Maxims for Thinking Analytically: The wisdom of legendary Harvard Professor Richard Zeckhauser

by Dan Levy

This book will help you think more analytically. Doing so will enable you to better understand the world around you, to make smarter decisions, and to ultimately live a more fulfilling life. It draws on the maxims of Richard Zeckhauser, a legendary Harvard professor, who has helped hundreds of students and colleagues progress toward these goals. These maxims, one-sentence nuggets of wisdom that capture key principles for clear and effective thinking, are illustrated with practical examples from Richard’s colleagues and students. From these examples, you will learn how one colleague saved money on her wedding by thinking probabilistically, how Richard and his wife Sally made an agonizing health decision that significantly boosted Sally’s survival probabilities, and how the prime minister of Singapore, Lee Hsien Loong, used a maxim he learned from Richard 40 years ago to understand and deal with COVID-19 in his nation. This book provides vital insights for anyone who wants to think more effectively about the world. The author, Dan Levy, teaches at the Harvard Kennedy School, where he has been a close faculty colleague and mentee of Richard Zeckhauser for more than 15 years.

Genres: Psychology, Self Help, Nonfiction, Philosophy, Science, Personal Development, Unfinished

252 pages, Paperback

Published June 25, 2021

Reviews

[عبدالرحمن عقاب · Rating 2 out of 5]

"ريتشارد زيخوسر" أستاذ أكاديمي في هارفارد. له أقوال في عالم التفكير، يعلّمها كمبادئ لطلبته.
المؤلف اختار من تلك الأقوال العامة، ما رآه حكمًا تستحقّ الشرح، وضرب الأمثلة. وجمعها في كتابه هذا.
الأقوال جيدة وصادقة لكنّها ليست حكمًا فريدة! ولا يستحقّ جلّها الشرح والتوضيح والتمثيل. وللمؤلف أسلوب سخيف في التعريف بكلّ اسم يذكره، فيكتب أمام الاسم وصفًا مسهبًا عن وظيفة الشخص ودرجته الأكاديمية وعلاقته بـ"زيخوسر"!
الاطلاع على فهرس الكتاب يغني القارئ ويكفيه، والزيادات في الشروح قليلة النفع.

[Lams · Rating 2 out of 5]

Interesting maxims, briefly presented. I appreciate brevity and readers will find some relevant and actionable advice in this book. But I felt the writing unimaginative. It seems the author has fired off a questionnaire to a bunch former students and colleagues of Zeckhauser, and then pasted answers into the maxime text with the best or least bad fit. If Zeckhauser is such an inspirational figure, he deserves something more than a feedback survey collection of anecdotes to show it.

[Sanford Chee]

Recommended by Nick Sleep, Charlie Munger & @mjmauboussin
https://twitter.com/mjmauboussin/stat...

Investing in UU (Unknown & Unknowable) 2006 is a tour de force
https://twitter.com/SanfordChee/statu...

Maxims for thinking straight:
*Pick an extreme case to clarify thinking - what if energy costs 0? Look at outliers. Consider the best & worst case from this going to extreme scenario.

*Occam’s razor; go to a simple case. Clarify thinking by going to extreme and/or simple cases. “Astute choices of technique is preferable to virtuoso but misguided computation.”

*Don’t take refuge in complexity. Appropriate simplification is the great art of modelling. Avoid black box algorithms w/o understanding underlying intuition. Is added complexity essential to solve the problem?

*Use analogies eg everyday examples. What’s the cost of experimentation? The larger the uncertainty w/ the same expected probability of success, the > you should try the new bucket. If you mistakenly conclude tt the old pdt is superior, & discard the new pdt for good, you’ll never learn > abt the new pdt. There’s no switching back. AMZN - Reversible vs irreversible decisions:
https://fs.blog/reversible-irreversib...

