Non-Linear Thinking Lessons from Freakonomics

If you have read the book, you would have probably been intrigued in a very amusing way. The insights and findings are shocking, the relationships and parallels drawn are a clear sign of genius. Very interesting to know certain statistics (like the fact that sending your kid to a friend's house who has a pool is more dangerous than having them go to a friend who's father owns a gun!). Apparently, more kids die drowning in a swimming pool, than from accidents related to guns. The main lesson in all the findings is almost the same. Don't rely on your gut feeling, or any heuristics you may have about a certain decision, but look at data.

Great information, a big hit to our instinctive thinking, and a reminder that the facts can be completely different from what we feel they are.

The problem is that it ends there. You learn the facts and know that you should be more concerned if your kid wants to go swimming at a friend's house. Most of the stuff is like this. It is a great display of genius and insight, but it hands us ready-made facts based on years of study and data analysis. It gives us a fish, but doesn't teach us how to fish. It's just like if I tell you that eating potatoes is more beneficial than you thought, and that research shows that if you have 5 potatoes per week, you are 27.5% less likely to get a heart attack. Ok, so I start eating more potatoes, if I have the discipline, and that's it.

I'm much more interested in lessons that can become tools for thinking and can be used in other situations. I'm interested in becoming a fisherman. 

There was one really valuable thinking tool that I was able to extract, and is really helpful in explaining many personal and economic behaviors. This is basically the non-linear (on non-absolute) way we take positions toward a certain topic.

This lesson / tool struck me through the Sumo wrestlers study. It shows that the wrestlers are willing to lose certain fights in certain situations. When the stakes are high (determining whether or not a wrestler goes down to the lower levels), things aren't as straightforward as they seem. Wrestlers are likely to have a tacit arrangement, whereby "I let you win this time if you let me win the next time I'm in need". Since one of wrestlers doesn't have much to lose by loosing, they gain a future favor from their opponent who is desperate for winning.

The important learning it gave me is to stop dealing with people's positions in an absolute manner. "This consumer is loyal", "this person loves me", "my boss is really into this project", "the company wants me". All these statements are wrong regardless of whether or not they are true in the moment. The reason is that they are incomplete descriptions of the positions of these people.

To complete these arguments, we need to mention the conditions under which they remain true. The company is really into this project, as long as ... is a more complete argument. The 'as long as' part is crucial, because it might get the other person to have a completely different position, even against their initial position, because their incentives have changed.