Gut feelings | Gerd Gigerenzer

Published: 2007

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Gerd Gigerenzer is a German professor of psychology at the Max Planck Institute for Human Development. Throughout his career, he has studied people’s gut feelings. Our gut feeling is not based on wild guesses but on careful techniques refined by the evolution of the brain. The book’s main point is that decisions made with gut feeling can be at least as good as carefully thought out decisions.

GUT FEELINGS ARE BASED ON RULES OF THUMB. The gut feeling is our intuition and what we get a “feeling” about. It is something that gives a judgment that (1) quickly comes to one’s consciousness, (2) whose underlying explanations we do not really understand and (3) is strong enough to act on. The gut feeling is based on rules of thumb (what in psychology is called heuristics). It is usually affected by simple signals in our immediate environment. When a person follows his instincts, he follows these signals and ignores other superfluous information.     

“Intuition, it seems, is not some sort of mystical chemical reaction but a neurologically based behavior that evolved to ensure that we humans respond quickly when faced with a dilemma”

SATISFIERS > MAXIMIZERS. Experiments have shown that carefully considered choices usually make us less happy than quicker decisions. Solving problems by carefully pointing out the pros and cons of each side against each other usually does not make the best decisions. The classic rational decision-maker is a “maximizer” but in reality we are “satisfiers”. Satisfiers have higher zest for life and self-confidence while maximizers more often become depressed or suffer from perfectionism.

“Trust your hunches, for intuition does have an underlying rationale, according to this accessible account.”

LESS IS MORE. A study has shown that German students are better than American students at guessing which city is the largest, Milwaukee or Detroit. This is despite – or because of – the fact that American students know much more about the cities in question. The Germans relied on recognition heuristic that the city with a familiar name was probably the largest city. This rule of thumb has also been tested in the financial markets with the same result. Individuals who selected portfolio candidates after recognition performed better than analysts with deep knowledge of each individual company.   

“It is common credo that in predicting the future, one should use as much information as possible and feed it into the most sophisticated computer. A complex problem demands a complex solution, so we are told. In fact, in unpredictable environments, the opposite is true.”

DON’T THINK TOO MUCH. When we are faced with choices in a subject that we master, we should make relatively quick decisions. Studies have shown that we tend to make worse decisions the longer the reflection time we have when we act within our areas of expertise. Our first choice, delivered by our subconscious, is in these cases usually the best choice. Less is more also applies to information. The more variables we have to base a decision on, the worse the outcome will usually be.

THE DEFAULT OPTION MATTER. We humans prefer the default mode over going a new way. How systems are structured can have major effects on our behavior. For example, very few Americans are organ donors, while the majority of Germans are. The difference is not that the Americans think of themselves and the Germans think of their fellow human beings. The difference is that in the US the default mode is not to be an organ donor, in contrast to Germany where the default mode is to be it.

TIT-FOR-TAT. A good rule of thumb for decisions in social contexts is the “tit for tat” method. It means that if we are the first to act, we choose the friendly alternative, we adopt a “one-decision memory” and imitate our opponent’s latest moves. If our partner plays friendly against us, we play friendly back – and vice versa. The basic situation is to be kind to the opponent, but at the same time not be forgiving if he tries to exploit us. One variant is “tit for two tat” – to be prepared to forgive a wrong game once. Game theory studies have shown that these two strategies usually come out as winners, in many different variants of games.

“In general, cooperation pays, forgetting pays, and imitation pays. And, most important, the combination pays.”

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