Daniel Kahneman makes us smarter (again)

by Eric Drexler on 2013/03/10

Edge asks: What Scientific Concept Would Improve Everybody’s Cognitive Toolkit?
Daniel Kahneman offers the first answer:

Daniel Kahneman

Recipient, Nobel Prize in Economics, 2002; Eugene Higgins Professor of Psychology; Author, Thinking Fast and Slow

Focusing Illusion

“Nothing In Life Is As Important As You Think It Is, While You Are Thinking About It”

Education is an important determinant of income — one of the most important — but it is less important than most people think. If everyone had the same education, the inequality of income would be reduced by less than 10%. When you focus on education you neglect the myriad other factors that determine income. The differences of income among people who have the same education are huge.

Income is an important determinant of people’s satisfaction with their lives, but it is far less important than most people think. If everyone had the same income, the differences among people in life satisfaction would be reduced by less than 5%.

Income is even less important as a determinant of emotional happiness. Winning the lottery is a happy event, but the elation does not last. On average, individuals with high income are in a better mood than people with lower income, but the difference is about 1/3 as large as most people expect. When you think of rich and poor people, your thoughts are inevitably focused on circumstances in which their income is important. But happiness depends on other factors more than it depends on income.

Paraplegics are often unhappy, but they are not unhappy all the time because they spend most of the time experiencing and thinking about other things than their disability. When we think of what it is like to be a paraplegic, or blind, or a lottery winner, or a resident of California we focus on the distinctive aspects of each of these conditions. The mismatch in the allocation of attention between thinking about a life condition and actually living it is the cause of the focusing illusion.

Marketers exploit the focusing illusion. When people are induced to believe that they “must have” a good, they greatly exaggerate the difference that the good will make to the quality of their life. The focusing illusion is greater for some goods than for others, depending on the extent to which the goods attract continued attention over time. The focusing illusion is likely to be more significant for leather car seats than for books on tape.

Politicians are almost as good as marketers in causing people to exaggerate the importance of issues on which their attention is focused. People can be made to believe that school uniforms will significantly improve educational outcomes, or that health care reform will hugely change the quality of life in the United States — either for the better or for the worse. Health care reform will make a difference, but the difference will be smaller than it appears when you focus on it.

The most recent Edge annual question:
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{ 2 comments… read them below or add one }

Mark Weiss May 2, 2013 at 8:40 pm UTC

There’s a lecture coming up at Stanford about “Buddha and Green Goo” sic which led me here. Thanks.

There is also a movie called “Welcome to Dopeland” by a former Grateful Dead videographer that uses “grey goo” as the maguffin.

Duly noted we are all living in 1986 or so….

Indeed. The goo mania seems to have grown largely from a 1986 article in OMNI (with one million readers, and the “goo” idea highlighted and presented as a critical threat) and not so much from Engines of Creation (with a few tens of thousands of readers in the earlier years, and the idea mentioned, then concerns answered and then set aside as relatively unimportant). Then the OMNI article was forgotten, and the cultural residue stuck to Engines.
— Eric

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