Thursday, April 26, 2012

From Baseball to Vanity Fair to Nobel Prize to Icelandic Horses

This essay really starts with Brad Pitt.  Ever since I saw Brad in “Thelma and Louise,” I have been hooked on his movies.  And I make a special effort to see any of his movies that receive favorable reviews by the critics.  So of course I had to see “Moneyball.”  Based on actual events, the movie depicted the challenge of Oakland Athletics' general manager Billy Beane (played by Brad Pit) who, faced with a losing season, looked for a different way of building a winning team.  Peter Brand (Jonah Hill), a recent Yale graduate persuaded Beane to hire low paid, undervalued players based on  Brand’s newly developed cost-benefit formulas rather than the intuition so commonly used in selecting baseball talent.  

Just a few weeks after watching the movie, my Vanity Fair magazine arrived with an article “The King of Human Error” by Michael Lewis.  Lewis wrote the book Moneyball on which the movie was based.   He wondered why baseball executives who spend their well paid careers evaluating talent still end up making so many blunders.  Lewis failed to answer this question in his book so he looked to the work of Daniel Kahneman and Amos Tversky who spent a lifetime conducting research in the field of cognitive psychology as to how human decision making can be distorted under conditions of uncertainty.  In 2002, Kahneman won the Nobel Prize in Economics for this work (Tversky died in 1996 so he was ineligible for the Nobel). 
Four years ago, Lewis finagled an interview with the then 73-year old Kahneman, Professor Emeritus at Princeton.  Kahneman spent much of the interview discussing why he should not publish or even finish what he describes as his “vanity project”—a book on how to teach people to think.  Kanhneman was so convinced his book was going to be a failure that he hired four experts in his field to read his book and provide anonymous criticism—as Lewis points out, essentially paying people to trash his book.  Instead, the reviews were gushing and Kahneman published his book Thinking, Fast and Slow in October of this year. 

The Vanity Fair introduction to Kahneman’s book was so intriguing that I immediately went out and purchased my own copy.  In a very engaging and easy-to read-style, Kahneman uses his decades of research to discuss how our intuition can get in the way of our conscious thinking.  He categorizes our way of thinking into System 1 and System 2.  System 1 is the quick, mostly unconscious way of making decisions based on intuition.  Faced with 1000s of decisions in a day—both great and small-- we rely on System 1 thinking for many of those choices because it is quick.  System 2 is the systematic, deliberate, conscious way that we come to a reasoned decision.  Under heavy System 2 processing, our eyes will dilate, our glucose level drops,  and stress increases especially if a time constraint is involved.  System 1 can provide amazingly fast spacial and pattern recognition; it is the basis for “expert intuition.”  System 2 is the more time-consuming approach we use to compute complex math equations and solve logic problems. (Note System 1 and System 2 are constructs or “nicknames” that Kahneman developed to represent “automatic system” and “effortful system,” respectively.)
System 1 and System 2 thinking can work against each other .  Here is an examples from Thinking, Fast and Slow .    
Question 1: Analyze the following question (Kahneman, p. 44):
“A bat and a ball costs $1.10.
The bat costs one dollar more than ball.
How much does the ball cost?”
(I am adding some spaces here so you come up with your own answer.)

Well even knowing that Kahneman has been discussing fast and slow thinking, I was lazy and went with my intuition or System 1 thinking on this one.  I came to an answer quickly but my  answer was wrong.  Like most college students who were given this question, I came up with an answer of 10 cents.  I didn’t bother to do the quick math check that if the ball is $0.10 and the bat is $1.10 the bat plus ball equals $1.20 not $1.10.  (The correct answer is that ball costs 5 cents.)

So you are all thinking right now, why did Pamela go through this lengthy introduction and what does this have to do with the Icelandic horse?  Well as I am reading Thinking, Fast and Slow, I challenged myself to apply these cognitive biases to my own thinking about horse training, Icelandic horse “history,” Icelandic horse evaluations, pricing of Icelandic horses, marketing of horse training, and much more.  I found that my intuitive thinking often gets in the way of my rational consideration of these topics.  Let’s look at examples.

Pamela’s Question 2: At age 4, the head of a horse will weight approximately (adapted from Pop Quiz, Equus, p.16):
a)       Seven pounds more  than it will at age 15
b)      The same as it will at age 15
c)       Three pounds more than at age 15
d)      Seven pound less than at age 15
(I am adding some spaces here so you come up with your own answer.)
OK, my gut feel or System 1 answer to this was b.   Of course, my first thought on this one was more influenced by my assumption that a human skull probably weighs the same at age 18 as compared with age 50.  I had forgotten horses teeth wear down considerably over the years—despite all my bills for teeth floating.   The correct answer is a.   “A 4-year-old horse’s head weighs seven pounds more than it will when he is 15, all because his teeth will continue to grow out and wear down—about one –eighth of an inch annually—from chewing rough hay, grasses and grit.  In fact, the molar roots of a 5-year-old can reach back as far as his eye sockets” (Pop quiz, p. 16).  So once again, in this case System 2 thinking would have led me to a better answer.  (I also wonder what a lighter head means for the older horse as far as balance and self-carriage—or perhaps it doesn’t make a difference.)

Question 3:  So let’s take another example from Kahneman.   “How many murders occur in the state of Michigan in one year?” (Kahneman, p. 45)
(I am adding some spaces here so you come up with your own answer.)


