Think Like A Freak
I go on exploring the books that help us think better. Books that don’t teach WHAT to think, but HOW to think about things. "Think Like a Freak" is one of them.
Steven Levitt and Stephen Dubner offer a few ideas which are nothing but common sense yet feel so fresh, unconventional, and iconoclastic. Full of interesting stories, this book is an encouragement to rewire our thinking habits and think "a bit differently, a bit harder, a bit more freely".
My Key Takeaways
What Does It Mean to Think Like a Freak?
The book builds on a few key ideas the authors had explored in their previous books:
Incentives rule the world. Understanding the incentives is the key to understanding a problem, and how it might be solved.
Knowing what to measure, and how to measure it, can make the complicated world less so.
The conventional wisdom is often wrong.
Correlation does not equal causality.
Story: Aiming the penalty kick in the center.
A bold and seemingly absurd move has the highest chances to win. Yet so few do it.
Question: is winning the game your truest incentive?
My Favourite Quote:
We’d like to bury the idea that there’s a right way and a wrong way to solve a given problem, a smart way and a foolish way, a red way and a blue way. The modern world demands that we all think a bit more productively, more creatively, more rationally; that we think from a different angle, with a different set of muscles, with a different set of expectations; that we think with neither fear nor favor, with neither blind optimism nor sour skepticism. That we think like a Freak.
2. The Three Hardest Words in the English Language
"I don't know".
Problem #1. How we define "What we know". It includes both known facts and beliefs. Beliefs are not easy to verify and can be shaped by political, social, and religious views.
Problem #2. We routinely pretend to know more than we do. This is true for anyone, and not in the least for "experts".
Story: Tetlock's studies of predictions by experts
How accurate were they? "Not much better than the dart-throwing chimps"
Why is the world of politics and business continues to be so full of wild guesses posing as fact?
Because bluffers usually get away with it.
And because, in the first place, the cost of saying "I don't know" is higher than the cost of being wrong - at least, for the individual. Every time we pretend to know something, we are protecting our own reputation rather than promoting the collective good.
My Favourite Quote:
When it comes to solving problems, one of the best ways to start is by putting away your moral compass. Why? When you are consumed with the rightness or wrongness of a given issue—whether it’s fracking or gun control or genetically engineered food—it’s easy to lose track of what the issue actually is. A moral compass can convince you that all the answers are obvious (even when they’re not); that there is a bright line between right and wrong (when often there isn’t); and, worst, that you are certain you already know everything you need to know about a subject so you stop trying to learn more.
Story: Newspaper ads without a feedback loop
So, how can we really know something? By getting feedback.
The more complex the problem is, the harder it is to capture good feedback.
In this story, the company spent millions on newspaper adverts, yet did not really get feedback if their strategy worked. It is by having accidentally missed printed ads in one major city, they saw that the ads did not influence sales numbers. And even then, they did not bother.
To get feedback, we need to run good experiments. What is a good experiment?
Story: Robin Goldstein's wine experiments
Field experiment beats lab experiment.
Wine tasting experiments
Creating a fictional restaurant and getting an award for a mediocre wine list (morale: most awards are just advertising schemes)
My Favourite Quote:
Rather than trying to mimic the real world in a lab, take the lab mind-set into the real world. With a field experiment, you can randomize to your heart’s content, include more people than you could ever fit in a lab, and watch those people responding to real-world incentives rather than the encouragements of a professor hovering over them. When done well, field experiments can radically improve how problems get solved.
My Favourite Quote:
A lot of obvious ideas are only obvious after the fact—after someone has taken the time and effort to investigate them, to prove them right (or wrong). The impulse to investigate can only be set free if you stop pretending to know answers that you don’t. Because the incentives to pretend are so strong, this may require some bravery on your part. The next time you run into a question that you can only pretend to answer, go ahead and say “I don’t know”—and then follow up, certainly, with “but maybe I can find out.” And work as hard as you can to do that. You may be surprised by how receptive people are to your confession, especially when you come through with the real answer a day or a week later.
3. What's your problem?
My Favourite Quote:
Whatever problem you’re trying to solve, make sure you’re not just attacking the noisy part of the problem that happens to capture your attention. Before spending all your time and resources, it’s incredibly important to properly define the problem—or, better yet, redefine the problem.
Story: Takeru Kobayashi, a competitive eater
Kobayashi redefined the problem he was trying to solve. What question were his competitors asking? It was essentially: How do I eat more hot dogs? Kobayashi asked a different question: How do I make hot dogs easier to eat?
The second lesson to be drawn from Kobayashi’s success has to do with the limits that we accept, or refuse to. The previous records can be artificial barriers.
4. The Truth is in the Roots
My Favourite Quote:
It takes a truly original thinker to look at a problem that everyone else has already looked at and find a new avenue of attack. Why is this so rare? Perhaps because most of us, when trying to figure out a problem, gravitate toward the nearest and most obvious cause. Rather than address their root causes, we often spend billions of dollars treating the symptoms and are left to grimace when the problem remains. Thinking like a Freak means you should work terribly hard to identify and attack the root cause of problems… It can be unsettling, even frightening, to stare a root cause in the eye. Maybe that’s why we so often avoid it. That may not be a simple conversation. But when you are dealing with root causes, at least you know you are fighting the real problem and not just boxing with shadows.