Think of optionality/real options: projects w/ >uncertain outcomes are likely to be >interesting & potentially higher impact eg crypto. Being the 1st person to explore Blue Ocean strategy is >interesting & potentially>rewarding vs combing over a well trodden, widely explored area.
Peter Thiel: competition is for losers
https://youtu.be/3Fx5Q8xGU8k

Maxims for tackling uncertainty:
*The world is >uncertain than you think
Black swan = highly improbable event with 3 principal characteristics: (1) it is unpredictable; (2) it carries a massive impact; and, (3) after the fact, we concoct an explanation that makes it appear less random, and more predictable, than it was.
"There are known knowns — there are things we know we know. We also know there are known unknowns — that is to say, we know there are some things we do not know. But there are also unknown unknowns, the ones we don’t know we don’t know.” -Donald Rumsfeld
Einsenhower Phenomenon just because Einsenhower at age 24 had a minuscule chance of becoming President doesn’t make it likely that a better qualified candidate at age 24 will become the future President. 1/10k odds may be 10x better than 1/100k but it’s still highly unlikely.

Probabilities are known + state of the world is known = risk e.g. gambling
Probabilities are unknown + state of the world is known = uncertainty (i.e there is a negative state of the world but we don't know the probability distribution)
Probabilities are unknown + state of the world is unknown = ignorance/unknown unknowns (realm of Black Swans)

Bayesian probability: ask myself what information if it becomes known to me would cause me to update my prior probability? Prior Probability + New Info => update Posterior Probability
When updating probabilistic outcomes, use all available info that’s relevant including info fr the decisions of others. Put yourself in the shoes of those better informed especially if they have clear incentives. Why did they make the decisions they did? E.g. in the early days of COVID, why would the Chinese government who had > & better info than the RoW shutdown an important industrial centre like Wuhan & curfew millions of citizens if the risks were not severe? What should the actions & decisions of these better informed actors tell me?
Think probabilistically: instead of thinking what I can do to determine the outcome, think instead of what I can do to influence/improve the range outcomes.

*Status quo bias. Richard Thaler Nudge & framing of default options.

Maxims for decision making:
*Decision trees - what info gathering can help me better ascribe probabilities to expected outcomes? Coz good decisions can ‘ve bad outcomes if I’m unlucky.

[Mark · Rating 2 out of 5]

Maxim 9: Some decisions have a high probability of a bad outcome. Seriously.
If you know many people who went to Harvard, you know that people who went to Harvard really want you to know that they went to Harvard.

Everything about this book is geared to the ignorant slobs who didn't make it to Harvard. A dash of probabilistic thinking to help the illiterate masses cope in a world run into the ground by douchebags who went to Harvard, or Yale.

Oh, and another Forward by Larry @#*!ing Summers. When will I learn?

[John Banner · Rating 3 out of 5]

In this book, the author aims to share a variety of Maxims that were espoused and used by Richard Zeckhauser, a widly known and respected Economist at Harvard Kenedy School. The Maxims are much like Mental Models, but I would say even more basic than that - they form the tools by which we use and create Mental Models.

The author shares these, by providing a fairly brief discussion of each and how it is used, then sharing the stories of various of Richard's students, friends and colleagues. One of the other reviewers of this book complains that the author does not go deep enough into each of these, and in some repects this is a reasonable criticism. But there is enough here to make use of them, and if I get the sense of Richard well enough from this book, I suspect his attitude would be one of: You will get more value by going out and using it than you will by reading about it. There is enough in the descriptions and discussion to use these maxims, and while I agree that the book could be more engrosing, I would say it's definitely a worthwhile read.

[John Crippen · Rating 3 out of 5]

Nineteen maxims about how to make better decisions. A tribute from students and colleagues of professor Richard Zeckhauser. This is another one of those books that makes you wonder why we don't teach these skills earlier in the education process. Thanks to Mario (another student of Zeckhauser) for the recommendation.

[Arunkumar Maniam Rajan · Rating 5 out of 5]

Awesome framework for thinking Analytically.

Good collection of Maxims. Good examples of how each one is implemented. Might be little hard to read. I did it in 3 days splitting it into three 2 hour reading sessions, reading light in the sections that had more than one example. As an additional advantage you get to people from various fields.

[Bharadwaj Machiraju · Rating 2 out of 5]

Nothing new if you have been looking at mental models for quite some time

[Charlie Pozniak · Rating 5 out of 5]

Legend of a man.

