The Boston Globe writes about Amos Tversky--the Third Man who should have been awarded this year's economics Nobel Prize, but who died back in 1996.
Posted by DeLong at October 21, 2002 01:35 PM | Trackback
THIS STORY HAS BEEN FORMATTED FOR EASY PRINTING
The man who wasn't there
Why Amos Tversky, maestro of the irrational, deserved this year's Nobel Prize in economics
By James Ryerson, 10/20/2002
JUST AS BEATLES fans couldn't fully appreciate the 1997 knighting of Sir Paul McCartney in the absence of the late John Lennon, so the announcement of this year's Nobel Memorial Prize in Economic Science felt incomplete. At a news conference at Princeton University on Oct. 9, the psychologist Daniel Kahneman, who won the Nobel this year along with the economist Vernon L. Smith, expressed regret that his longtime collaborator Amos Tversky wasn't able to share the distinction with him. Tversky died in 1996, and while he did receive a citation from the prize committee, he couldn't receive the prize itself: Nobels are not awarded posthumously.
Tversky and Kahneman are nearly always mentioned in the same breath. In the 1970s, the two Israeli-born psychologists devised a series of ingenious experiments to expose the illogical ways in which people make decisions that involve probability - everything from playing roulette to guessing what someone does for a living. But Tversky also had a successful career in his own right. At 19, before he became a worldwide expert on risk assessment, he earned Israel's highest military decoration by saving the life of a fellow soldier who had frozen in panic after placing an explosive charge. Tversky daringly intervened and was wounded by the explosion. After receiving his doctorate at the University of Michigan, he taught at Hebrew University, later moving to Stanford University, where he worked for many years until his death.
Though this year 's Nobel Prize will only cement his link with Kahneman, Tversky also produced important insights about human irrationality without the assistance of his colleague. In an eye-opening 1985 journal article, ''The hot hand in basketball: On the misperception of random sequences,'' Tversky and two other authors set out to correct the perception, common among basketball fans and players alike, that players tend to get ''hot'' - i.e., they sometimes hit a string of shots that is markedly longer than what you would have expected on the basis of their overall shooting percentage. Interviews with the Philadelphia 76ers revealed that the players put a good deal of faith in the ''hot hand'' concept, regularly passing the ball to a teammate who had made a series of consecutive shots so that he could shoot again. The 76ers' own shooting guard, Andrew Toney, was widely cited by fans as a classic streak shooter. But Tversky would have none of it.
Scrutinizing the field-goal records for home games of individual members of the 1980-1981 76ers (including the famously ''streaky'' Toney), Tversky and his coauthors failed to find statistical evidence of the hot hand phenomenon. The paper also examined the data for all pairs of free throws by the Boston Celtics during the 1980-1981 and 1981-1982 seasons. None of the players - not Larry Bird, not Robert Parrish, not Kevin McHale - demonstrated a statistical tendency to have the success of their first shot affect the success of their second shot.
The spectacle that basketball fans profess to see, Tversky argued, is nothing more than the standard laws of chance, observed through the imperfect lens of human cognition. Specifically, he noted, people have a tendency to expect the overall odds of a chance process (say, the 50 percent distribution of heads on a flipped coin, or the 46 percent accuracy of Toney's field-goal shooting) to apply to each and every segment of the process. For instance, when flipping a coin 20 times, it's not uncommon to see a string of four heads in a row. Yet when people are paying attention to a shorter sequence of the 20 coin flips, they are inclined to regard a string of four heads as nonrandom - as a hot streak - even though a strict back-and-forth of heads and tails throughout the 20 flips would be far less likely.
The same mental foible, Tversky and Kahneman discovered, lies at the heart of the familiar ''gambler's fallacy.'' After witnessing a long run of red on a roulette wheel, for example, gamblers often become extremely confident that the next spin will be black, when in fact the chances remain at roughly 50 percent. Again, the confusion arises from an impulse to see the overall odds of the wheel reflected in any given sequence of spins. Because the appearance of black after a long run of red would seem to help restore the even balance of colors that the wheel guarantees over time, gamblers become convinced that the wheel is ''due'' to hit black.
Tversky and Kahneman stressed that such reasoning, though erroneous, is based on a certain sort of wisdom. After all, in most cases it's not a bad rule of thumb to assume that two similar sets - say, five spins of the roulette wheel and 500 of them - will consistently share similar features.
Some philosophers and evolutionary theorists have suggested that we evolved this sort of cognitive quirk precisely because of its rough-and-ready usefulness, because as a general strategy for survival it has proven good enough. Hard-wired into our brains or not, it's not limited to uneducated rubes, casinogoers, and NBA players: At meetings of the Mathematical Psychology Group and the American Psychological Association, the same illogic was demonstrated by a majority of the scientists who responded to a questionnaire that included a disguised version of the roulette-wheel dilemma.
But is Kahneman himself an exception to the rule? One of the other common blunders of reasoning that he and Tversky discovered is the tendency to assess the frequency of a given event by how easy it is to think of examples of that event. Most people will estimate that there are more English words that begin with the letter ''k'' than those whose third letter is ''k'' - even though the opposite is true - simply because it's easier to think of examples of the former. The psychologists Michael Ross and Fiore Sicoly have pointed out another instance of this irrational tic: the tendency of researchers who work in partnership to sincerely claim more credit for themselves than there is credit to go around. It's much easier, after all, to call to mind one's own blood, sweat, and tears than someone else's. But as Kahneman's tribute to his late friend's equal importance suggests, he's rational to the core.
James Ryerson is a senior editor of Legal Affairs.
This story ran on page D1 of the Boston Globe on 10/20/2002.
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