I just finished the chapter in Kahneman’s book on reasoning that dealt with “taming intuitive predictions.” Basically, we make predictions that are too extreme, ignoring regression to the mean, assuming the evidence to be stronger than it is, and ignoring other variables through a phenomenon called “intensity matching.”
Here’s an example (not from the book; made up by me):
Jane is a ferociously hard-working student who always completes her work well ahead of time.
What GPA do you think she graduates college with? Formulate it in your mind, an actual number.
So Kahneman explains “intensity matching” as being able to toggle back and forth intuitively between variables. If it sounds like Jane is in the top 10% in motivation/work ethic, she must be in the top 10% in GPA. And our mind is pretty good at adjusting between those two. I’m going to pick 3.7 as the intuitive GPA number; if yours is different you can substitute it in below.
Kahneman says this is biased because you’re ignoring regression to the mean, another way of saying that GPA and work ethic aren’t perfectly correlated. so here’s a model to use Kahneman’s trick for taming your prediction.
GPA = work ethic + other factors
What is the correlation between work ethic and GPA? Let’s guess .3 (It can be whatever you think is most accurate).
Now what is the average GPA of college students? Let’s say 2.5? (Again, doesn’t matter).
Here’s Kahneman’s formula for taming your intuitive predictions:
0.3(3.7-2.5)+2.5 = statistically reasonable prediction
So apply the correlation between GPA and work ethic to the difference between your intuitive prediction and the mean, and then go from the mean in the direction of your intuition by that amount.
I played around with some different examples here because my intuition was grappling with some issues around luck vs. static variables, but those aside, this is a neat way to counter one’s bias in the face of limited information.
I can’t help but wonder, though, if the knowledge that this exercise was designed to counter bias led anyone to avoid or at least temper intensity matching. In other words, what were your intuitions for the GPA she’d have after just reading the description of her hard work? Did the knowledge that you were biased lead you to a lower score than the one I mentioned?
Here’s what I’m getting at… If it’s possible (and this is just me riffing right now) to dial down your biases (either consciously or not) when the issue of bias is on your mind, it would seem possible that one’s intuitions could be dialed down going into this exercise, at the point of the original GPA intuition, which could ruin the outcome. Put another way, the math above relies on accurate intensity matching which is itself a bias! If someone were able to come into this with that bias dialed down, they might actually end up with a worse prediction if they also did Kahneman’s suggested process.