Courtesy of ZeroHedge. View original post here.
Michael Lewis, the author of books such as "Flash Boys", "The Big Short", and "Moneyball" is set to come out with his latest work in December.
In "The Undoing Project: A Friendship That Changed Our Minds", Lewis sets out to answer the question of why people aren't as data driven as Billy Beane, the Oakland Athletics executive featured in "Moneyball". Lewis said of the book "It's the prequel to 'Moneyball'. It is the story of people figuring out how the mind works when it's faced with making investment decisions. How it functions in conditions of uncertainty."
For insight, Lewis turned to two psychologists, Daniel Kahneman and Amos Tversky reports the NYT
In his coming book, “The Undoing Project: A Friendship That Changed Our Minds,” which W.W. Norton & Company will release this December, Mr. Lewis finally tackles that question.
“The Undoing Project” explores the groundbreaking work of two psychologists, Daniel Kahneman and Amos Tversky, whose research into decision making and judgment has challenged fundamental beliefs about human nature. In study after study, they showed that when it comes to making decisions, humans are predisposed to irrationality. Their surprising findings have had profound implications for everything from behavioral economics and politics, to advanced medicine and sports.
Their work, and its impact, is hardly obscure. Mr. Kahneman won the 2002 Nobel Prize in Economics (Mr. Tversky died in 1996.) But Mr. Lewis wasn’t aware of their research, and how much it had influenced his own writing, until 2003, when he came across a reference to them in a review of “Moneyball” in the New Republic. He has been working on “The Undoing Project” on and off for the last eight years, and conducted countless interviews with Mr. Kahneman.
In a piece Lewis published in Vanity Fair, Lewis hinted that this would be a topic that would get covered someday down the road.
It didn’t take me long to figure out that, in a not so roundabout way, Kahneman and Tversky had made my baseball story possible. In a collaboration that lasted 15 years and involved an extraordinary number of strange and inventive experiments, they had demonstrated how essentially irrational human beings can be.
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We hope that Lewis sends plenty of copies of his book over to the Marriner Eccles building, as it will explain to the Fed why all of the models in the world can't help centrally plan an economy in which irrational behavior exists.
