MIT Sloan School of Management News Briefs — July 2005

Shane Frederick:
MIT Sloan professor develops new intelligence test

Shane FrederickRemember that adage about trusting your first instinct? Forget it, says MIT Sloan Professor Shane Frederick, who has developed a simple, three-item test that measures people's ability to resist their first instinct.

“Do you want someone running your company who doesn't think beyond their first impulse,” asks Frederick, “or do you want someone who is willing to ask herself, 'Does this response really make any sense?'” He says that the cognitive reflection test serves as a rough measure of that ability or disposition.

Take, for example, one of his three questions — and answer it before reading on.

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

Frederick posed this question to more than 3,000 students at eight different universities. Fewer than half gave the correct answer (5 cents). What did the rest say? You guessed it — 10 cents. That's the answer most people think of first, and which only some of them recognize as wrong. Although Frederick admits thinking “10 cents” when he first saw the problem, he was still stunned by how many people actually stayed with that as their “final answer.”

“A moment's reflection is sufficient to reveal the error of this initial, thoughtless response,” says Frederick. “If a person bothered to check their answer, they'd recognize that the difference between $1 and 10 cents is only 90 cents, not one dollar as the problem stipulates. Everyone can recognize this. But not everyone does.”

Frederick found that those who do well on the cognitive reflection test tend to be more patient in decisions between smaller sooner rewards and larger later rewards. They are also more willing to gamble in financial domains.

According to Frederick, this three-item test predicts such characteristics as well as and sometimes better than much longer cognitive tests, such as the SAT, ACT, or the Wonderlic Personnel Test (which is the “IQ” test used by many employers, including the National Football League). While not claiming that his test is a perfect substitute for such established intelligence tests, Frederick says it comes close and is much easier to use, adding that the availability of such convenient short tests may spur further research on the relationship between cognitive ability and decision making.

“Decision making is a cognitive activity, yet few study how cognitive ability affects it,” Frederick says. “We now have a test that takes a minute to complete and is as predictive as other tests that take more than three hours.”

Related Link:
Shane Frederick Bio