In a recent post, I discussed the distinction between “noise” and “bias” as noted in the new book, Noise: A Flaw in Human Judgment (Hachette Book Group, New York 2021) by Daniel Kahneman, Olivier Sibony, and Cass R. Sunstein. Although somewhat intense reading, I managed to finish it and realized that the main takeaway is… “Wherever there is judgment, there is noise, and more of it than you think.” (Id. at 255) (“Noise”)
But not just plain ole noise. On the contrary, the authors identify several types of noise. First and foremost, there is “system noise “which is “… unwanted variability in judgments that ideally should be identical, can create rampant injustice, high economic costs, and errors of many kinds.” (Id. at 21.) An example is the varied sentences handed down by U.S. District Court judges across the country (that is, “the system”) for the same crime based on the identical factual scenario. In 1974, fifty federal trial judges from various districts were given hypothetical case summaries and asked to set the fictitious defendants’ sentences. (Id. at 15.) The conclusion was that there was no consensus: the sentences were like the scatter of buckshot. (Id. at 15-16.)
Below “system noise” is “level noise” which is the “variability in the average level of judgments by different judges.” (Id. at 78.) Here, one is essentially putting the judges into groups; some judges are very lenient in sentencing while other judges are very severe in their sentencing. Thus, if one takes all of the “hanging judges” as a group- at this level- will their sentences based on an identical case be the same or different? To the extent their sentences are different- there is “’noise’ at this level.
If one looks at each particular judge- one may notice a “pattern” in her sentencing. Or “pattern noise” which is a judge’s response to particular cases. (Id. at 78.) For example, even if a judge has the reputation of being very strict, she may have the habit of providing a lenient sentence to defendants who are white-collar criminals or are merely accomplices after the fact. (Id. at 76.) Or, although usually lenient, the judge may impose a very harsh sentence where the victim was a senior citizen. (Id.) Where the judge breaks her own “pattern” of being either lenient or harsh or somewhere in between as a general rule, it creates “noise” or “variability” where there should not be.
Finally, there is that “’noise’ caused by external circumstances; the judge is in a bad mood, her favorite sports team lost over the weekend, she is hungry, she is not feeling well, it is hot and humid et cetera. This is “occasion” noise or variability in our judgments for reasons having nothing to do with the subject matter at hand. If we decide X on a Wednesday, chances are that a week later we will make a different decision – Y- based on the same facts because of these external circumstances. Or, as the author notes, we never sign our name the same way. “Occasion ‘noise’” is the reason why! It is the variability within us! (Id. at 77-93.)
So- how do we get rid of all of this noise? First and foremost is to be aware of it. Another way is what the authors call the Mediating Assessment Protocol, which is to, essentially, break a decision into its component parts, analyze each part independently and separately from each other. When looking at each part, we should be looking at other similar or comparable parts as a baseline. We should then reach a conclusion for each part before going on to the next. Only after analyzing each part completely, do we put the component parts together and analyze them as a whole. And only then, is intuition allowed to be part of the process. In essence, we use a rubric. (Id. at 312-324.)
Thus, if one is trying to determine whether to go to trial or settle, one should first look at liability as a separate and discrete issue, analyze it fully by considering similar cases and arrive at a conclusion as to liability. Only then should one turn to the issue of damages, again analyzing it fully by looking at similar jury verdicts or other decisions on damages and arrive at a conclusion.
Only after fully forming a conclusion about liability and about damages, should one then analyze the matter as a whole- looking at both liability and judgment together and only now adding intuition into the mix.
Using this type of rubric, the authors suggest that a lot of “noise” will be tuned out!
…. Just something to think about.
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