The Art of Thinking Clearly

by Rolf Dobelli

If we could learn to recognize and evade the biggest errors in thinking—in our private lives, at work, or in government—we might experience a leap in prosperity. We need no extra cunning, no new ideas, no unnecessary gadgets, no frantic hyperactivity—all we need is less irrationality.

In daily life, because triumph is made more visible than failure, you systematically overestimate your chances of succeeding.

Social proof, sometimes roughly termed the “herd instinct,” dictates that individuals feel they are behaving correctly when they act the same as other people.

“If fifty million people say something foolish, it is still foolish.”

The sunk cost fallacy is most dangerous when we have invested a lot of time, money, energy, or love in something. This investment becomes a reason to carry on, even if we are dealing with a lost cause. The more we invest, the greater the sunk costs are, and the greater the urge to continue becomes.

This irrational behavior is driven by a need for consistency. After all, consistency signifies credibility. We find contradictions abominable. If we decide to cancel a project halfway through, we create a contradiction: We admit that we once thought differently. Carrying on with a meaningless project delays this painful realization and keeps up appearances.

Rational decision making requires you to forget about the costs incurred to date. No matter how much you have already invested, only your assessment of the future costs and benefits counts.

The confirmation bias is the mother of all misconceptions. It is the tendency to interpret new information so that it becomes compatible with our existing theories, beliefs, and convictions.

Whenever you are about to make a decision, think about which authority figures might be exerting an influence on your reasoning. And when you encounter one in the flesh, do your best to challenge him or her.

The availability bias says this: We create a picture of the world using the examples that most easily come to mind. This is idiotic, of course, because in reality, things don’t happen more frequently just because we can conceive of them more easily.

The most effective way of encouraging customers to purchase your product is to tell them how much money they are losing without insulation—as opposed to how much money they would save with it, even though the amount is exactly the same.

“Glossing” is a popular type of framing. Under its rules, a tumbling share price becomes a “correction.” An overpaid acquisition price is branded “goodwill.” In every management course, a problem magically transforms into an “opportunity” or a “challenge.” A person who is fired is “reassessing his career.” A fallen soldier—regardless of how much bad luck or stupidity led to his death—turns into a “war hero.” Genocide translates to “ethnic cleansing.”

In new or shaky circumstances, we feel compelled to do something, anything. Afterward we feel better, even if we have made things worse by acting too quickly or too often. So, though it might not merit a parade in your honor, if a situation is unclear, hold back until you can assess your options.

“All of humanity’s problems stem from man’s inability to sit quietly in a room alone,”

If someone uses the word “average,” think twice. Try to work out the underlying distribution. If a single anomaly has almost no influence on the set, the concept is still worthwhile. However, when extreme cases dominate (such as the Bill Gates phenomenon), we should discount the term “average.” We should all take stock from novelist William Gibson: “The future is already here—it’s just not very evenly distributed.”

If you suddenly introduce a bonus system—let’s say a small salary increase for every donation secured—motivation crowding will commence. Your team will begin to snub tasks that bring no extra reward. Creativity, company reputation, knowledge transfer—none of this will matter anymore. Soon, all efforts will zoom in on attracting donations.

Financial incentives and performance bonuses work well in industries with generally uninspiring jobs—industries where employees aren’t proud of the products or the companies and do the work simply because they get a paycheck.

“The greatest obstacle to discovery is not ignorance—it is the illusion of knowledge.” And next time you are confronted by a rival, consider killing him—not with kindness but with reams of data and analysis.

Now that you know about effort justification, you can rate your projects more objectively. Try it out: Whenever you have invested a lot of time and effort into something, stand back and examine the result—only the result. The novel you’ve been tinkering with for five years and that no publisher wants: Perhaps it’s not Nobel-worthy after all. The MBA you felt compelled to do: Would you really recommend it? And the woman you’ve been chasing for years: Is she really better than bachelorette number two who would say yes right away?

Raise expectations for yourself and for the people you love. This increases motivation. At the same time, lower expectations for things you cannot control—for example, the stock market. As paradoxical as it sounds: The best way to shield yourself from nasty surprises is to anticipate them.

They also come at a price, but the price tag is often hidden and intangible: Each decision costs mental energy and eats up precious time for thinking and living.

We are obsessed with having as many irons as possible in the fire, ruling nothing out, and being open to everything. However, this can easily destroy success. We must learn to close doors.

Adopt a life strategy similar to a corporate strategy: Write down what not to pursue in your life. In other words, make calculated decisions to disregard certain possibilities and when an option shows up, test it against your not-to-pursue list. It will not only keep you from trouble but also save you lots of thinking time.

Most doors are not worth entering, even when the handle seems to turn so effortlessly.

In other words, your brain quickly forgets where the information came from (e.g., from the Department of Propaganda). Meanwhile, the message itself (i.e., war is necessary and noble) fades only slowly or even endures. Therefore, any knowledge that stems from an untrustworthy source gains credibility over time.