Gary Klein’s excellent new book, “Seeing What Others Don’t: The Remarkable Ways We Gain Insights” starts with a neat looking equation:

Daniel Kahneman Gary Klein

In other words, if you have to get better at anything, you must do two things:

1. Don’t screw up

2. Get cool ideas that work

In BFBV, hopefully you’ll learn both these skills.

But before we get to all of that, I want to talk a bit about two psychologists — Klein and Kahneman who, it seems to me, really don’t like each other. I, on the other hand, love both.

Daniel Kahneman vs Gary Klein

In his masterpiece, “Thinking, Fast and Slow,” Daniel Kahneman refers to Klein as an “adversarial collaborator, the intellectual leader of an association of scholars and practitioners who do not like the kind of work I do. They … adamantly reject the focus on biases in the heuristics and biases approach. They criticize this model as overly concerned with failures and driven by artificial experiments rather than by the study of real people doing things that matter. They are deeply skeptical about the value of using rigid algorithms to replace human judgment, and …Gary Klein has eloquently articulated this position over many years. This is hardly the basis for a beautiful friendship…

Gary Klein, on the other hand, has this to say about Daniel Kahneman:

“In his recent bestseller Thinking, Fast and Slow, Kahneman distinguishes between fast and intuitive System 1 thinking and System 2 thinking, which is slower, more critical, analytical, and deliberate…These ideas line up nicely with the two arrows in the performance diagram I presented. System 2 is all about the downward arrow. It is all about reducing errors. The weight of the heuristics-and-biases studies, reporting bias after bias, can unsettle us, making us doubt our own judgments, our capacity for clear thinking. Frequently, the message of the heuristics-and-biases research is that we are likely to draw mistaken conclusions unless we engage in rigorous critical thinking. The message is that we have to strengthen the down arrow. I believe it is important to counterbalance this negative impression of System 1 with a sense of awe and appreciation about the insights we create and the discoveries we make. We need both arrows, just as we need both System 1 thinking and System 2 thinking. The process of gaining insights, the upward arrow, balances the worries about decision biases, the downward arrow.”

“The judgment and decision making community for the past few decades has concentrated on heuristics and biases, particularly the ways our heuristics can get us in trouble. Thus, the force of seeing connections, coincidences, and curiosities can take us too far, to the point where we see connections that aren’t there. Scientists refer to these false connections as “pseudo-correlations,” connections that aren’t valid, and warn us about them. However, these warnings miss all that we learn by noticing connections. The warning is an example of down-arrow thinking, just worrying about the cost of a mental habit without appreciating its benefits. The heuristics-and-biases community has provided us with a stream of studies showing how our mental habits can be used against us and make us look stupid and irrational. They don’t offer a balanced set of studies of how these habits enable us to make discoveries.”

You know what? We’ll let them fight over this.

In the meantime, we will learn not to screw up by identifying, with Daniel Kahneman’s help, various ways in which people screw up (biases) and then finding antidotes to protect us from those biases.

Loss Aversion

Here’s an example of a bias we will study about in more detail in a week or so. Choose between:

A. An 85% chance of winning $100 (the gamble); or

B. A sure gain of $85 (the sure thing)

See full PDF below.