Informed Bets

My last post was about limitations of the human mind and why we should be willing to doubt our conclusions and beliefs. This post contrasts my last post to argue that we can trust the informed bets that our brains make. Our brains and bodies do not have the capabilities to fully capture all of the information necessary to perfectly replicate reality in our minds, but they can do a good job putting information together in a way that helps us successfully navigate the world and our lives. Informed guesses, that is assumptions and intuitions based on experience and expertise rather than random and amateurish judgements, are actually very useful and often good approximations.

 

“Intelligence…” Gerd Gigerenzer writes in his book Risk Savvy, “is the art of making informed guesses.” Our brains make a lot of predictions and rely on heuristics, assumptions, and guesses to get by. It turns out that our brains do this well, as Gigerenzer argues in his book. We don’t need to pull out graph paper and a scientific calculator to catch a football. We don’t need to record every thought and action we have had over the last month to know if we are happy with our New Year’s resolutions and can keep them going. When we see someone standing in a long customer service line at the grocery store we don’t need to approach them with a 100 point questionnaire to know whether they are bored or upset.  Informed bets and reasonable guesses are sufficient for us to have decent and functional understanding of the world.

 

Gigerenzer continues, “Intelligence means going beyond the information given and making informed bets on what’s outside.” This quote is introduced after an optical illusion, where a grayscale checkerboard is shown with a figure casting a shadow across the board. Two squares on the board are the same shade of gray, yet our minds see the squares as different colors. Our minds are going beyond the information given, the literal wavelength of light reaching the back of our eyes, and making informed bets on the relative colors of the squares on the board if there was not a figure to cast a shadow. In the case of the visual illusion, our brain’s guess about reality is actually more helpful for us than the literal reality of the same colors of the squares in the image.

 

Bounded rationality is a serious concern. We cannot absorb all the information that exists in the world which may help us make better decisions. However, humans are intelligent. We can use the information we receive and make informed bets about the best choices and decisions available. We might not be perfect, but by making informed bets and educated guesses we can successfully come to understand the world and create systems and structures that help us improve our understanding over time.

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