Kahneman: When noise destroys our best of choices

The transcript is here, along with the podcast and blurb:

"Making decisions is one of the hardest things required of us as human beings. Add to this the elements of noise (variability in judgments that should be identical) and bias (judgment errors that are consistent), and it’s a wonder we ever make good decisions.

"On this episode, we talk to famed psychologist, economist, Nobel Prize winner, and author of Thinking, Fast and Slow and Noise: A Flaw in Human Judgment Daniel Kahneman about how we can identify when noise and bias interfere in our decisions and reduce their role in the process so we can make our best possible choices. Listen, learn, and enjoy!"

For example, at 12:50 he discusses the difference between bias and noise:

"I take a measurement analogy actually. Suppose you are trying to measure a line and you measure it with a very fine ruler and you measure it repeatedly. Now, the first thing that's going to happen is you're not going to get exactly the same number every time. So if the scale is fine enough, there's going to be variation. That variation is noise. You are measuring the same object. The measurements in principle should be identical, but they vary. That's noise. And it's different from bias. Bias is if you are consistently and fairly consistently overestimating the length of the line, that's a bias. If you're underestimating, that's the bias, but you could have no bias. You could on average be just accurate. And yet there's substantial variation. That variation is noise, and it's the same with respect to judgment."