Noise

by Daniel Kahneman

February 09, 2025

Overview

"Noise: A Flaw in Human Judgment," published in 2021, is a collaborative work by Nobel Prize-winning psychologist Daniel Kahneman, management consultant Olivier Sibony, and legal scholar Cass R. Sunstein. The book delves into the concept of "noise"—the random variability in human judgement—and its significant impact on decision-making across various fields. Drawing on extensive research in psychology and behavioural economics, the authors explore how noise contributes to errors and what can be done to mitigate it.

Central Thesis

The central thesis of "Noise" is that human judgement is not only plagued by biases but also by noise, which is the unwanted variability in decisions made by different people or by the same person under different conditions. This variability can lead to significant errors and inconsistencies, undermining the fairness, accuracy, and efficiency of decision-making processes. The book argues that by recognizing and reducing noise, individuals and organisations can make more consistent and effective decisions.

Key Strengths

  1.  Insightful Analysis: Provides a thorough examination of the concept of noise, supported by extensive research and real-world examples.

  2.  Practical Applications: Offers practical strategies for recognizing and reducing noise in various fields, including medicine, law, public health, and business.

  3.  Engaging Writing: The authors present complex ideas in an accessible and engaging manner, making the book suitable for a broad audience.

  4.  Interdisciplinary Approach: Integrates insights from psychology, behavioural economics, and decision science to provide a comprehensive understanding of noise.

Structure of the Book

The book is divided into three main parts:

  1.  Part I: The Nature and Impact of Noise: Explains what noise is and how it affects decision-making processes, highlighting its pervasive impact across different fields.

  2.  Part II: The Sources of Noise: Delves into the cognitive and psychological factors that contribute to variability in judgments, including individual differences and situational influences.

  3.  Part III: Strategies for Reducing Noise: Offers practical advice on how to reduce noise, including techniques for improving calibration, standardising decision-making processes, and increasing consistency in judgments.

Key Concepts and Practical Insights

The book introduces several important concepts and actionable strategies:

  •  Noise: Unwanted variability in judgments that leads to inconsistent decisions. Conduct noise audits to identify and measure variability in decision-making processes.

  •  Decision Hygiene: Practices aimed at reducing noise and improving the quality of decisions. Implement standardised procedures and checklists to minimise variability.

  •  System Noise: Variability in judgments that arises from differences between individuals or within the same individual over time. Use algorithms and data-driven approaches to reduce system noise.

  •  Pattern Noise and Occasion Noise: Different types of noise that affect judgments. Train decision-makers to recognize and mitigate the impact of these noise types.

  •  Algorithmic Decision-Making: The use of algorithms to reduce noise and improve consistency in decision-making. Develop and refine algorithms to ensure they are free from biases and effectively reduce noise.

Memorable Quotes

  •  “Wherever there is judgement, there is noise—and more of it than you think.”

  •  “Bias is the star of the show. Noise is a bit player, usually offstage.”

  •  “To understand error in judgement, we must understand both bias and noise.”

Critique

While the book is generally well-received, some critics argue that it can be repetitive and overly detailed. The material may be dense for readers not deeply interested in psychology or decision science, and some feel that the book could have been shorter without losing its core messages.

Target Audience

"Noise" is particularly valuable for professionals in fields where decision-making is critical, such as healthcare, law, and business. It is also suitable for policymakers, researchers, and anyone interested in understanding and improving human judgement.

Conclusion

"Noise: A Flaw in Human Judgment" offers a compelling and insightful exploration of the variability in human decision-making. Kahneman, Sibony, and Sunstein provide a thorough analysis of noise, supported by practical strategies for reducing it. The book challenges readers to rethink their assumptions about decision-making and offers a fresh perspective on how to make better judgments. Its interdisciplinary approach and engaging writing make it an essential read for anyone looking to improve the consistency and effectiveness of their decisions.