Discount Think Twice: Harnessing the Power of Counterintuition

This short and easy-reading book packs a real wallop when it comes to identifying and explaining common mental tendencies that can impair our judgment. These tendencies may be hard-wired into our DNA as a result of events thousands of years ago. For example, suppose that while two cavemen were walking down a path, they both heard a sound in a nearby bush. One caveman bolts immediately, while the other stops and thinks to himself, "I wonder what that is?" While he's thinking, a rattlesnake strikes out and bites him--and he dies shortly thereafter. That caveman's DNA didn't get passed on to future generations, while the DNA of the caveman who ran first and thought later does. So it may make sense that in uncertain or stressful situations, we have a tendency to react quickly. But modern society's situations may call for careful thought more than immediate reaction, so at times even smart people can be led by their instinctive responses into poor decisions. As author Michael Mauboussin puts it, "Smart people make poor decisions because they have the same factory settings on their mental software as the rest of us."

This book is filled with interesting examples of how our instinctive first responses can lead to less than optimal choices. I'll relate two of the book's examples, so you can get a feel for what's in the book, and then you can hopefully decided better whether you want to buy it. The first example that comes to mind may be called the "inside versus outside" view. To illustrate "inside" thinking, consider the case of race horse Big Brown in 2008. He won the Kentucky Derby by four and three-quarters lengths, and then he won the Preakness Stakes by five and one-quarter lengths. Prior to Big Brown's attempt to win the Belmont Stakes (and thus capture racing's Triple Crown), he looked great, and his owner expressed a lot of confidence. On race day for the Belmont, Big Brown's odds were 3 - 10, making him the easy (75% likelihood of winning) favorite. That's the details-oriented "inside" view. The "outside" view is that of the 29 prior horses to compete in the Belmont after winning both the Kentucky Derby and the Preakness, only 11 won the Belmont (about 38%). Further, since 1950 (perhaps when better training methods were more commonly practiced) only 3 of 20 horses (15%) with a chance to win the Triple Crown won the Belmont. In short, the inside view was optimistic, but the outside view wasn't. It turns out that Big Brown finished ninth in the Belmont.

A briefer second example of how our "mental models" affect our thinking and decision making, concerns French and German wines available for sale in a store. When French music was played, customers chose French wine 77% of the time, yet when German music was played in the store, customers chose German wine 73% of the time. The customers were asked whether they heard the music and whether it affected their choices. Most customers recalled hearing the music, but they denied that it had anything to do with their choices.

Okay, perhaps these examples will help you understand the kind of reasoning processes that author Mauboussin examines and discusses in Think Twice. Indeed, the book's title is the shortest advice he has to give to people facing situations where instinctive responses may impede the best decisions. As they say, forewarned is for forearmed.
Get more detail about Think Twice: Harnessing the Power of Counterintuition.