Stories:
Root Causes of ethnic conflicts in Africa: colonizers defined country borders by landmass and water, ignoring ethnic groups.
Possible root causes of the elevated rate of heart disease of African Americans - possibly going back to slavery times
Barry Marshall and his discovery of the bacterial root cause of the ulcer. Until his discovery, an $8bn industry was treating the symptoms. That's why it took years for the ulcer proof to fully take hold - the resistance from the industry was enormous.
5. Think like a Child
My Favourite Quote:
When it comes to generating ideas and asking questions, it can be really fruitful to have the mentality of an eight-year-old. Consider the kind of questions that kids ask. Sure, they may be silly or simplistic or out of bounds. But kids are also relentlessly curious and relatively unbiased. Because they know so little, they don’t carry around the preconceptions that often stop people from seeing things as they are.
Think like a child means:
Think small: small questions are asked less often, it’s virgin territory for learning. Solving big problems is often tilting at windmills.
Don’t be afraid of the obvious. Sometimes a solution comes from asking a question an insider would not deign to ask.
Have fun. Having fun does not mean you aren’t serious. "If you love what you do, then you'll want to do more of it, you'll think about it before you go to sleep and as soon as you wake up; your mind is always in gear. When you're that engaged, you'll run circles around other people even if they are more naturally talented. Rather than dismiss fun, why not co-opt it for the greater good?
6. Like Giving Candy to a Baby
People respond to incentives.
Understanding the incentives of all players in a given scenario is a fundamental step in solving any problem.
Thinking like a Freak is to be a master of incentives - the good, the bad, and the ugly.
When it comes to financial incentives, size matters.
Beware of the gap between declared and revealed preferences: we'll often say one thing and do another.
Experiments help in determining someone's true incentives (Story: Cialdini's experiments - the herd mentality incentive beats out the moral, social, and financial incentives).
My Favourite Quote:
With any problem, it's important to figure out which incentives actually work, not just what your moral compass tells you shouldwork. The key is to think less about the ideal behaviour of imaginary people and more about the actual behaviour of real people.
Story: Mullaney's once-and-done charity giving strategy
Relationship frameworks
financial;
us-versus-them;
loved-one;
authority figure.
You can get into trouble by getting your frames mixed up.
But it can also be incredibly productive to nudge a relationship from one framework into another. Stories: Ping-Pong diplomacy, Zappos
Incentives may fail (e.g. license plate numbers restrictions, pollution cuts) - the cobra effect
Rules to design an effective incentives scheme:
Figure out what people really care about, not what they say they care about.
Incentivize them on the dimensions that are valuable for them but cheap for you to provide.
Pay attention to how people respond; learn from surprises and frustrations.
Create incentives that switch the frame from adversarial to cooperative.
Never ever think that people will do something just because it is the "right" thing to do.
Some people will do everything to game the system. Try to applaud their ingenuity.
7. What do King Solomon and David Lee Roth Have in Common?
Stories: Sifting the guilty from the innocent.
Solomon & 2 women;
No brown M&M’s on Van Halen's tour rider
Game theory: beat your opponent by anticipating his next move. Tools that can entice a guilty party to unwittingly reveal his guilt through his own behavior. "Teach your garden to weed itself".
Stories: unnecessarily onerous job application process, Zappo's 2,000 to quit, secret bullet factory in Israel, Nigerian scam emails.
8. How to Persuade People Who Don't Want to Be Persuaded
Understand how hard persuasion can be - and why
Being confident you are right is not the same as being right.
Thaler & Sunstein: rather than try to persuade people of the worthiness of a goal, it's more productive to essentially trick people with subtle cues on new default settings.
If your argument does not resonate with the recipient, you won't get anywhere.
Don't pretend your argument is perfect. If you want your argument to be taken seriously, you'd do well to admit the potential downsides, as well as the potential for unintended consequences.
Acknowledge the strength of your opponent's argument.
Keep the insults to yourself. Negative information weighs more heavily on the brain.
Tell stories. Stories are the most powerful form of persuasion. Stories are not anecdotes. Stories create deep resonance. Stories capture our attention.
9. The Upside of Quitting
My Favourite Quote:
There is a huge upside to quitting when done right.
Three forces that bias us from quitting:
Belief that quitting is a sign of failure.
Sunk costs, throwing good money after bad
Tendency to focus on concrete costs and pay too little attention to opportunity costs.
Failure is a necessary part of innovation.
Idea: premortem, when we try to find out everything that might go wrong before it’s too late. Premortem can be even more useful if we offer anonymity.
Story: flipping a coin to decide on important matters.
Story: both authors' quitting stories
My Favourite Quote:
Quitting is at the very core of thinking like a Freak. Or, if the word still frightens you, let's think of it as "letting go". Letting go of conventional wisdoms that torment us. Letting go of the artificial limits that hold us back - and od the fear of admitting what we don't know. Letting go of the habits of mind that tell us to kick into the corner of the goal even though we stand a better chance by going up the middle.