Thinking, Fast and Slow

by Daniel Kahneman

Any number that you are asked to consider as a possible solution to an estimation problem will induce an anchoring effect.

Two different mechanisms produce anchoring effects—one for each system. There is a form of anchoring that occurs in a deliberate process of adjustment, an operation of System 2. And there is anchoring that occurs by a priming effect, an automatic manifestation of System 1.

people who are instructed to shake their head when they hear the anchor, as if they rejected it, move farther from the anchor, and people who nod their head show enhanced anchoring.

My hunch was that anchoring is a case of suggestion.

suggestion is a priming effect, which selectively evokes compatible evidence.

System 1 understands sentences by trying to make them true, and the selective activation of compatible thoughts produces a family of systematic errors that make us gullible and prone to believe too strongly whatever we believe.

Suggestion and anchoring are both explained by the same automatic operation of System 1.

Anchoring can be measured, and it is an impressively large effect.

The anchoring effect is not a laboratory curiosity; it can be just as strong in the real world.

the anchoring effect was 41%. Indeed, the professionals were almost as susceptible to anchoring effects as business school students with no real-estate experience, whose anchoring index was 48%.

The only difference between the two groups was that the students conceded that they were influenced by the anchor, while the professionals denied that influence.

a key finding of anchoring research is that anchors that are obviously random can be just as effective as potentially informative anchors.

The conclusion is clear: anchors do not have their effects because people believe they are informative.

The psychological mechanisms that produce anchoring make us far more suggestible than most of us would want to be. And of course there are quite a few people who are willing and able to exploit our gullibility.

My advice to students when I taught negotiations was that if you think the other side has made an outrageous proposal, you should not come back with an equally outrageous counteroffer, creating a gap that will be difficult to bridge in further negotiations. Instead you should make a scene, storm out or threaten to do so, and make it clear—to yourself as well as to the other side—that you will not continue the negotiation with that number on the table.

In general, a strategy of deliberately “thinking the opposite” may be a good defense against anchoring effects, because it negates the biased recruitment of thoughts that produces these effects.

Anchoring effects are threatening in a similar way. You are always aware of the anchor and even pay attention to it, but you do not know how it guides and constrains your thinking, because you cannot imagine how you would have thought if the anchor had been different (or absent).

the availability heuristic.

The answer was straightforward: instances of the class will be retrieved from memory, and if retrieval is easy and fluent, the category will be judged to be large.

The availability heuristic, like other heuristics of judgment, substitutes one question for another:

Resisting this large collection of potential availability biases is possible, but tiresome.

One of the best-known studies of availability suggests that awareness of your own biases can contribute to peace in marriages, and probably in other joint projects.

In any event, it is a good thing for every individual to remember. You will occasionally do more than your share, but it is useful to know that you are likely to have that feeling even when each member of the team feels the same way.

The contest yielded a clear-cut winner: people who had just listed twelve instances rated themselves as less assertive than people who had listed only six. Furthermore, participants who had been asked to list twelve cases in which they had not behaved assertively ended up thinking of themselves as quite assertive!

The experience of fluent retrieval of instances trumped the number retrieved.

less confident in a choice when they are asked to produce more arguments to support it

The proof that you truly understand a pattern of behavior is that you know how to reverse it.

Schwarz and his colleagues reasoned that they could disrupt the heuristic by providing the subjects with an explanation for the fluency of retrieval that they experienced.

Other cover stories have been used with the same result: judgments are no longer influenced by ease of retrieval when the experience of fluency is given a spurious explanation by the presence of curved or straight text boxes, by the background color of the screen, or by other irrelevant factors that the experimenters dreamed up.

Among the basic features of System 1 is its ability to set expectations and to be surprised when these expectations are violated.

Furthermore, System 2 can reset the expectations of System 1 on the fly, so that an event that would normally be surprising is now almost normal.

The conclusion is that the ease with which instances come to mind is a System 1 heuristic, which is replaced by a focus on content when System 2 is more engaged.

if they are knowledgeable novices on the topic of the task, in contrast to true experts

Merely reminding people of a time when they had power increases their apparent trust in their own intuition.

The lesson is clear: estimates of causes of death are warped by media coverage. The coverage is itself biased toward novelty and poignancy.

The world in our heads is not a precise replica of reality; our expectations about the frequency of events are distorted by the prevalence and emotional intensity of the messages to which we are exposed.

Slovic eventually developed the notion of an affect heuristic, in which people make judgments and decisions by consulting their emotions: Do I like it? Do I hate it? How strongly do I feel about it?

Antonio Damasio, who had proposed that people’s emotional evaluations of outcomes, and the bodily states and the approach and avoidance tendencies associated with them, all play a central role in guiding decision making. Damasio and his colleagues have observed that people who do not display the appropriate emotions before they decide, sometimes because of brain damage, also have an impaired ability to make good decisions.

When people were favorably disposed toward a technology, they rated it as offering large benefits and imposing little risk; when they disliked a technology, they could think only of its disadvantages, and few advantages came to mind.

Consistent affect is a central element of what I have called associative coherence.

The striking finding was that people who had received a message extolling the benefits of a technology also changed their beliefs about its risks. Although they had received no relevant evidence, the technology they now liked more than before was also perceived as less risky.

Jonathan Haidt said in another context, “The emotional tail wags the rational dog.”

In the real world, of course, we often face painful tradeoffs between benefits and costs.

Experts show many of the same biases as the rest of us in attenuated form, but often their judgments and preferences about risks diverge from those of other people.

experts often measure risks by the number of lives (or life-years) lost, while the public draws finer distinctions, for example between “good deaths” and “bad deaths,”

Slovic argues from such observations that the public has a richer conception of risks than the experts do.

“Risk” does not exist “out there,” independent of our minds and culture, waiting to be measured. Human beings have invented the concept of “risk” to help them understand and cope with the dangers and uncertainties of life. Although these dangers are real, there is no such thing as “real risk” or “objective risk.”

the evaluation of the risk depends on the choice of a measure—with the obvious possibility that the choice may have been guided by a preference for one outcome or another.

Every policy question involves assumptions about human nature, in particular about the choices that people may make and the consequences of their choices for themselves and for society.

the existing system of regulation in the United States displays a very poor setting of priorities, which reflects reaction to public pressures more than careful objective analysis.