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36 people found this helpful
5.0 out of 5 starsAn Actively Open-Minded Exposition
ByHerbert Gintison June 20, 2008
This is the fourth edition of Jonathan Baron's very popular textbook on decision-making and thinking. The text is inspired by, and develops carefully and in an entertaining manner, the basic theories and experimental results of Daniel Kahneman, Amos Tversky, George Loewenstein, Paul Slovic, and others in the "heuristics and biases" tradition. This school of thought is only 35 years old, but it has radically transformed our knowledge of human decision-making. The material is inherently engaging, and students love to study it. This is an excellent book, and fully covers the subject material, except for graduate students who plan to work in this area, who should read the primary material on which this book is based. It is also great for self-study by the curious lay reader.
Let me say at the outset that the negative reviews of this book are totally unwarranted. One is just the ranting of a persons who cannot give reasons, but only throw out unsupported, idiosyncratic, judgments. Another is by a reader with an ax to grind concerning philosophical issues in probability theory that are completely tangential to the purposes of this book I think these commentators would do well to withdraw their useless and diverting comments.
Baron is a talented experimenter in his own right, although in the book he limits his material almost exclusively to the works of the Old Masters, Kahneman et al. His own contribution is on an interpretive level. First, his basic model of human behavior is what he calls the "search-inference" model, which turns out to be the economist's "rational actor" model, in which decision-makers have preferences ("goals" in the search-inference terminology), beliefs, and constraints, and act to maximize utility (goal-attainment) subject ot constraints. Baron defines "rational thinking" as "whatever kind of thinking best helps people achieve their goals." (p. 61) This, of course, is precisely the definition of rationality in the rational actor tradition in decision-theory. Of course, "preferences" are more specific than "goals," and it is not clear to me whether "rational" in Baron's sense includes achieving goals that are welfare-reducing (e.g., substance abuse), whereas in the rational actor tradition, rationality has to do with the attainment of goals with no evaluation of the relationship between goals and personal welfare.
Baron introduces two normative notions which instructors will find useful. The first is the idea of "actively open-minded thinking," and the second is "multi-attribute utility theory." Together, they urge that decision-maker cast a wide net in evaluating alternatives before honing in on a particular choice. The examples illustrating the value of this approach are illuminating and helpful.
This book does not make clear that there has been a second wave of behavioral experiments, starting in the mid-1980's that focus less on isolated decisions, and more on decisions in a setting of strategic interaction, using game theory as a tool of experimental design. This new body of theory and evidence deals with fairness and justice, altruism, cooperation, insider-outsider interactions, and related themes, in a manner barely intimated in this book. The chapters on altruism, fairness, and moral reasoning, are at least fifteen years out of date, and should not be used in a classroom today. There is, of course, plenty of material in the book without using these chapters, for a whole course on decision-making and thinking, but for strategic interaction, cooperation, and conflict, a completely different set of readings are required---and perhaps a completely new course devoted exclusively to this material.
A major focus of this book is on biases in decision-making---human errors that are not simply random, but rather are consistently biased in a particular direction. For instance, in the Draw A Man diagnostic, clinicians systematically interpret big eyes on a patient's drawing as indicative of paranoia, despite the fact that no such statistical relationship has ever been found. Moreover, untrained students also make the same mistake, indicating that this judgment is a systematic error committed by many people. The tragedy is that the clinicians do not abandon their biases when faced with objective data.
While systematic bias is a very important phenomenon, Baron does not claim that the rational actor models used by economists, in which biases do not exist, are contradicted by the experimental evidence---a criticism that the heuristic and bias researchers are usually fond of leveling against economic theory. Rather, he says that effective decision-making is the rule, especially when the parameters of the decision problem are clear, and that we should approach the biases that arise in complex decision contexts as challenges that we can overcome if we have the proper decision-making protocols.
Why do economists ignore biases in decision making, while psychologists take them so seriously? The answer is that economists only care about individual decision-making because they need a model of individual behavior that they can aggregate to model the macro-economy. Moreover, they consider their most fruitful professional interventions not in helping people make better decisions, but rather in advising governments and firms how to manipulate such macroeconomic variables as tax, profit margins, and interest rates. Psychologists, by contrast, consider the individual, not society, as the focus of their ministrations. Hence they tend to ignore the enormous success of the rational actor paradigm in modeling social behavior, and rather focus on areas of vulnerability in individual decision-making, where professional interventions on the level of the individual can improve decision-making accuracy.
