What You Will Learn

Noise

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Episode notes

In this book, Kahneman, Sibony, and Sunstein break down the concept of noise in human judgement and how it impacts our society. Medicine is noisy. Faced with the same patient, different doctors make different judgments about the diagnosis.   Forecasts are noisy. Professional forecasters offer highly variable predictions. Whether it's about the popularity of a new product, the change in the unemployment rate, the likelihood of bankruptcy of a particular company, or the results of the next election.  Asylum decisions are noisy. Whether an asylum seeker will be admitted to the United States is like a lottery of which judge you get – some judges granted 5% of cases while others granted 88% of cases.  Wherever you look at human judgements, you are likely to find noises. In real-world decisions, the amount of noise is often scandalously high. So, to improve the quality of our judgments, we need to not only overcome bias but also overcome noise.   

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