Here is an excerpt of an interview of Daniel Kahneman by Michael J. Mauboussin during a recent meeting of the Santa Fe Institute’s Business Network. According to Kahneman, intuition works less often than we think, noted Kahneman, winner of the 2002 Nobel Prize in Economics. What about the chess master’s intuition? The financier’s expertise? The doctor’s perspective that cannot be captured by data and models?

In a discussion that took place during an October 2015 SFI Business Network meeting at Morgan Stanley headquarters in New York, Kahneman explored intuition, data, and decision making with Michael Mauboussin, Managing Director of Credit Suisse and Chair of SFI’s Board of Trustees.

The SFI Business Network holds topical meetings for its members like the one at Morgan Stanley six to eight times per year in the U.S. and internationally. Readers interested in further information about the Business Network should visit here or contact Casey Cox (casey@santafe.edu), coordinator of the Business Network.

To read the complete interview, watch the video conversation (90 minutes), check out other resources, and learn more about the Institute, please click here.

During the video, Kahneman shares anecdotes along with research from Paul Meehl suggesting that the “outside view” of non-causal and statistical models for evaluation trounced the “inside view” favored by intuition in every recorded example.

Where intuition performs best, he said, is when it is anchored in the data-informed “outside view” and disciplined by immediate feedback.
Daniel Kahneman is a pioneering scholar of psychology. After escaping Nazi occupation in World War II, he immigrated to Israel, where he served in the Israel Defense Forces and trained as a psychologist. Alongside Amos Tversky, he applied cognitive psychology to economic analysis, laying the foundation for a new field of research and earning the Nobel Prize in Economics in 2002. He is currently a professor at Princeton University.

You can also read the blog post on Compounding My Interests (October 20, 2015).

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Here is a direct link.

Michael J. Mauboussin is head of global financial strategies at Credit Suisse. He is also an adjunct professor of finance at Columbia Business School. To learn more about6 him and his work, please click here.

http://www.michaelmauboussin.com/

To read Part 1 of my interview of Michael, please click here; for Part 2, here.

To read my review of his book, Think Twice: Harnessing the Power of Counterintuition, please click here.

Also, here’s a direct link to my review of his later book, The Success Equation: Untangling Skill and Luck in Business, Sports, and Investing.