Let me say at the outset that the negative reviews of this book are totally unwarranted. One is just the ranting of a persons who cannot give reasons, but only throw out unsupported, idiosyncratic, judgments. Another is by a reader with an ax to grind concerning philosophical issues in probability theory that are completely tangential to the purposes of this book I think these commentators would do well to withdraw their useless and diverting comments.
Baron is a talented experimenter in his own right, although in the book he limits his material almost exclusively to the works of the Old Masters, Kahneman et al. His own contribution is on an interpretive level. First, his basic model of human behavior is what he calls the "search-inference" model, which turns out to be the economist's "rational actor" model, in which decision-makers have preferences ("goals" in the search-inference terminology), beliefs, and constraints, and act to maximize utility (goal-attainment) subject ot constraints. Baron defines "rational thinking" as "whatever kind of thinking best helps people achieve their goals." (p. 61) This, of course, is precisely the definition of rationality in the rational actor tradition in decision-theory. Of course, "preferences" are more specific than "goals," and it is not clear to me whether "rational" in Baron's sense includes achieving goals that are welfare-reducing (e.g., substance abuse), whereas in the rational actor tradition, rationality has to do with the attainment of goals with no evaluation of the relationship between goals and personal welfare.
Baron introduces two normative notions which instructors will find useful. The first is the idea of "actively open-minded thinking," and the second is "multi-attribute utility theory." Together, they urge that decision-maker cast a wide net in evaluating alternatives before honing in on a particular choice. The examples illustrating the value of this approach are illuminating and helpful.
This book does not make clear that there has been a second wave of behavioral experiments, starting in the mid-1980's that focus less on isolated decisions, and more on decisions in a setting of strategic interaction, using game theory as a tool of experimental design. This new body of theory and evidence deals with fairness and justice, altruism, cooperation, insider-outsider interactions, and related themes, in a manner barely intimated in this book. The chapters on altruism, fairness, and moral reasoning, are at least fifteen years out of date, and should not be used in a classroom today. There is, of course, plenty of material in the book without using these chapters, for a whole course on decision-making and thinking, but for strategic interaction, cooperation, and conflict, a completely different set of readings are required---and perhaps a completely new course devoted exclusively to this material.
A major focus of this book is on biases in decision-making---human errors that are not simply random, but rather are consistently biased in a particular direction. For instance, in the Draw A Man diagnostic, clinicians systematically interpret big eyes on a patient's drawing as indicative of paranoia, despite the fact that no such statistical relationship has ever been found. Moreover, untrained students also make the same mistake, indicating that this judgment is a systematic error committed by many people. The tragedy is that the clinicians do not abandon their biases when faced with objective data.
While systematic bias is a very important phenomenon, Baron does not claim that the rational actor models used by economists, in which biases do not exist, are contradicted by the experimental evidence---a criticism that the heuristic and bias researchers are usually fond of leveling against economic theory. Rather, he says that effective decision-making is the rule, especially when the parameters of the decision problem are clear, and that we should approach the biases that arise in complex decision contexts as challenges that we can overcome if we have the proper decision-making protocols.
Why do economists ignore biases in decision making, while psychologists take them so seriously? The answer is that economists only care about individual decision-making because they need a model of individual behavior that they can aggregate to model the macro-economy. Moreover, they consider their most fruitful professional interventions not in helping people make better decisions, but rather in advising governments and firms how to manipulate such macroeconomic variables as tax, profit margins, and interest rates. Psychologists, by contrast, consider the individual, not society, as the focus of their ministrations. Hence they tend to ignore the enormous success of the rational actor paradigm in modeling social behavior, and rather focus on areas of vulnerability in individual decision-making, where professional interventions on the level of the individual can improve decision-making accuracy.
Top critical review
3.0 out of 5 starsIs good but long
ByMikeon June 29, 2017
Is good but long. Gives a general introductive perspective on various aspects of psychology. Is monotonous and time consuming to read.