[Denis Vasilev · Rating 5 out of 5]

Book about rational thinking and decision making by disciples of Harvard professor Richard Zeckhauser. Nothing really surprising, but practical and easy to use in real life by everyone, not only policymakers

[Jo E. · Rating 5 out of 5]

Clear-cut and concise, with ample examples to delve deeper if you so choose. Still, I think it could be further distilled from 19 Marxism’s to 13:

THINKING STRAIGHT
1) Consider extremes (e.g. Person A and B take 2 and 3 hours to paint a room, respectively. Why not 2.5 if they collab? Consider if just A is painting… if B helps it must be shorter, no?)

2) Simplify (e.g To decide between PhD in Economics or Policy, do you want to study narrow problems precisely or broad problems imprecisely? e.g to train neural networks for AGI, test on a simple task any human could do but that requires extreme skill to do without specific training, e.g. complex models whose results are a mystery are not useful, but simple models that can be translated into intuitive insights are, e.g. science of hitting a baseball vs “Hands, Hips, Head”)


UNCERTAINTY

3) The world is more uncertain than you think so think probabilistically about the world (e.g. FiveThirtyEight gave Trump 29% chance of winning the 2016 election yet everyone was shocked. Distinguish between Risk, Uncertainty, and Ignorance on the known/unknown States of World & Probabilities matrix, and follow these steps: understand subjectivity of most real-world probability, assess probability, update when new info arises. Practice with low-stakes e.g. what is the probability the cashier asks for your ID. Update your prior to posterior if they check the person in front of you)

4) Uncertainty causes you to favor the status quo. This can cause you to pass up high-upside options. (e.g During early days of COVID, some in medical field argued for status quo of no treatment until proven with RCT. But given long time for RCT, high # of patients, and high death rate, Maryaline Catillon, a hospital director in France, argued for less rigorous observational studies to inform treatment in the interim). The Niagara Falls example: You need to transport 100 objects over Niagara Falls analogy: Bucket A worked 70/100 times, Bucket B worked 1/2 times. Tempting to use Bucket A. But you should use Bucket B for several more times to learn more about its performance, and then switch back to A if appropriate. Same in evaluating whether to invest time and effort into a project. Projects with uncertain outcomes, or areas that have never been explored, are more interesting, and potentially higher gain.

DECISIONS

5) Good decisions can have poor outcomes (e.g. expected cost of buying iPhone insurance is higher vs not buying for most people, but it still hurts when you drop your phone).

6) Some decisions have high probability of bad outcome (e.g any child welfare policy has a high probability that some children will still be abused or neglected. As a result, child welfare directors too often have short terms which results in unstable leadership for state agencies, which makes things worse for children and families.)

7) Errors of commission should be weighted the same as errors of omission (e.g selling $20K Amazon stock in 1998 vs. not buying $20K Amazon stock in 1998 should be weighted equally, but omission bias leads most to weight errors of commission higher)

8) Don’t be limited by options in front of you (e.g. don’t stick with the statin that gives you sweaty palms when there are tens of other options out there that may not have the side effect. I actually think this is a poor example and more illustrative of the Niagara Falls effect. Instead, consider that there are options you don’t know about at all yet - seek them out before evaluating next steps.)

9) Info only valuable if it can change your decision (e.g. the Data Team conundrum! e.g. doctor thought Richard’s mother either had appendicitis or a tumor and wanted to keep her overnight to learn more. But either way they’d operate, so Richard pushed to operate immediately. They did, and found a leaky appendix and peritonitis - waiting to operate would have been extremely dangerous.)

UNDERSTANDING POLICY

10) Long division is the most important tool for policy analysis (i.e. basic benefit per unit of cost calculation).

11) Elasticities are a powerful tool for understanding many important things in life (e.g. “do you prefer to spend your time at work, with family, or on personal projects” is a bad question. Instead think about the value of your last (marginal) work hour

12) Heterogeneity in the population explains many phenomena (e.g. Stanford University president Hennessy argued that early admissions are fair bc average SAT score is 210 points higher for early admission. But actually need to compare lowest SAT score for early admission against highest score denied in general admission.)

13) Capitalize on complementaries (e.g. running a tennis camp - you need to scale instructors in line with tennis courts). This is the same as The Goal bottleneck concept.

