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Why people behave oddly

American author Michael Lewis' book looks at the lives and work of psychologists Daniel Kahneman and Amos Tversky, who are experts in human irrationality

THE UNDOING PROJECT: A FRIENDSHIP THAT CHANGED THE WORLD

By Michael Lewis

Penguin-Allen Lane/Hardcover/ 352 pages/$44.89 a copy with GST from leading bookstores

Last Sunday, a new year dawned and, with it, dread spread about the fallouts from the bamboozling Donald Trump becoming President of the United States from Jan 20 and Britain leaving the European Union.

Why have so many Americans and Britons made these seemingly irrational choices ?

The Undoing Project by American author Michael Lewis, of Liar's Poker, The Big Short and Flashboys fame, proffers answers.

In it, Lewis chronicles the lives and work of Israeli-American psychologists Daniel Kahneman and Amos Tversky, the foremost experts on human irrationality.

Kahneman was chalk to Tversky's cheese, but for almost 20 years, they forged a scholarly partnership to demystify why it was that, contrary to the belief of economists, people usually behaved most irrationally.

The duo's disproving of eco- nomists' established assumptions kept them in the academic wilderness for many years, but they are now lauded for their groundbreaking theories about decision-making.

Kahneman, better known for his 2011 book Thinking, Fast And Slow, won the Nobel economics prize in 2002 for the duo's findings.

Large-living Tversky died of cancer in 1996, 10 years after he and the reticent Kahneman fell out specta- cularly over each other's perceived disloyalties.

Among their many startling insights into decision-making, they found that people make decisions based not on how much they will benefit from the decision, but how little they will regret it.

  • FIVE QUESTIONS THIS BOOK ANSWERS

  • 1 What should you do when you do not know what to do?

    2 What is someone really hoping to do when he or she makes decisions?

    3 How is judgment different from decision- making and why does it matter?

    4 Why does everyone dislike uncertainty?

    5 How might you best deal with anything that is urgent, but not important?

The "undoing" in the book's title refers to the duo's key finding about the way people cope with abject loss. They do so by fantasising about what might have been, thus "undoing" their memory of the loss.

But that does not work for tragedies writ large such as a tsunami, because such realities are too big for the mind to blot out.

Lewis, for one, is wishing that his fellow Americans could undo Trump's triumph.

In a telephone interview on Dec 15 from London, where he was promoting the book, he told The Sunday Times: "I want to apologise for my country to Singapore. But we're going to try to figure this out... by organising ourselves to defend ourselves against our own president... to compensate for the idiocy of the man we elected."

Being ebullient, he also gave an optimistic take, saying that Mr Barack Obama "came into office with pretty good public support and he was very well-liked generally.

"But he wasn't able to do some things because they (bureaucrats) just really make it hard for the president to do a lot of big, bold things right and so maybe it will make it very hard for Mr Trump to do anything because he is not popular even though he's a protest candidate... So it's possible that he won't be able to get anything done - and that would be nice."

  • Decide to meet on Jan 25

  • This year's first Big Read Meet will focus on Michael Lewis' The Undoing Project, which celebrates the lives and work of Daniel Kahneman, of Thinking, Fast And Slow fame, and his late collaborator Amos Tversky, whom friends nicknamed Famous Amos.

    Join senior writer Cheong Suk-Wai to discuss their theory about decision-making on Jan 25 from 6.30pm in the Central Public Library, Basement 1, National Library Board (NLB) headquarters at 100 Victoria Street.

    Sign up at any NLB e-Kiosk.

For now, he said Mr Trump and Brexit were "the political equivalent of the financial collapse in 2008".

Moving to change of another sort, The Big Read will move to Tuesdays in Life from Jan 24.

The Big Read Meet will run as usual every last Wednesday of the month.


Just a minute

THE GOOD

1. The American writer Michael Lewis has, true to form, delivered another cracking read with The Undoing Project. Lewis has a knack for explaining complex ideas simply yet accurately. He is a powerful storyteller, with a keen eye for details and nuances that he uses to transform a narrative of two men and their theory into a thriller about the joys of discovery. Lewis interviewed several hundred people, multiple times in some cases, over eight years and his diligence has paid off handsomely.

2. This book is packed with learning on many levels. First, it is a study of how to collaborate well with others, especially when they are diametrically opposed to you. Second, it is a cautionary tale of how insisting on certainty can lead everyone astray. Economists, in particular, with their long insistence on rationality and predictability, are skewered in this work. Third, it is a manual on how to thrive when the odds are against you. And, last but not least, like so many of Lewis' other books, it is a masterclass in how to break down difficult ideas into digestible nuggets, without dumbing down.

3. As the book focuses on the lives and work of two 20th- century Israeli-Americans, namely Nobel economics prize-winner Daniel Kahneman and the late Amos Tversky, it proves a valuable contribution to literature on the Holocaust and its aftermath, especially with regard to the flight of Jewish eggheads from Europe to the United States.

4. Lewis includes a few intriguing decision-making puzzles by Kahneman and Tversky for everyone to experience the duo's lessons first-hand.

THE BAD

1. Lewis castigates German evolutionary psychologist Gerd Gigerenzer, who is a trenchant critic of Kahneman and Tversky. Yet there is no record in this book of Lewis attempting to ask Gigerenzer why he thinks that way about the duo's work. Instead, Lewis asserts that Gigerenzer's approach is necessarily wrong, which throws the book's balance off somewhat.

THE IFFY

1. In his 2004 book Moneyball, which looked at how inaccurately the American market valued baseball talents, Lewis missed the point that such talents were either underestimated or overvalued simply because those who were judging them did so based on emotions, not logic. So Lewis wrote The Undoing Project partly to correct his oversight, resulting in an opening chapter chock-a-block with baseball and other sports anecdotes, which non-fans will likely find tiresome.


Fact file: No naked women in bathtubs in his book

Most authors would be miffed if anyone tried to make movies about their books - without staying faithful to what they had written.

But the American writer Michael Lewis, 56, whose book The Big Short became an Oscar-nominated film last year, did not mind that its makers deviated quite a bit from what he wrote - including featuring "beautiful naked women in bathtubs" in the film who were nowhere in his book.

The Big Short, which he published in 2011, is a Noughties sequel to his first book, Liar's Poker, his 1989 tell-all about 1980s Wall Street culture into which he, a 24-year-old trader with Salomon Brothers, was sucked.

He tells The Sunday Times: "The Big Short Oscar nomination did not change my view about my work, but it did change my view of Hollywood. I didn't imagine that the movie fellows could make a movie about The Big Short because I thought there was too much that needed to be explained and a movie is not easily very good at explaining things."

The married father of three was also concerned about how they could portray the characters in his book sympathetically.

"Audiences don't particularly like Wall Street guys, so I thought the combination was deadly. But it was amazing what the (film-makers) did with it and it made me think that there is nothing that cannot be turned into a movie."

Asked how writing his latest book The Undoing Project, which features Jewish psychologists Daniel "Danny" Kahneman and Amos Tversky, compared with writing The Big Short, he said: "The thing that makes it hard to get information out of Wall Street people is that they're afraid that they are going to get into trouble for what they said.

"When I was interviewing Danny, he wasn't afraid that he would get into trouble, but he was a far less direct person, so he never answered any question I asked him, but always answered some other question."

Lewis never got to interview Tversky, who had died of cancer in 1996, aged 59.

But he did talk to Tversky's family and friends for the book.

A version of this article appeared in the print edition of The Sunday Times on January 08, 2017, with the headline 'Why people behave oddly'. Print Edition | Subscribe