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ByHerbert Gintison June 20, 2008
This is the fourth edition of Jonathan Baron's very popular textbook on decision-making and thinking. The text is inspired by, and develops carefully and in an entertaining manner, the basic theories and experimental results of Daniel Kahneman, Amos Tversky, George Loewenstein, Paul Slovic, and others in the "heuristics and biases" tradition. This school of thought is only 35 years old, but it has radically transformed our knowledge of human decision-making. The material is inherently engaging, and students love to study it. This is an excellent book, and fully covers the subject material, except for graduate students who plan to work in this area, who should read the primary material on which this book is based. It is also great for self-study by the curious lay reader.
Let me say at the outset that the negative reviews of this book are totally unwarranted. One is just the ranting of a persons who cannot give reasons, but only throw out unsupported, idiosyncratic, judgments. Another is by a reader with an ax to grind concerning philosophical issues in probability theory that are completely tangential to the purposes of this book I think these commentators would do well to withdraw their useless and diverting comments.
Baron is a talented experimenter in his own right, although in the book he limits his material almost exclusively to the works of the Old Masters, Kahneman et al. His own contribution is on an interpretive level. First, his basic model of human behavior is what he calls the "search-inference" model, which turns out to be the economist's "rational actor" model, in which decision-makers have preferences ("goals" in the search-inference terminology), beliefs, and constraints, and act to maximize utility (goal-attainment) subject ot constraints. Baron defines "rational thinking" as "whatever kind of thinking best helps people achieve their goals." (p. 61) This, of course, is precisely the definition of rationality in the rational actor tradition in decision-theory. Of course, "preferences" are more specific than "goals," and it is not clear to me whether "rational" in Baron's sense includes achieving goals that are welfare-reducing (e.g., substance abuse), whereas in the rational actor tradition, rationality has to do with the attainment of goals with no evaluation of the relationship between goals and personal welfare.
Baron introduces two normative notions which instructors will find useful. The first is the idea of "actively open-minded thinking," and the second is "multi-attribute utility theory." Together, they urge that decision-maker cast a wide net in evaluating alternatives before honing in on a particular choice. The examples illustrating the value of this approach are illuminating and helpful.
This book does not make clear that there has been a second wave of behavioral experiments, starting in the mid-1980's that focus less on isolated decisions, and more on decisions in a setting of strategic interaction, using game theory as a tool of experimental design. This new body of theory and evidence deals with fairness and justice, altruism, cooperation, insider-outsider interactions, and related themes, in a manner barely intimated in this book. The chapters on altruism, fairness, and moral reasoning, are at least fifteen years out of date, and should not be used in a classroom today. There is, of course, plenty of material in the book without using these chapters, for a whole course on decision-making and thinking, but for strategic interaction, cooperation, and conflict, a completely different set of readings are required---and perhaps a completely new course devoted exclusively to this material.
A major focus of this book is on biases in decision-making---human errors that are not simply random, but rather are consistently biased in a particular direction. For instance, in the Draw A Man diagnostic, clinicians systematically interpret big eyes on a patient's drawing as indicative of paranoia, despite the fact that no such statistical relationship has ever been found. Moreover, untrained students also make the same mistake, indicating that this judgment is a systematic error committed by many people. The tragedy is that the clinicians do not abandon their biases when faced with objective data.
While systematic bias is a very important phenomenon, Baron does not claim that the rational actor models used by economists, in which biases do not exist, are contradicted by the experimental evidence---a criticism that the heuristic and bias researchers are usually fond of leveling against economic theory. Rather, he says that effective decision-making is the rule, especially when the parameters of the decision problem are clear, and that we should approach the biases that arise in complex decision contexts as challenges that we can overcome if we have the proper decision-making protocols.
Why do economists ignore biases in decision making, while psychologists take them so seriously? The answer is that economists only care about individual decision-making because they need a model of individual behavior that they can aggregate to model the macro-economy. Moreover, they consider their most fruitful professional interventions not in helping people make better decisions, but rather in advising governments and firms how to manipulate such macroeconomic variables as tax, profit margins, and interest rates. Psychologists, by contrast, consider the individual, not society, as the focus of their ministrations. Hence they tend to ignore the enormous success of the rational actor paradigm in modeling social behavior, and rather focus on areas of vulnerability in individual decision-making, where professional interventions on the level of the individual can improve decision-making accuracy.
