The practical implications of all this are profound. People who make decisions for a living are coming to realize that in complex or chaotic situations -- a battlefield, a trading floor, or today's brutally competitive business environment -- intuition usually beats rational analysis. And as science looks closer, it is coming to see that intuition is not a gift but a skill. And, like any skill, it's something you can learn.

To make sense of this, you first have to get over the fact that it contradicts everything you've been taught about making decisions. B-school encourages students to frame problems, formulate alternatives, collect data, and then evaluate the options. Almost every organization that trains decision-makers has followed the same approach. Paul Van Riper, a retired Marine Corps lieutenant general, was taught that way, and he drilled this method into his students when he ran the Marines' leadership and combat development program in the '90s.

But Van Riper noticed that in the swirl and confusion of war simulations -- let alone actual combat -- rational decisions always seemed to come up short. "We used the classical checklist system," he says. "But it never seemed to work. Then we'd criticize ourselves for not using the system well enough. But it still never seemed to work, because it's the wrong system." Frustrated, Van Riper sought out cognitive psychologist Gary Klein. At the time, Klein was studying firefighters, who operate under conditions quite like war. To his consternation, Klein learned that firefighters don't weigh alternatives: They simply grab the first idea that seems good enough, then the next, and the next after that. To them it doesn't even feel like "deciding."

Inspired by Klein, Van Riper brought a group of Marines to the New York Mercantile Exchange in 1995, because the jostling, confusing pits reminded him of war rooms during combat. First the Marines tried their hand at trading on simulators, and to no one's surprise, the professionals on the floor wiped them out. A month or so later, the traders went to the Corps's base in Quantico, Va., where they played war games against the Marines on a mock battlefield. The traders trounced them again -- and this time everyone was surprised.

When the Marines analyzed the humbling results, they concluded that the traders were simply better gut thinkers. Thoroughly practiced at quickly evaluating risks, they were far more willing to act decisively on the kind of imperfect and contradictory information that is all you ever get in war. The lesson wasn't lost on the Marines, who concluded that the old rational analysis model was useless in some situations. Today the Corps's official doctrine reads, "The intuitive approach is more appropriate for the vast majority of ... decisions made in the fluid, rapidly changing conditions of war when time and uncertainty are critical factors, and creativity is a desirable trait." Conditions, in other words, not unlike those in which many business decisions are made today.

The notion that people always act rationally and in their own interest is a pillar of economic theory. So it's interesting that a group of economists, led by the University of Chicago's Richard Thaler, should contribute some of the most damning evidence of people's proclivity for irrational decisions. Building on work by Princeton psychologists Daniel Kahneman and Amos Tversky, these so-called behavioral economists have shown not only that many of our economic decisions are irrational, but also that our waywardness is predictable. We get more satisfaction from avoiding a $100 loss than from making a $100 gain, for example, and we compulsively find patterns where none exist. (This stock has gone up for three days; therefore it will continue to go up.) Go ahead, point it out to us. It doesn't matter; we'll make the same mistakes over and over again.