Say you’ve got some money to invest and you’re trying to figure out if the stock market will go up or down. Should you ask one expert’s advice? Or should you ask lots of people what they think?
Although it may seem counterintuitive, you’ll likely get the best estimate of stock market volatility by asking many investors rather than one trusted financial adviser. Research shows that averaging the guesses of a large number of people is almost always more accurate than an individual estimate.
This is just one of the many nuggets of advice in the new book by Tom Gilovich, the Irene Blecker Rosenfeld Professor of Psychology in the College of Arts and Sciences, and Lee Ross (Stanford University), “The Wisest One in the Room: How You Can Benefit from Social Psychology’s Most Powerful Insights.”
Wisdom, unlike intelligence, requires insight into people: their motivations, fears, desires and passions. Gilovich and Ross draw on the latest research in social psychology and behavioral economics to elaborate on that insight. Their goal, says Gilovich, is to aid readers in dealing with a vast number of critical problems and practical issues, from how to achieve happiness to how to address personal and societal conflicts. The book tackles some of the 21st century’s most intractable problems: climate change, conflicts in the Middle East, achievement gaps in U.S. schools and income inequality.
“In tackling any applied behavioral problem, it is essential to understand the details – especially the hidden and subtle details – of the web of situational forces acting on the individuals whose behavior one wants to change,” write Gilovich and Ross. “But it is also essential to understand how those forces are interpreted by the individuals who face them and to be aware of the various filters and lenses that guide, and potentially distort, their interpretations.”
The book is written in a friendly, engaging style, with the authors referring to one another by first name and drawing examples from their own lives. They also use figures like Nelson Mandela and Franklin D. Roosevelt as examples, deciphering the wise – and sometimes unwise – choices made by historical figures with lessons learned from psychology research.
Groups, too, are addressed. For example, why did so many people choose to remain in New Orleans during Hurricane Katrina, despite being told to evacuate? Those who blame the victims’ intelligence are committing the “fundamental attribution error,” write the authors, which happens “whenever we overestimate the extent to which people’s actions…are reflections of the kind of people they are – and underestimate the extent to which they are the product of situational influences.”
And it’s no surprise that when two people disagree about some pressing social or political issue of the day, each is likely to accuse the other of being biased. But other people’s biases are much easier to see than our own, and the authors explain why.
Each section of the book closes with a summary of what lesson the “wisest person in the room” would draw from the research explained or the principle cited. Readers with the foresight to jot down these lessons will be well armed for approaching future decisions, conflicts and relationships, and well positioned to gain some wisdom of their own.
Gilovich’s first book, “How We Know It Isn’t So,” was named by the Washington Post as one of the best books ever written about human irrationality. His other books include “Why Smart People Make Big Money Mistakes” and “Heuristics and Biases: The Psychology of Intuitive Judgment.”
This article also appeared in The Cornell Chronicle.