[Taufiqur rahman · Rating 3 out of 5]

Key Points:

1. **Define the Problem Clearly**:
- Start by understanding the core issue. Avoid vague or overly broad questions.
- Break down complex problems into smaller, manageable components.

2. **Question Assumptions**:
- Challenge underlying assumptions in any argument or analysis.
- Be aware of biases, both your own and those of others.

3. **Use First Principles Thinking**:
- Strip problems down to their fundamental truths and rebuild from there.
- Avoid relying solely on existing frameworks or conventional wisdom.

4. **Embrace Intellectual Humility**:
- Acknowledge the limits of your knowledge and be open to new perspectives.
- Recognize that being wrong is an opportunity to learn.

5. **Think Probabilistically**:
- Evaluate outcomes in terms of probabilities rather than certainties.
- Use data and evidence to inform your judgments.

6. **Seek Simplicity**:
- Avoid overcomplicating solutions. The simplest explanation is often the best (Occam’s Razor).
- Focus on clarity and precision in communication.

7. **Iterate and Refine**:
- Analysis is an iterative process. Continuously refine your thinking as new information emerges.
- Be willing to revise conclusions in light of better evidence.

8. **Leverage Analogies and Frameworks**:
- Use analogies to draw insights from similar problems.
- Apply established frameworks (e.g., SWOT analysis, cost-benefit analysis) to structure your thinking.

9. **Think Long-Term**:
- Consider the long-term consequences of decisions, not just immediate outcomes.
- Avoid short-term thinking driven by emotions or pressures.

10. **Communicate Effectively**:
- Present your analysis clearly and concisely.
- Tailor your message to your audience, ensuring it is accessible and actionable.

[Edwin Goh Wei Qian · Rating 4 out of 5]

Overall, it is a decent book. My takeaway from the book is that the author wants readers to cultivate a habit of formulating and applying problem-solving frameworks as an integral part of their daily life. The five chapters of the book - Thinking Straight ("going to the extreme"), Thinking Uncertainty ("subjective probabilistic decision-making"), Making Decisions Understanding Policy ("long division cost-benefit analysis"), and Living Fully ("strive hard for the best") - provide readers some interesting 'maxims' for approaching different problems. Personally, I find the first maxim, i.e. "going to the extreme", most useful as policy researcher. It helps me to ground my thinking in reality, by checking its best and worst outcomes for my policy suggestions.

Whether you are working in policymaking or a reader looking to improve your analytical skills, I will strongly recommend this book to you.

[Apurva Misra · Rating 5 out of 5]

I loved all the maxims! And the beautiful examples used to explain them. This book is relevant to professional life as well as personal life. Helps make the right choices in life and to be happy with them. I have listed a few of them below-
1. Make a problem as simple as possible by thinking about the worst-case scenarios.
2. Always try to make good decisions (which does not mean good outcomes), decisions made methodically, and not regret their outcomes.
3. Always weigh the errors of your actions the same as the errors of your inactions (this one is really hard but important, we should take into account the opportunity cost of every decision we make)
4. Metrics to take into account while making decisions - long division (marginal benefit), elasticity (change in one quantity associated with a change in another quantity)

[Manoj Khilnani · Rating 4 out of 5]

My biggest question is why only Harvard students and why not kids from middle to high school be introduced to these maxims? This book very simplistically presents some great maxims taught or covered by Richard Zeckhauser as part of his course on 'Analytic Frameworks for Policy'. As the author says introducing the book, the purpose of this book or maxims is to help readers develop a more analytical mindset and bring in more clarity. This is exactly what is required not only in the grown-up world but also in the growing-up world. Highly recommend that education boards introduce part of these maxims in schools or at least make this book available as a high recommend in school and college libraries. Happy reading.

[ObjectivelyDan · Rating 4 out of 5]

I very much appreciated the lessons taught in this book, although I couldn't help but snicker at the absolute praise professor Richard Zeckhauser gets in this book I'm sure he's a great man and I would genuinely love to meet him, but there are North Korean tracts about the Kims that are more subtle in their praise.

If you need a boost in critical thinking, pick it up. If you've studied critical thinking for awhile, a lot of this might not be too new to you, but still a useful handbook to reference.

