Thinking, Fast and Slow

by Daniel Kahneman

selfish fear of regret more than by a wish to optimize the child’s safety.

The dilemma between intensely loss-averse moral attitudes and efficient risk management does not have a simple and compelling solution.

Susceptibility to regret, like susceptibility to fainting spells, is a fact of life to which one must adjust.

Perhaps the most useful is to be explicit about the anticipation of regret.

If you can remember when things go badly that you considered the possibility of regret carefully before deciding, you are likely to experience less of it.

You should also know that regret and hindsight bias will come together, so anything you can do to preclude hi...

Daniel Gilbert and his colleagues provocatively claim that people generally anticipate more regret than they will actually experience, because they underestimate the efficacy of the psychological defenses they will deploy—which

disposition effect.”

evaluability hypothesis: The number of entries is given no weight in single evaluation,

the number of entries is far more important than the condition of the cover.

Texas were asked to assess punitive damages in several civil cases.

As we have seen, rationality is generally served by broader and more comprehensive frames, and joint evaluation is obviously broader than single evaluation.

We would expect that any institution that wishes to elicit thoughtful judgments would seek to provide the judges with a broad context for the assessments of individual cases. I

The fines are sensible in the context of other penalties set by each agency, but they appear odd when compared to each other. As in the other examples in this chapter, you can see the absurdity only when the two cases are viewed together in a broad frame. The system of administrative penalties is coherent within agencies but incoherent globally.

“It is often the case that when you broaden the frame, you reach more reasonable decisions.”

reality-bound individual

Unless there is an obvious reason to do otherwise, most of us passively accept decision problems as they are framed and therefore rarely have an opportunity to discover the extent to which our preferences are frame-bound rather than reality-bound.

and A' are identical; so are the consequences of programs B and B'. In the second frame, however, a large majority of people

same rule applies when the outcomes are measured in lives saved or lost. In this context, as well, the framing experiment reveals that risk-averse and risk-seeking preferences are not reality-bound. Preferences

Your moral feelings are attached to frames, to descriptions of reality rather than to reality itself.

The message about the nature of framing is stark: framing should not be viewed as an intervention that masks or distorts an underlying preference.

mental accounting and the sunk-cost fallacy.

The different frames evoke different mental accounts, and the significance of the loss depends on the account to which it is posted.

The version in which cash was lost leads to more reasonable decisions. It is a better frame because the loss, even if tickets were lost, is “sunk,” and sunk costs should be ignored. History is irrelevant and the only issue that matters is the set of options the theater patron has now,

“Would you have bought tickets if you had lost the equivalent amount of cash? If yes,

go ahead and buy new ones.” Broader frames and inclusive accounts generally lead to more rational decisions.

frame is wrong,

The high-donation countries have an opt out form, where individuals who wish not to donate must check an appropriate box.

the designation of the default option that will be adopted without having to check a box. Unlike other framing effects that have been traced to features of System 1, the organ donation effect is best explained by the laziness of System

As we have seen again and again, an important choice is controlled by an utterly inconsequential feature of the situation.

but in decision theory the only basis for judging that a decision is wrong is inconsistency with other preferences.

reported at the worst moment of the experience and at its end.

Memories are all we get to keep from our experience of living, and the only perspective that we can adopt as we think about our lives is therefore that of the remembering self.

Confusing experience with the memory of it is a compelling cognitive illusion—and

The preferences we observed in this experiment are another example of the less-is-more effect that we have encountered on previous occasions. One was Christopher Hsee’s study in which adding dishes to a set of 24 dishes lowered the total value because some of the added dishes were broken.

System 1 represents sets by averages, norms, and prototypes, not by sums.

integrates pain over time;

representative moment, strongly influenced by the peak and the end.

Here again, only intensity matters. Up to a point, increasing the duration of a burst of stimulation does not appear to increase the eagerness of the animal to obtain it.

the discrepancy between the decision and the experience originated from diminishing sensitivity: the difference between 18 and 20 is less impressive, and appears to be worth less, than the difference between 6 and 4 injections.

duration neglect and the peak-end rule. The

Tastes and decisions are shaped by memories, and the memories can be wrong. The

A memory that neglects duration will not serve our preference for long pleasure and short pains.

A story is about significant events and memorable moments, not about time passing.

Caring for people often takes the form of concern for the quality of their stories, not for their feelings.

Most important, of course, we all care intensely for the narrative of our own life and very much want it to be a good story, with a decent hero.

enjoying her work, taking vacations, spending time with her friends and on her hobbies.

Another version added 5 extra years to Jen’s life, who now died either when she was 35 or 65. The extra years were described as pleasant but less so than before. After reading a schematic biography of Jen, each participant answered two questions:

storing memories is often an important goal, which shapes both the plans for the vacation and the experience of it.

Pictures may be useful to the remembering self—though we rarely look at them for very long, or as often as we expected, or even at all—but picture taking is not necessarily the best way for the tourist’s experiencing self to enjoy a view.