and who might not serve the customer properly.
I was quite sceptical about Think Like a Freak before reading it. I enjoyed Freakonomics a great deal. I wasn't always convinced by their theories (I am not sure they are right about abortion and crime, which they say are linked, with the legalisation of the former leading to a drop in the latter 15 years later) but I thought it was original and challenging. However, Superfreakonomics, their second book, was much less good. It seemed to me to consist of ideas and studies not quite good enough to make the first book. I worried that Think Like a Freak would be like that, only worse.
I was also worried because of the sheer volume of books about behaviour that have come out in the past five years, many of them not that good.
I was pleasantly surprised. Think Like a Freak is captivating. It's intellectually robust, funny, surprising and wise. What else can one ask from a book? It doesn't take long at all to read. I consumed it in two goes, splitting it in half like one of Kobi's hot dogs.
It isn't a classic, because Freakonomics itself takes that prize and this one plays with the same ideas, but it is certainly one you will wish to read if you enjoyed the first book.
The rules for freaky thinking
Incentives are the cornerstone of modern life. And understanding them - or, often, deciphering them - is the key to understanding a problem, and how it might be solved.
Knowing what to measure, and how to measure it, can make a complicated world less so. There is nothing like the sheer power of numbers to scrub away layers of confusion and contradiction, especially with emotional, hot-button topics.
The conventional wisdom is often wrong. And a blithe acceptance of it can lead to sloppy, wasteful, or even dangerous outcomes.
Correlation does not equal causality. When two things travel together, it is tempting to assume that one causes the other. Married people, for instance, are demonstrably happier than single people; does that mean marriage causes happiness? Not necessarily. As one researcher memorably put it: "If you're grumpy, who the hell wants to marry you?"
(London Times 3)
When the brains behind the bestselling Freakonomics books delivered the latest instalment of their mind-bending social theories, their American publisher was appalled.
The opening chapter of Think Like a Freak, by Stephen Dubner and Steven Levitt, includes a lengthy anecdote about a meeting with David Cameron, who at the time was preparing himself to become Britain's prime minister.
The last chapter, some 180 pages later, begins with Britain's darkest hour, as Adolf Hitler was advancing across Europe in 1941 and another British prime minister, Winston Churchill, stood in his way. The authors take issue with Churchill's oft-quoted assertion that we should 'never give in, never, never, never - in nothing, great or small, large or petty'.
"When I turned in that final chapter and our publisher saw that it began with Churchill, well, that was a bone of contention," Dubner recalled in New York last week. Why on earth would American readers expecting shiny new 21st-century ideas want to dwell on these dreary English politicians? The publisher growled at Dubner: "No more British prime ministers."
Yet Downing Street turns out to have played an intriguing role in the third volume of a hugely popular series that turns mundane scientific data into a crowd-pleasing circus of constantly surprising and challenging ideas.
Dubner, a New York journalist, and Levitt, a Chicago economist, are the authors whose early books dreamt up appropriately freakish connections between suicide bombers and life insurance salesmen; between the crime rate and the availability of abortion; and who keep asking awkward questions about things that most of us never pause to consider - such as whether child car seats really make children safer (they are a waste of time and money, the authors concluded).
In their new book they are up to all their old tricks, tackling everything from Romanian witches to Japanese hot-dog-eating champions, and the curious case of the Nigerian email scammers who are familiar to almost everybody, yet who still persist in announcing themselves as Nigerians (they want to attract only the tiny minority of email users who have not heard of Nigerian scams).
Critics may carp that Dubner and Levitt traffic in gimmicky ideas that do little to solve serious economic issues, but Freakonomics and its sequel, SuperFreakonomics, have together sold 7m copies - more than 1.6m of them in Britain. 'We sell more books per capita to the British than any other country in the world,' Dubner tells me proudly.
Their beguiling combination of clever thinking and snappy writing has not only earned them potloads of loot, it has provided them with a reputation for creative problem-solving, such as when to break up with a girlfriend, or how to reorganise Britain's NHS, a thankless task the authors liken to drop-kicking one of the Queen's corgis.
Enter Cameron, the prime minister-in-waiting featured in chapter one. It turns out that Cameron is a prospective freakthinker whose aides have read the first two Freakonomics books and who are keen to expose their boss to some radical American ideas.
'All right,' boomed Cameron, bursting into a conference room where Levitt and Dubner were waiting. 'Where are the clever people?'
The meeting quickly went horribly wrong when the American authors tried to get Cameron to consider the NHS in different terms. What if Britons were provided with a free, unlimited, lifetime supply of transportation? they asked. Free buses, free trains, free cars for everyone? Of course that would be ludicrous. But is it not just as ludicrous that all healthcare should be free?
Perhaps not surprisingly, Cameron failed to embrace the notion of a fee-charging NHS. 'The smile did not leave Cameron's face, but it did leave his eyes,' the authors write. Soon after that their meeting was over.
Yet Levitt and Dubner still believe they had an impact on the Tory leader's thinking. Sitting in their office overlooking Central Park last week, Levitt, the data guy, and Dubner, a former New York Times reporter, declared a sneaking admiration for Cameron, and a broader appreciation of Britain's love of eccentrics.
"If we had a 'think-like-a-freak' hall of fame, David Cameron would definitely be in it," said Levitt. "His administration has since proved to be the most think-like-a-freak government in history, with their willingness to use data and their experimentation with his behavioural insights team."
To be sure, these were mostly tiny initiatives dreamt up in an obscure corner of Cameron's government. Yet Dubner thought of devoting a chapter to Britain's so-called 'nudge unit', the Cabinet Office team of social scientists seeking clever new ways of 'nudging' Britons into making better decisions.
A willingness to experiment is central to what the authors call 'thinking like a freak', and they have both been profoundly impressed with the nudge unit's efforts in fields as varied as persuading Britons to insulate their attics, to become organ donors or to pay their court fines on time.
"The Brits found ways to make huge increases in pro-social behaviour with cheap, clever means," Dubner said. "That is the ultimate in thinking like a freak."
Despite his editor's frustration with all these British examples, Dubner could not resist dragging Churchill into his final argument that sometimes surrender is best.
"If you are a prime minister of a great nation that is facing extinction, fighting to the death is indeed the best option," they write. "But for the rest of us the stakes aren't usually so high. There is in fact a huge upside to quitting, and we suggest you give it a try."
The Freakonomics notion that it is often better to give up than waste valuable energy on hopeless causes is typical of the authors' contrarian approach. Yet it gets harder when readers come to expect the unexpected.
Several American critics have noted that had the authors stuck to their own guide for freakish thinking, they might have avoided the well-trodden path of a sequel to an ageing formula. "This is how brands end, with the sound of scraping the bottom of a barrel," one US critic observed.
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