[Walter Boomsma · Rating 4 out of 5]

We need more books about thinking and decision-making! I appreciated the maxims and the frequent examples of how they might apply. I would concur, however, with other readers who felt the presentation was "unimaginative." Sometimes, it felt like I was reading testimonials by former students, teaching assistants, etc. This diminished the importance of the maxims by implying the importance of the book was the popularity of Zeckhauser and the people who had benefitted or shared in his work. There's a hint in title. Are we to learn about his wisdom or the legend?

[Himanshu · Rating 2 out of 5]

Book in some maxims or models applicability makes some classic errors in probability. Similar errors made by induction or using Bayes where not applicable. Does not share domain limitations of each model.

This is the same problem discussed in the logic of science by karl popper while even discussed by Deborah mayo (classic mistake made is taking probabilism for considering one can be never wrong, not the model is wrong).

Plus fails to get n=1,n=100,n= millions

Books is good for n=1 in some places

Except few errors in few maxims books is v good

[Eoghan Gill · Rating 1 out of 5]

Very basic, I had expected considerably more. There are some nice examples but the maxims themselves are very much statements of the obvious and do not add much beyond a very fundamental understanding of analytical thinking. The book reads as a homage to Professor Zeckhauser, he is name dropped 18-times in the first maxim alone and this was a little distracting, but perhaps I am being overly critical.

[Daniel · Rating 5 out of 5]

Analyze my Thinking

This is a book for everyone。 It broadened my perspective of how to make decisions，and realize that there are some things which we need to look at from a different point of view。 In other words，think outside of the box.

I apprecate the work that Dan Levy，not the actor from，“Shits Creek”， compiled from various individuals who knew Dr.RicardZeckhauser。 These maximums give us valuable tools for all people when making decisions in life.

[Ziad Daoud · Rating 3 out of 5]

My favourite three maxims of the book:‎
‎(1) Think probabilistically – the world is much more uncertain than you think.
‎(2) Use a decision tree, and its corollary: information is only valuable if it changes a decision.
‎(3) Long division is an under-rated tool for quantifying payoffs and general policy analysis.

[Joe Conley · Rating 4 out of 5]

Excellent insights and anecdotes about an extremely accomplished mutli-disciplinary mind. Regardless of your field, you would do well to read through this to improve both your personal and professional decision making.

[JAIME DIAZ PALACIOS · Rating 5 out of 5]

A must read for decisions makers

Maxims are expressed with conciseness and grace. Useful examples and a broad examples from the Harvard Kennedy School community. Better to think how to make decisions than nudge people what to do best…

[Barry C · Rating 5 out of 5]

While some of the maxims may seem obvious, it's not so obvious how Zeckhauser approaches them and how is students utilized them. It's a short book, relatively speaking, but it will remain with you for a long time.

[Sharad Ramnarayanan · Rating 4 out of 5]

Of the 19 maxims being discussed, I found the maxims on decision making pretty interesting. Overall it is a decent read. But I did feel that there is a reasonable degree of overlap between quite a few maxims.

[Aaron · Rating 4 out of 5]

I had picked up several of these maxims in working with economists over the years and watching them think through issues. If I could consistently use even just half of these, I'm sure my life would be better. There are a few exercises at the end to help you get started internalizing them.

[Ujval Nanavati · Rating 3 out of 5]

Nothing much here for the folks initiated into the ways of mental models and cognitive biases. Besides to breadth, there is a great lack of depth in the discussion as well.

Good enough for beginners.

[Arny Delan · Rating 1 out of 5]

These maxims will not help you thinking analytically. In fact these are closer to heuristics, the antithesis for analytic mind. The author seems to see Richard Zeckhauser as larger than life intellectuals. But seeing these maxims (or heuristic), I don't see the point why. Halo bias?

[Dhruv · Rating 3 out of 5]

It's a good book, but not for me

If you are new to analytical thinking, this book will be extremely valuable. However, working as an engineer for many years, I was already familiar with the gist of most of these ideas from past experience.

[Andrew · Rating 3 out of 5]

A heart-warming collection of reflections from colleagues of Richard Zeckhauser. Clearly Dr. Zeckhauser is a luminary in policy and decision theory. This book read like it could have been privately published / a birthday or retirement tribute.