Another interesting fact from Malcolm Gladwell:

There's a famous experiment done by a wonderful psychologist at Columbia University named Dan Goldstein. He goes to a class of American college students and asks them which city they think is bigger -- San Antonio or San Diego. The students are divided.

Then he goes to an equivalent class of German college students and asks the same question. This time the class votes overwhelmingly for San Diego. The right answer? San Diego.

So the Germans are smarter, at least on this question, than the American kids. But that's not because they know more about American geography. It's because they know less. They've never heard of San Antonio. But they've heard of San Diego and using only that rule of thumb, they figure San Diego must be bigger.

The American students know way more. They know all about San Antonio. They know it's in Texas and that Texas is booming. They know it has a pro basketball team, so it must be a pretty big market. Some of them may have been in San Antonio and taken forever to drive from one side of town to another -- and that, and a thousand other stray facts about Texas and San Antonio, have the effect of muddling their judgment and preventing them from getting the right answer.

The point is that knowledge and the ability to make a good decision correlate only sporadically, and there are plenty of times when knowledge gets in the way of judgment.