Friday, March 17, 2006

Do You Have "Cognitive Reflection?"

Roger Lowenstein discusses this paper in the April edition of SmartMoney Magazine. I haven't read the paper yet, but I think it makes the case for the ability to discern or test for certain cognitive traits in people, including ones that might make someone a good money manager. The test seeks to determine whether you can avoid relying on intuition.

As an interesting aside and since we just posted on Harvey Mansfield, it might be worth noting that women have done markedly worse on this test than men, perhaps suggesting that they indeed rely more on intuition than men.

Anyway, these are the kinds of questions that can supposedly determine if one has "cognitive reflection":

1) A bat and a ball costs $1.10 in total. The bat costs $1 more than the ball. How much does the ball cost?

2) If it takes five machines five minutes to make five widgets, how long would it take 100 machines to make 100 widgets?

3) In a lake, there is a patch of lily pads. Every day, the patch doubles in size. If it takes 48 days for the patch to cover the entire lake, how many days would it take for the patch to cover half the lake?

(The correct answers are in a comment attached to this post, for those who don't want to read the paper.)


Blogger Jacob Golbitz said...

Correct answers:

1. $.05
2. five minutes
3. 47 days

1:09 PM  
Blogger Mike Daley said...

You're alive and well!
Hopefully you'll soon have the time to return to posting here.
Thus, removing all the pressure John now feels.

11:11 PM  

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