Quantitative Decision-Making

I recently read a piece by Robert X. Cringely, Previous Welcome to the Post-Decision Age, where he reviewed Michael Lewis’ latest book The Undoing Project. Lewis’ book is about the research efforts of Daniel Kahneman and Amos Tversky, the two psychologists who developed the field of behavioral economics. I am a big fan of both Michael Lewis and Kahneman and Tversky. Kahneman won the 2002 Nobel Prize in economics (Tversky, supposedly the smarter of the two, died a few years before, in 1999, and one cannot receive the prize posthumously). In any event, behavioral economics is broadly a field of economics that seeks to devise a coherent theory to explain why standard economic theories appear to be violated in practice. In essence, Kahneman and Tversky  over the years observed many experimental instances where individual behavior violated the economic theory of rationality.

Lewis’ latest book (that I confess I have been unable to read yet), however, is concerned with the role of quantitative analysis in decision-making. Cringely does an excellent job of describing this phenomenon using analogy. According to Cringely, an old time archery instructor, there are two types of archers that he labels “sight-shooters” and “instinct-shooters.” Sight-shooters are like decision-makers who rely upon data. They slowly and carefully line up each and every shot to only shoot at the optimal time. “Instinct-shooters,” however, are like individuals who decide from the gut. They shoot when it feels right.

Not surprisingly, I have observed this dichotomy in academia, but worse. Most people in leadership positions at colleges and universities are Cringely’s instinct-shooters. They are deans, provosts and chancellors who shoot from the hip. They believe in their guts that they know the truth, so they look for numbers that support that. Instead of using data to guide them, they use data to support instinct and opinion. How have we ended up in a situation where higher education is dominated by instinct-shooters? Well, part of the reason is that most disciplines don’t necessarily involve statistical or mathematical analysis. Another part is that most of these leaders are 60 years or older where analysis becomes physically more challenging and experience and instinct begin to dominate. I’ve been a chess player for 45 years and in chess it is pretty commonly known that older players begin to study less and begin to rely on their experience more. Compounding this is the extensive advances in statistical methods that have occurred over the last 20 or so years. These leaders of academia were well-established by then; they were tenured and had stopped advancing with the state of art.

Such a situation is not normally fatal – look at politics and governing. We do not typically elect young people, but the people we do elect tend to appoint young, energetic, intelligent, and capable subordinates to help frame policy. So, what’s the problem?

Remember, that, by and large, the leaders in higher education were all college professors. Yes, college professors with PhD’s who have spent decades at least pretending to be oracles of wisdom and knowledge. In my experience college professors are some of the most arrogant, discriminatory people around. They are so confident of their abilities (they do have PhD’s and ARE college professors) that they believe no matter how little time they think about something, the decisions they make will be right. If they discriminate against you because you are old, or female, or black, that’s okay because it’s what they decided and see everything. Free speech is only available when you agree with them. They are SO smart, they can do anything and everything.

So, at this point we have an instinct-driven leadership who almost uniformly suffer from some sort of “god complex” and who lack the ability to collect and use meaningful data. No, the crisis in higher education will likely be getting worse and will likely last another 10 or 15 years until the next wave of leadership retirements. But hey, cool dining halls, dorms and athletic facilities!

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