Professor Noreena Hertz: Complex world, simple decisions? | Notenstein Private Bank ‒ your Swiss private bank
My first introduction to Noreena Hertz through an interesting dialogue from Notenstein.
It starts of with a few observations on the current world geopolitical situation, but the bulk seems to be around decision making and the arguments she likely outlines in her recent book.
On the geopolitical side, there are some insightful takeaways from recent events
- "Governments and regulators appear increasingly willing to change the rules without warning. This makes planning and predicting more and more challenging…."
- "whereas for most of the past twenty-five years the sense was that politics was moving towards the centre ground, what we have seen over the past few years, in European domestic politics at least, is instead a steady rise of extreme voices on the right as well as the left."
- we are a "multi-polar and increasingly fractured" world, making our economy more fragile than many perhaps assume, despite the great recession
Notenstein then lays up for the book, 'Eyes wide shut'. In an environment where we have never before spent so much time consuming so much information, how do we distill the information that can help us make good decisions.
I have not yet read it, but she references some useful points about decision making and our trust in experts. "Indeed, in a seminal study of 82,000 expert predictions – predictions made by economists, political scientists, historians – over a period of 16 years, researchers found that experts got no more right than a monkey randomly sticking a pin on a board." (i assume the reference for this is in the book).
I do agree that so called experts are as prone to behavioral decision making traps as the rest of us, and like the two ideas she shares on how to spot and challenge the best input
Firstly, instead of experts who analyze and judge as if from the balcony, Hertz stresses the potential for better insights coming from "what the Nobel Prize winning economist Friedrich Hayek called “local knowledge” – the dispersed wisdom of those on the ground"
Secondly, do not underestimate the importance of a 'Challenger-in-Chief'.
Summing up, we must take advantage of the abundance of data and signal around us, but "It’s imperative to continue to use multiple sources and also for humans to remain integral to the data-analysis process."
A related article with good examples on human biases is:
Asleep at the wheel: what makes us human is our irrationality: Asleep at the wheel: what makes us human is our irrationality We are drawn to some types of information over others, our past experiences shape our present-day judgements and our emotional and physical states affect the choices we make.
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| http://billyshall.com/blog/post/analysis-paralysis |
It starts of with a few observations on the current world geopolitical situation, but the bulk seems to be around decision making and the arguments she likely outlines in her recent book.
On the geopolitical side, there are some insightful takeaways from recent events
- "Governments and regulators appear increasingly willing to change the rules without warning. This makes planning and predicting more and more challenging…."
- "whereas for most of the past twenty-five years the sense was that politics was moving towards the centre ground, what we have seen over the past few years, in European domestic politics at least, is instead a steady rise of extreme voices on the right as well as the left."
- we are a "multi-polar and increasingly fractured" world, making our economy more fragile than many perhaps assume, despite the great recession
Notenstein then lays up for the book, 'Eyes wide shut'. In an environment where we have never before spent so much time consuming so much information, how do we distill the information that can help us make good decisions.
I have not yet read it, but she references some useful points about decision making and our trust in experts. "Indeed, in a seminal study of 82,000 expert predictions – predictions made by economists, political scientists, historians – over a period of 16 years, researchers found that experts got no more right than a monkey randomly sticking a pin on a board." (i assume the reference for this is in the book).
I do agree that so called experts are as prone to behavioral decision making traps as the rest of us, and like the two ideas she shares on how to spot and challenge the best input
Firstly, instead of experts who analyze and judge as if from the balcony, Hertz stresses the potential for better insights coming from "what the Nobel Prize winning economist Friedrich Hayek called “local knowledge” – the dispersed wisdom of those on the ground"
Secondly, do not underestimate the importance of a 'Challenger-in-Chief'.
Summing up, we must take advantage of the abundance of data and signal around us, but "It’s imperative to continue to use multiple sources and also for humans to remain integral to the data-analysis process."
A related article with good examples on human biases is:
Asleep at the wheel: what makes us human is our irrationality: Asleep at the wheel: what makes us human is our irrationality We are drawn to some types of information over others, our past experiences shape our present-day judgements and our emotional and physical states affect the choices we make.
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