Blunder: Why Smart People Make Bad Decisions
It was at Stanford that I truly understood that smart people blunder just like everyone else. To be honest, the realization came as something of a surprise during my freshman year.
I was stunned how people much smarter than me were making bad decisions. There was the person that set off the fire alarms the night before finals by overcooking popcorn. And then there was this guy that injured himself from excessive celebration after a ping pong game (he’s never going to live that one down). But perhaps the ultimate story was this woman who ordered one of those “as seen on TV” ab machines-the kind that uses electric stimulation to build muscle passively. She failed to follow directions, and within the first week of use, she burned her stomach.
These experiences have left me with a lifelong interest in the ways that smart people make bad decisions. I love reading about such “cognition traps” which are studied in behavioral economics. But what I was missing was a historical perspective to the problem. And that is why I immediately picked up Zachary Shore’s book Blunder: Why Smart People Make Bad Decisions
Now I’ll be honest that the book didn’t impress me right away. The book is divided into seven different cognition traps that have awkward sounding names (like causefusion and infomania). The book isn’t really about solving the problems but rather about raising your awareness by describing them through stories. And that is where the book truly shines.
Shore is a historian and has a knack for telling stories. I learned how Edison squandered his financial future by misjudging the work of his student Tesla (who in turn squandered his financial future to Westinghouse). I learned a lot about the Iraq war and the blunders of the Bush administration. And I learned about a blunder George Orwell made before he took on that pen name and became a famous author. It is these kinds of stories that make it an interesting read.
So while the book isn’t the best book I’ve read on decision-making, it is certainly a worthwhile read because the stories find a way to grow on you.
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4 Responses to “Blunder: Why Smart People Make Bad Decisions”
“So while the book isn’t the best book I’ve read on decision-making…”
Would you care to share the best one(s)? I really enjoyed The Paradox of Choice and Stumbling on Happiness (not explicitly about choice, but certainly related)…but I haven’t read many others. I’d love to see a little reading list with a few notes on what you found helpful in each.
By Jeremy on Jan 9, 2009
Good question. Off the top of my head my all time favorite is Influence: The Psychology of Persuasion
by Cialdini. I read this book in 2001 but I still refer back to it over and over again…It introduced me to so many ideas and made me aware of tricks that marketers use on us.
I also liked The Paradox of Choice
(choice can be bad) but I have rethought the subject since reading The Long Tail
(all about giving more, more, more!). The Long Tail also has the best explanation of the Pareto principle–it’s a statistical outcome though it is often misinterpreted as a decision tool to focus on the “most profitable” customers.
I found Blink
by Gladwell to be highly entertaining but like Blunder it was about stories and not practical recommendations.
And I also like The Black Swan
and Fooled by Randomness
as critiques of the mainstream risk and investment advice (these books rejuvenated my skepticism).
By Presh Talwalkar on Jan 9, 2009