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Most of us are healthy most of the time,
In what sense?
The specific heuristics that Amos and I studied provide little help in understanding how the executive came to invest in Ford stock, but a broader conception of heuristics now exists, which offers a good account. An important advance is that emotion now looms much larger in our understanding of intuitive judgments and choices than it did in the past. The executive’s decision would today be described as an example of the affect heuristic, where judgments and decisions are guided directly by feelings of liking and disliking, with little deliberation or reasoning.
This is the essence of intuitive heuristics: when faced with a difficult question, we often answer an easier
Several psychological studies have shown that people who are simultaneously challenged by a demanding cognitive task and by a temptation are more likely to yield to the temptation.
The conclusion is straightforward: self-control requires attention and effort. Another way of saying this is that controlling thoughts and behaviors is one of the tasks that System 2 performs.
some people are more like their System 2; others are closer to their System 1.
ideomotor effect.
Terminology
Cognitive strain, whatever its source, mobilizes System 2, which is more likely to reject the intuitive answer suggested by System 1.
In fact, all the headlines do is satisfy our need for coherence: a large event is supposed to have consequences, and consequences need causes to explain them.
The tendency to like (or dislike) everything about a person—including things you have not observed—is known as the halo effect.
Definition
The initial traits in the list change the very meaning of the traits that appear later. The stubbornness of an intelligent person is seen as likely to be justified and may actually evoke respect, but intelligence in an envious and stubborn person makes him more dangerous.
System 1 has been shaped by evolution to provide a continuous assessment of the main problems that an organism must solve to survive:
The psychologist Paul Slovic has proposed an affect heuristic in which people let their likes and dislikes determine their beliefs about the world.
Unless you are a professional, however, you may not react very differently to a sample of 150 and to a sample of 3,000. That is the meaning of the statement that “people are not adequately sensitive to sample size.”
A point to be noted in cases such as poll predictions
The simple answer to these questions is that if you follow your intuition, you will more often than not err by misclassifying a random event as systematic. We are far too willing to reject the belief that much of what we see in life is random.
illusion—we pay more attention to the content of messages than to information about their reliability, and as a result end up with a view of the world around us that is simpler and more coherent than the data justify.
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.
Often walked away from autowalahs
Aravind liked this
Maintaining one’s vigilance against biases is a chore—but the chance to avoid a costly mistake is sometimes worth the effort.
The proof that you truly understand a pattern of behavior is that you know how to reverse it.
The lesson is clear: estimates of causes of death are warped by media coverage.
Differences between experts and the public are explained in part by biases in lay judgments, but Slovic draws attention to situations in which the differences reflect a genuine conflict of values. He points out that 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,” or between random accidental fatalities and deaths that occur in the course of voluntary activities such as skiing. These legitimate distinctions are often ignored in statistics that merely count cases. Slovic argues
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This stark version of the problem made Linda famous in some circles, and it earned us years of controversy. About 85% to 90% of undergraduates at several major universities chose the second option, contrary to logic.
can you beleive it!
Nisbett and Borgida asked two groups of students to watch the videos and predict the behavior of the two individuals. The students in the first group were told only about the procedure of the helping experiment, not about its results. Their predictions reflected their views of human nature and their understanding of the situation. As you might expect, they predicted that both individuals would immediately rush to the victim’s aid. The second group of students knew both the procedure of the experiment and its results. The comparison of the predictions of the two groups provides an answer to a
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Extremely interesting experiment
There is a deep gap between our thinking about statistics and our thinking about individual cases.
Exactly. This is applicable everywhere when we don't think data - we overestimate/underestimate a lot of things.
When our attention is called to an event, associative memory will look for its cause—more precisely, activation will automatically spread to any cause that is already stored in memory.
Taleb suggests that we humans constantly fool ourselves by constructing flimsy accounts of the past and believing they are true.
The halo effect discussed earlier contributes to coherence, because it inclines us to match our view of all the qualities of a person to our judgment of one attribute that is particularly
The human mind does not deal well with nonevents.
Wondered often about it
Once you adopt a new view of the world (or of any part of it), you immediately lose much of your ability to recall what you used to believe before your mind changed.
Leaders who have been lucky are never punished for having taken too much risk. Instead, they are believed to have had the flair and foresight to anticipate success, and the sensible people who doubted them are seen in hindsight as mediocre, timid, and weak.
We all have a need for the reassuring message that actions have appropriate consequences, and that success will reward wisdom and courage. Many business books are tailor-made to satisfy this need.
The persistence of individual differences is the measure by which we confirm the existence of skill among golfers, car salespeople, orthodontists, or speedy toll collectors on the turnpike.
Many of the themes of previous chapters come up again in the explanation of the prevalence and persistence of an illusion of skill in the financial world.
Given the professional culture of the financial community, it is not surprising that large numbers of individuals in that world believe themselves to be among the chosen few who can do what they believe others cannot.
Television and radio stations and newspapers have their panels of experts whose job it is to comment on the recent past and foretell the future. Viewers and readers have the impression that they are receiving information that is somehow privileged, or at least extremely insightful. And there is no doubt that the pundits and their promoters genuinely believe they are offering such information.
The research suggests a surprising conclusion: to maximize predictive accuracy, final decisions should be left to formulas,
Go for machine learning
Pavlov’s famous conditioning experiments, in which the dogs learned to recognize the sound of the bell as a signal that food was coming. What Pavlov’s dogs learned can be described as a learned hope. Learned fears are even more easily acquired.
The argument for the outside view should be made on general grounds: if the reference class is properly chosen, the outside view will give an indication of where the ballpark is, and it may suggest, as it did in our case, that the inside-view forecasts are not even close to it.
generally, the financial benefits of self-employment are mediocre: given the same qualifications, people achieve higher average returns by selling their skills to employers than by setting out on their own.
Klein proposes gathering for a brief session a group of individuals who are knowledgeable about the decision. The premise of the session is a short speech: “Imagine that we are a year into the future. We implemented the plan as it now exists. The outcome was a disaster. Please take 5 to 10 minutes to write a brief history of that disaster.”
His idea was straightforward: people’s choices are based not on dollar values but on the psychological values of outcomes, their utilities.
Petersburg paradox,”
Interesting one to read about
You just like winning and dislike losing—and you almost certainly dislike losing more than you like winning.
the disadvantages of a change loom larger than its advantages, inducing a bias that favors the status quo.
Detailed thought required
The brains of humans and other animals contain a mechanism that is designed to give priority to bad news.
Think TV news channels
We all know that a friendship that may take years to develop can be ruined by a single action.
One of many such examples
The idea of loss aversion, which surprises no one except perhaps some economists, generated a precise and nonintuitive hypothesis and led researchers to a finding that surprised everyone—including professional golfers.
“This reform will not pass. Those who stand to lose will fight harder than those who stand to gain.”
Probabilities that are extremely low or high (below 1% or above 99%) are a special case. It is difficult to assign a unique decision weight to very rare events, because they are sometimes ignored altogether, effectively assigned a decision weight of zero.
