The Undoing Project summary

The Undoing Project is a fascinating book which looks at the relationship between two psychologists, Amos Tversky and Daniel Kahnemann, and the implications it had for understanding human nature.

The book looks at how their work on heuristics and decision making demonstrated the common errors in the human psyche. We also see how their fruitful partnership broke apart due to disagreements between the two.

If you’ve read Thinking, Fast and Slow by Kahnemann, then this is a book you should read. It will give you an overview of how their theories were developed and a background into the two individuals who’ve contributed so much to our understanding of the human psyche.

The relationship between the two is fascinating and one of the joys of the book. Lewis has a great knack for getting into the nitty-gritty of his subjects and we learn what fuelled the work of Kahnemann and Tversky and how they knitted so well together.

This The Undoing Project summary will look at the key lessons from the book and from the work of these two fantastic and fascinating individuals.

The Undoing Project summary

  • 1-sentence summary: The Undoing Project looks at the relationship between Amos Tversky and Daniel Kahnemann and how it changed our understanding of the human mind forever.
  • Author: Michael Lewis
  • Year published: 2017
  • Pages: 358
  • Rating: 8/10

Takeaway 1 – The human mind is complicated

As if we didn’t know this already, this book confirms how complicated the human mind is. Their paper on judgement under uncertainty highlighted how we fall back on biases and heuristics to make decisions.

When faced with difficult choices we revert to biases we hold, many of which we might not be aware of. what this shows is that we’re not the rational creatures we think we are.

One of the cornerstones of economics is that humans are able to make decisions based on perfect information, but this is false. It’s what Naomi Klein explores in The Shock Doctrine and what Kate Raworth shows is a fallacy in Doughnut Economics.

Far from having perfect information, most of the time we’re making educated guesses based n our own biases and preferences.

You may notice this about yourself from time to time. You make decisions you can’t explain, or faced with a plethora of choices, such as at an ice cream store, you revert to your standard choice.

What Kahnemann and Tversky show is we’re more reliant on these heuristics than we realise. Something we should all remember when we’re faced with difficult choices in the future.

Takeaway 2 – Aversion to loss is greater than the desire to secure gains

If you could take a guaranteed $1,000 or risk on a bet to win $2,000 and double your money what would do?

For most people, this is a difficult decision. You can take $1,000 if you want no questions asked. Yet, if you take a risk, you can potentially double your money.

The answers to this question fascinated Kahnemann and Tversky. Through their work, they found most people preferred to take the sure thing rather than gamble and take a shot at winning more money.

What this shows is that people have a greater aversion to loss than they do an inclination to take a risk. Whether this is rooted in evolutionary biology is debated.

It could be that our ancestors desired to fiercely protect what they had rather than take a chance on finding something bigger and better.

Although considering the spread of humanity across the globe, especially Polynesians travelling across the Pacific, this might not always be the case.

What this does show though is an inherent bias towards aversion rather than risk-taking. In the scenario above, you should look to take the risk.

You’re starting from zero. Sure, you could take a guaranteed $1,000, but you could also double your money. Considering the reward is double the sure thing, it’s a gamble worth taking.

Takeaway 3 – Even the best relationships can break down

Kahnemann and Tversky were so close a lot of their friends thought they resembled a married couple. they spent hours and hours together picking each other’s brains and devising new theories on the human psyche.

Their relationship was so tight they followed each other from Israel to the US to continue their working relationship. This was fruitful and stimulating it was for both parties.

But, like most relationships there were challenges. In an environment as fraught and competitive as academia, there were bound to be disagreements at some point.

One of the main problems in the relationships was Danny felt overshadowed by Amos. While Amos didn’t see who got the credit for their work as an issue. This is where the seed of the fallout began.

The fallout was exacerbated as organisations tended to only recognise Amos rather than Danny, and ignored their collaboration.

They ended up not speaking to each other as their failure to come to terms led their disagreement to worsen. especially after Amos refused to recommend Danny to the National Academy of Sciences when they asked him about membership.

A few day after this, Amos rang Danny to let him know he had cancer and he had six months to live.

The sad end to their relationship highlights how even the strongest of relationships can fail. Amos and Danny had worked together for years and were formidable partners.

Yet, they still quarrelled. what does this say about us?

Well, it shows even the smartest people can have disagreements and that we’re complex creatures. It also shows how if you don’t speak openly about issues resentment can fester and lead to problems down the line.

Favourite Quotes

  • “The limits of any model invited human judgement back into the decision-making process – whether it helped or not.”
  • “The trouble with philosophy, Amos [Tversky] thought, was that it didn’t play by the rules of science. The philosopher tested his theories of human nature on a sample size of one – himself. Psychology at least pretended to be a science. It kept at least one hand at all times on hard data. A psychologist might test whatever theory he devised on a representative sample of humanity. His theories might be tested by others, and his findings reproduced, or falsified. If a psychologist stumbled upon a truth he might make it stick.”
  • “People find it a remarkable coincidence when two students in the same classroom share a birthday, when in fact there is a better than even chance, in any group of twenty-three people, that two of its members will have been born on the same day. We have a kind of stereotype of ‘randomness’ that differs from true randomness. Our stereotype of randomness lacks the clusters and patterns that occur in true random sequences.”
  • “Man’s inability to see the power of regression to the mean leaves him blind to the nature of the world around him. We are exposed to a lifetime schedule in which we are most often rewarded for punishing others, and punished for rewarding.”
  • “When choosing between sure things and gambles, people’s desire to avoid loss exceeded their desire to secure gain.”

The Undoing Project review

This The Undoing Project summary has looked at this fascinating book by Michael Lewis on the working relationship between Amos Tversky and Daniel Kahnemann.

It’s an incredible story as the two psychologists make their way to Israel, work in a university and come together to change our understanding of the human psyche.

It’s hard to understate just how much they have contributed to science. They have presented us with an insight into the workings of our mind and how we can be tricked by our own biases.

What’s remarkable about the two is they were in the Israeli military together at one point and their work helped to streamline the processes in the army. Not only were they fighting on the frontline but they were doing psychological behind the scenes too.

This is one of Michael Lewis’s best books in my opinion. He presents a clear picture of how the two worked together, their accomplishments and their eventual falling out.

It’s a brilliant piece of writing and leaves you in awe at what they accomplished. Most of you will enjoy the book, even if you’re not interested in the subject matter.

This is the genius of Lewis’ work, he’s able to take a subject which a lot of people won’t know a lot about and make it accessible.

He did this with baseball statistics in Moneyball and the world of high-frequency trading in Flash Boys. The Undoing Project follows in a similar vein.

Who should buy The Undoing Project?

If you’ve read Thinking, Fast and Slow, you’ll love this book. It’s a great overview of the working relationship between the two psychologists.

Anyone who has read any books by Michael Lewis will love The Undoing Project. This is one of his best books and it will keep you glued from start to finish.

If you’re interested in psychology and the process that goes into uncovering scientific insights, you’ll find this book fascinating too.