Let me say at the outset that the negative reviews of this book are totally unwarranted. One is just the ranting of a persons who cannot give reasons, but only throw out unsupported, idiosyncratic, judgments. Another is by a reader with an ax to grind concerning philosophical issues in probability theory that are completely tangential to the purposes of this book I think these commentators would do well to withdraw their useless and diverting comments.
Baron is a talented experimenter in his own right, although in the book he limits his material almost exclusively to the works of the Old Masters, Kahneman et al. His own contribution is on an interpretive level. First, his basic model of human behavior is what he calls the "search-inference" model, which turns out to be the economist's "rational actor" model, in which decision-makers have preferences ("goals" in the search-inference terminology), beliefs, and constraints, and act to maximize utility (goal-attainment) subject ot constraints. Baron defines "rational thinking" as "whatever kind of thinking best helps people achieve their goals." (p. 61) This, of course, is precisely the definition of rationality in the rational actor tradition in decision-theory. Of course, "preferences" are more specific than "goals," and it is not clear to me whether "rational" in Baron's sense includes achieving goals that are welfare-reducing (e.g., substance abuse), whereas in the rational actor tradition, rationality has to do with the attainment of goals with no evaluation of the relationship between goals and personal welfare.
Baron introduces two normative notions which instructors will find useful. The first is the idea of "actively open-minded thinking," and the second is "multi-attribute utility theory." Together, they urge that decision-maker cast a wide net in evaluating alternatives before honing in on a particular choice. The examples illustrating the value of this approach are illuminating and helpful.
This book does not make clear that there has been a second wave of behavioral experiments, starting in the mid-1980's that focus less on isolated decisions, and more on decisions in a setting of strategic interaction, using game theory as a tool of experimental design. This new body of theory and evidence deals with fairness and justice, altruism, cooperation, insider-outsider interactions, and related themes, in a manner barely intimated in this book. The chapters on altruism, fairness, and moral reasoning, are at least fifteen years out of date, and should not be used in a classroom today. There is, of course, plenty of material in the book without using these chapters, for a whole course on decision-making and thinking, but for strategic interaction, cooperation, and conflict, a completely different set of readings are required---and perhaps a completely new course devoted exclusively to this material.
A major focus of this book is on biases in decision-making---human errors that are not simply random, but rather are consistently biased in a particular direction. For instance, in the Draw A Man diagnostic, clinicians systematically interpret big eyes on a patient's drawing as indicative of paranoia, despite the fact that no such statistical relationship has ever been found. Moreover, untrained students also make the same mistake, indicating that this judgment is a systematic error committed by many people. The tragedy is that the clinicians do not abandon their biases when faced with objective data.
While systematic bias is a very important phenomenon, Baron does not claim that the rational actor models used by economists, in which biases do not exist, are contradicted by the experimental evidence---a criticism that the heuristic and bias researchers are usually fond of leveling against economic theory. Rather, he says that effective decision-making is the rule, especially when the parameters of the decision problem are clear, and that we should approach the biases that arise in complex decision contexts as challenges that we can overcome if we have the proper decision-making protocols.
Why do economists ignore biases in decision making, while psychologists take them so seriously? The answer is that economists only care about individual decision-making because they need a model of individual behavior that they can aggregate to model the macro-economy. Moreover, they consider their most fruitful professional interventions not in helping people make better decisions, but rather in advising governments and firms how to manipulate such macroeconomic variables as tax, profit margins, and interest rates. Psychologists, by contrast, consider the individual, not society, as the focus of their ministrations. Hence they tend to ignore the enormous success of the rational actor paradigm in modeling social behavior, and rather focus on areas of vulnerability in individual decision-making, where professional interventions on the level of the individual can improve decision-making accuracy.
36 people found this helpful
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ByJohn S. Ryanon December 14, 2002
This is a _very_ impressive book. I can't imagine a more thorough overview of the study of human judgment, decisionmaking, and rationality.
It's hard to find a good single volume in this field. For the psychology of judgment and decisionmaking, there's Scott Plous's excellent book of that title. For the heuristics on which we seem to rely and the biases they seem to generate, there's the modern classic _Judgment Under Uncertainty_ by (the late) Amos Tversky and (recent Nobel prize winner) Daniel Kahneman. And there are other books devoted to special topics and subtopics.
