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Here is the Mind and Matter column in the Wall Street Journal,
published on 24th December.
Which American city has more inhabitants: San Antonio or San
Diego? More Germans than Americans get the answer right (San
Diego). What about Hanover or Bielefeld? More Americans than
Germans get the answer right (Hanover). In each case, the
foreigners pick the right answer by choosing the city they have
heard more about, assuming that it's bigger. The natives know too
much and let the excess information get in the way.
This is an example of a "heuristic," a highfalutin name for a
"rule of thumb" or "gut feeling." Most business people and
physicians privately admit that many of their decisions are based
on intuition rather than on detailed cost-benefit analysis. In
public, of course, it's different. To stand up in court and say you
made a decision based on what your thumb or gut told you is to
invite damages. So both business people and doctors go to some
lengths to suppress or disguise the role that intuition plays in
Prof. Gerd Gigerenzer, the director of the Max Planck Institute
for Human Development in Berlin, thinks that instead they should
boast about using heuristics. In articles and books over the past
five years, Dr. Gigerenzer has developed the startling claim that
intuition makes our decisions not just quicker but better. He
rejects the notion that hunches are second best, trading off
accuracy for effort to achieve decisions that are "good enough" but
As Dr. Gigerenzer sees it, complex problems do not necessarily
need complex solutions, and more detailed analysis does not
necessarily improve a decision, but often makes it worse. He
believes, in effect, that less is more: Extra information distracts
you from focusing on the few simple aspects of a problem that
A baseball player running to catch a fly ball is not behaving,
even unconsciously, as if he were solving differential equations to
work out where the ball will land. He is following a simple rule:
Keep the angle of the falling ball constant in your vision and
adjust your running speed accordingly. It's the same trick used by
dragonflies catching flies.
When Jeffrey Skiles, the co-pilot of the plane that made an
emergency landing in the Hudson River in January 2009, explained
how he and his captain decided that an airport landing was
impossible, he described the same "gaze heuristic": The angle of
the plane's descending glide made the airport appear to rise in
their windscreen view-clearly signaling that a landing there was
The economist Harry Markowitz won the Nobel prize for designing a
complex mathematical formula for picking fund managers. Yet when he
retired, he himself, like most people, used a simpler heuristic
that generally works better: He divided his retirement funds
equally among a number of fund managers.
A few years ago, a Michigan hospital saw that doctors, concerned
with liability, were sending too many patients with chest pains
straight to the coronary-care unit, where they both cost the
hospital more and ran higher risks of infection if they were not
suffering a heart attack. The hospital introduced a complex
logistical model to sift patients more efficiently, but the doctors
hated it and went back to defensive decision-making.
As an alternative, Dr. Gigerenzer and his colleagues came up with
a "fast-and-frugal" tree that asked the doctors just three
sequential yes-no questions about each patient's
electrocardiographs and other data. Compared with both the complex
logistical model and the defensive status quo, this heuristic
helped the doctors to send more patients to the coronary-care unit
who belonged there and fewer who did not.
It is no surprise that in the wake of the great financial crisis,
financial regulators are beating a path to Dr. Gigerenzer's door.
The complex algorithms that gave AAA ratings to debts that should
not have passed the smell test demonstrated all too well the
futility of knowing too much.
For a video showing Gigerenzer presenting his ideas in a lecture,