One of my favorite pieces from Daniel Kahneman’s book Thinking Fast and Slow, was the research Kahneman presented on mental substitution. Our brains work very quickly, and we don’t always recognize the times when our thinking has moved in a direction we didn’t intend. Our thinking seems to flow logically and naturally from one thought to the next, and we don’t notice the times when our brains make logical errors or jumps that are less than rational. Mental substitution is a great example of this, and one that I know my brain does, but that I often have trouble seeing even when I know to look for it.
Kahneman writes, “When the question is difficult and a skilled solution is not available, intuition still has a shot: an answer may come to mind quickly – but it is not an answer to the original question.”
The example that Kahneman uses is of a business executive making a decision on whether to invest in Ford. To make a smart decision, the executive has to know what trends in the auto industry look like and whether Ford is well positioned to adapt to changing economic, climate, and consumer realities. They need to know what Ford’s competition is doing and think about how Ford has performed relative to other automobile companies and how the automotive sector has performed relative to other industries. The decision requires thinking about a lot of factors, and the executive’s time is limited, along with the amount of information they can hold in their head, especially given the other responsibilities at home and in the office that the executive has to worry about.
To simplify the decision, the executive might chose to answer a simpler question, as Kahneman explains, “Do I like Ford cars?” If the executive grew up driving a Ford truck, if they really liked the 1965 Mustang, or if the only car crash they were ever involved in was when a person driving a Ford rear-ended them, their decision might be influenced by an intuitive sense of Ford cars and people who drive Fords. Also, if the investor has personnaly met someone within the executive team, they may be swayed by whether or not they liked the person they met. Instead of asking a large question about Ford the company, they might substitute an easier question about a single Ford executive team member.
“This is the essence of intuitive heuristics,” writes Kahneman, “when faced with a difficult question, we often answer an easier one instead, usually without noticing the substitution.”
Often, we already have a certain feeling in mind, and we switch the question being asked so that we can answer in line with our intuition. I grew up driving a Ford, so I might be inclined to favor investing in Ford. I might answer the question of investing in Ford before I am even asked the question, and then, instead of objectively setting out to review a lot of information, I might just cherry pick the information that supports my original inclination. I’m substituting the question at hand, and might even provide myself with plenty of information to support my choice, but it is likely biased and misguided information.
It is important to recognize when these prejudices and biases are influencing our decisions. By being aware of how we feel when asked a question, we can think critically to ask if we are being honest with the question that was asked of us. Are we truly answering the right question, or have we substituted for a question that is easier for us to answer?
In the question of cars and investments, the cost might not truly be a big deal (at least if you have a well diversified portfolio in other respects), but if we are talking about public policy that could be influenced by racial prejudice or by how deserving we think another group of people is, then our biases could be very dangerous. If we think that a certain group of people is inherently greedy, lazy, or unintelligent, then we might substitute the question, “will this policy lead to the desired social outcome” with the question, “do I like the group that stands to benefit the most from this policy?” The results from answering the wrong question could be disastrous, and could harm our society for years.
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