But so far as I know, this is the only broad, general introduction to the entire field of thinking, how we do it, how we probably ought to do it, and the sorts of things we do it about.
The book is divided into three broad sections. "Thinking In General" covers just that: what thinking is, and the nature of rationality and logic. "Probability and Belief" introduces not only probability theory (including, importantly, Bayes's Theorem) but the various theories about what probability _is_, as well as hypothesis testing, correlation, and "actively open-minded thinking." The largest section, "Decisions and Plans," is eleven chapters long and covers everything else: uncertainty, utility, decision analysis, theories of morality fairness, and justice, and risk.
As you might imagine, Baron doesn't leave too many stones unturned. Heck, his bibliography alone is thirty-odd pages long.
The book is eminently readable. The third edition is aimed mainly at graduate students but I gather Baron still uses it in his undergraduate courses. If you're a lay reader interested in this field, you'll be able to read it on your own with no difficulty.
It's hard to find a good single volume in this field. For the psychology of judgment and decisionmaking, there's Scott Plous's excellent book of that title. For the heuristics on which we seem to rely and the biases they seem to generate, there's the modern classic _Judgment Under Uncertainty_ by (the late) Amos Tversky and (recent Nobel prize winner) Daniel Kahneman. And there are other books devoted to special topics and subtopics.
But so far as I know, this is the only broad, general introduction to the entire field of thinking, how we do it, how we probably ought to do it, and the sorts of things we do it about.
The book is divided into three broad sections. "Thinking In General" covers just that: what thinking is, and the nature of rationality and logic. "Probability and Belief" introduces not only probability theory (including, importantly, Bayes's Theorem) but the various theories about what probability _is_, as well as hypothesis testing, correlation, and "actively open-minded thinking." The largest section, "Decisions and Plans," is eleven chapters long and covers everything else: uncertainty, utility, decision analysis, theories of morality fairness, and justice, and risk.
As you might imagine, Baron doesn't leave too many stones unturned. Heck, his bibliography alone is thirty-odd pages long.
The book is eminently readable. The third edition is aimed mainly at graduate students but I gather Baron still uses it in his undergraduate courses. If you're a lay reader interested in this field, you'll be able to read it on your own with no difficulty.
ByDaniel Con April 1, 2016
I learned some new heuristics, biases, and principle from the book. The concept of expected utility and utilitarian theory are especailly meaningful to me and have shaped my thinking and weighing tradeoff in decision making.
ByJames Vornovon August 29, 2001
This is the first book I recommend to anyone interested in learning how to think and decide better. It is both an exploration of the usual way we think (and the mistakes we make) as well as a contruction of a toolkit for better thinking. It's well written and is at the level of an advanced undergraduate liberal arts course. Not too technical and mathematics oriented, but covers the concepts with rigor in an intuitive way. A good preparation for more technically oriented investigations of the subject.
ByMichael Emmett Bradyon July 1, 2004
This book is badly marred by the author's failure to carefully differentiate between the classical theory of probability,which was founded in the 17th century,and the logical theory of probability,which J M Keynes started early in the 20th century.Rudolph Carnap made additional contributions in the mid-1950's to the logical theory of probability. In this reviewer's opinion,pp.93-103 contain so many errors of both omission and commission that a novice reader will come away from reading this book with serious gaps in his understanding of what probability means and how it is applied in the real world.The fact that Baron is a strong supporter of the Ramsey-de Finetti subjectivist approach does not justify the very misleading appraisals of the relative frequency and logical theories of probability in his book. Contrary to Baron,Carnap's approach makes use of all the available evidence,including statistical data and relative frequencies.Carnap's approach also makes use of the betting quotients technique used by subjectivists.It simply is not true that"Likewise,the logical view is ordinarily useless as a justification for making probability judgments,except in textbook(or casino)cases of"fair coins"....".The second major draw back of this book is the author's strong belief that all probabilities are precise,exact,definite point estimates.Baron apparently believes that there is always sufficient information to represent the probability by a unique single number . (see Baron,pp.94-96). Baron appears to be completely ignorant of J M Keynes's interval valued approach or of the work of Walley ,Levi,Kyburg and The Society for Interval Valued Probability Theory and Application(SIPTA) in reviving Keynes's long dormant approach.
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