What is interesting about this question is how your answer is based on your memory of certain facts.   Research shows that people who remember that Detroit is in Michigan and that Detroit is a high crime city will give higher estimates than people who do not retrieve or do not know this fact.  However, it takes time and effort to go through this thinking process.  Kahneman does not give an answer to this question so I looked up the statistics.  In 2010, the murder rate in Michigan was 567 of which 307 murders occurred in Detroit.
If you want to challenge yourself with more Thinking, Fast and Slow puzzles, Vanity Fair has devised an on-line quiz available at:
http://www.vanityfair.com/business/features/2011/12/kahneman-quiz-201112
Pamela’s Question 4: How many times have we read something like the following on a web site or in an English publication about the Icelandic horse: “When the Vikings settled Iceland in the 9th century, they brought their best horses by ship.  The Icelandic  breed has remained pure for over 900 years.  In 1100 AD, a law was passed in Iceland that no horse could enter Iceland due to disease control.  No horses have been imported into Iceland since that time.  In fact today, any horse that leaves Iceland can never return.”  Intuitively (by System 1 thinking) the description feels right.

But let’s break down the statements and use some System 2 thinking.  When I re-read the paragraph and really think about it, the phrases  “in 1100 AD” and “disease control” kind of jump out at me.  And if I remember my scientific history correctly, current modern thinking about disease control did not develop until the mid- and late 1800s as scientists began to understand how cholera, small pox, anthrax, bubonic plague, and other diseases were spread from animal to animal (or animal to person in some diseases).  Up to that point, disease was regarded as being caused as a punishment by God, unbalanced humors, unidentified miasmas, witchcraft, and other  factors.  Stating that horses were forbidden to enter Iceland at that time due to “disease control” does not agree with my understanding of the history of science--slim though that may be.  
From a historical point, the Vikings were known for sailing from Russia to Sicily to Ireland and points in between raiding and pillaging and seizing  bright and shiny things as they went.  So although Iceland had oral laws almost from its founding and written laws from the early 12th century  (Bjőrnsson and  Sveinsson, p. 30), I find it hard to believe that a law about the importation of anything, let alone horses,  could be enforced for almost 1000 years along the rugged coast of Iceland, especially considering the period of internal strife in the 1200s.  In fact, Þorgeir Guðlaugssonis’ on-line review of a recent book Íslenski hesturinn written by Sveinsson, Arnórsson, Sigurðardóttir, and Guðlaugsson states “There is a widely spread belief outside Iceland that import of horses to the island was prohibited by law as early as in the days of the Vikings. No documents or other proof to confirm the existence of such a ban has been found, though, and both historians and jurists agree that this must be merely a legend. The fact that there was no import of horses to Iceland after the 13th century is not based on legal grounds as the first laws prohibiting horse import to Iceland only date from 1882 but on the fact that there was a lack of transportation facilities. Moreover there was probably never any demand or need for more horses on Iceland than were bred there by the inhabitants themselves” (Guðlaugssonis, para 2). 
After initial settlement of Iceland and the claiming of all available land, Iceland had a period of mild winters from 900 to 1200 AD followed a period from 1200 to 1900 AD of harsh winters.  In the 1800s, every one degree Centigrade drop of average winter temperature was related to a 30% decrease in livestock  (Bjőrnsson and  Sveinsson, p. 38).  So after the 1200s, there was no major influx of new settlers  into Iceland and in the 1800s there was mass immigration to the New World because of the starvation conditions.  So, all in all, little reason to import new horses.
FEIF description of the origin of the Icelandic horse better accommodates the above facts: “The Icelandic horse breed originates from Iceland where it has been bred, without any known introduction of foreign genetic material, since the island was settled around the year 900 AD. Its closest relatives today are assumed to be the native horse breeds of Scandinavia and horse breeds of the British Isles. The Icelandic horse is pure-bred with all ancestors traceable to Iceland” (FIZO, p. 6).
 S
o let’s circle back to Brad Pitt and Moneyball.  Roger Ebert described the movie as “a smart, intense and moving film that isn't so much about sports as about the war between intuition and statistics.” Almost every day, we will find ourselves in a similar “war” as we make decisions about how we select trainers and training methods, respond to equine-related marketing , make health care decisions, and buy and sell our Icelandic horses.  Kahneman’s work in Thinking, Fast and Slow provides thought provoking examples of cognitive psychology research that we can apply to make better decisions to win this war—or at least some battles.  And maybe I should only watch Brad Pitt’s more light hearted movies so I don’t get started with all this thinking stuff!
References:Bjőrnsson, G., & Sveinsson, H.  (2006).  The Icelandic Horse, Edda Publishing, Reykjavik, Iceland.
FIZO, FEIF Rules for Icelandic Breeding, Found December 25, 2011, at http://feif.org/Download/Breeding/tabid/204/Default.aspx
Guðlaugssonis, T. (no date) Icelandic’s in America at the days of Buffalo Bill.  Found November 26, 2011 at http://www.uwdierenarts.nl/cust/Nornabaeli/main.php?notitle&i=214
Kahneman, D.  (2011).  Thinking, Fast and Slow.  Farrar, Straus and Giroux, New York.
Lewis, M.  (December 2011).  The king of human error, Vanity Fair, pp. 138-154.
Pop quiz.  (December 2011).  Equus.  Issue 410.

No comments: