Thinking, Fast and Slow

Daniel Kahneman

I started reading a Czech translation but then switched to the English version. My Goodreads review: Clever, courageous and it strongly supports my convinction that we are just a bit better than apes. I systematické chyby či biasy haló efekt: tendence hodnotit člověka podle prvního dojmu Amor Tversky intuitivní statistika je mnohem snazší usilovat o dokonalost, když se nikdy nenudíte teorii o roli podobnosti v předvídání moje: stereotypní vlastnosti aktivují víc knihovníka (popis člověka na jehož základě se má odhadnout jeho profese) je mnohem snadnější najít slovo, které začíná určitým písmenem, než přijí tna slovo, které má toto písmeno na třetím místě uvažujte písmeno K objeví se K ve slovech s větší pravděpodobností jako první písmeno, nebo jako třetí písmeno?

I started reading a Czech translation but then switched to the English version.

My Goodreads review:

Clever, courageous and it strongly supports my convinction that we are just a bit better than apes.



II Heuristiky a zkreslení

availability effects help explain the pattern of insurance purchase and protective action after disasters. (Saturday, April 13, 2013, 08:08 AM, page 2334-35)

protective actions, whether by individuals or governments, are usually designed to be adequate to the worst disaster actually experienced. (Saturday, April 13, 2013, 08:09 AM, page 2339-40)

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. (Saturday, April 13, 2013, 08:17 AM, page 2370-71)

Jonathan Haidt said in another context, “The emotional tail wags the rational dog.” (Saturday, April 13, 2013, 08:21 AM, page 2379-80)

in the social context, “all heuristics are equal, but availability is more equal than the others.” (Saturday, April 13, 2013, 08:31 AM, page 2419-20)

a basic limitation in the ability of our mind to deal with small risks: we either ignore them altogether or give them far too much weight—nothing in between. (Saturday, April 13, 2013, 08:56 AM, page 2451-52)

base rates matter, even in the presence of evidence about the case at hand. (Saturday, April 13, 2013, 09:35 AM, page 2638-39)

Anchor your judgment of the probability of an outcome on a plausible base rate. Question the diagnosticity of your evidence. (Saturday, April 13, 2013, 09:36 AM, page 2642-43)

teaching psychology is mostly a waste of time. (Saturday, April 13, 2013, 10:01 PM, page 2931)

The experiment shows that individuals feel relieved of responsibility when they know that others have heard the same request for help. (Saturday, April 13, 2013, 10:04 PM, page 2944-45)

Subjects’ unwillingness to deduce the particular from the general was matched only by their willingness to infer the general from the particular. (Saturday, April 13, 2013, 10:13 PM, page 2994-95)

There is a deep gap between our thinking about statistics and our thinking about individual cases. (Saturday, April 13, 2013, 10:14 PM, page 2998-99)

rewards for improved performance work better than punishment of mistakes. (Sunday, April 14, 2013, 06:38 AM, page 3010-11)

the feedback to which life exposes us is perverse. Because we tend to be nice to other people when they please us and nasty when they do not, we are statistically punished for being nice and rewarded for being nasty. (Sunday, April 14, 2013, 06:43 AM, page 3035-36)

success = talent + luck great success = a little more talent + a lot of luck (Sunday, April 14, 2013, 06:43 AM, page 3039-40)

The fact that you observe regression when you predict an early event from a later event should help convince you that regression does not have a causal explanation. (Sunday, April 14, 2013, 06:50 AM, page 3069-70)

Regression to the mean was discovered and named late in the nineteenth century by Sir Francis Galton, a half cousin of Charles Darwin and a renowned polymath. (Sunday, April 14, 2013, 07:02 AM, page 3087-88)

Piano-playing success depends only on weekly hours of practice. (Sunday, April 14, 2013, 07:09 AM, page 3105-6)

whenever the correlation between two scores is imperfect, there will be regression to the mean. (Sunday, April 14, 2013, 07:14 AM, page 3129-30)

our mind is strongly biased toward causal explanations and does not deal well with “mere statistics.” (Sunday, April 14, 2013, 07:18 AM, page 3144-45)

Max Bazerman’s excellent text Judgment in Managerial Decision Making: (Sunday, April 14, 2013, 02:41 PM, page 3170)

We shouldn’t be surprised that the very best candidates often fail to meet our expectations.” (Sunday, April 14, 2013, 02:43 PM, page 3204)

Gary Klein has described in Sources of Power (Sunday, April 14, 2013, 02:52 PM, page 3213)

the prediction of the future is not distinguished from an evaluation of current evidence—prediction matches evaluation. (Sunday, April 14, 2013, 03:04 PM, page 3268-69)

Taleb suggests that we humans constantly fool ourselves by constructing flimsy accounts of the past and believing they are true. (Monday, April 15, 2013, 11:55 AM, page 3406-7)

The human mind does not deal well with nonevents. (Monday, April 15, 2013, 11:59 AM, page 3422)

Paradoxically, it is easier to construct a coherent story when you know little, when there are fewer pieces to fit into the puzzle. Our comforting conviction that the world makes sense rests on a secure foundation: our almost unlimited ability to ignore our ignorance. (Monday, April 15, 2013, 12:03 PM, page 3434-35)

A general limitation of the human mind is its imperfect ability to reconstruct past states of knowledge, or beliefs that have changed. (Monday, April 15, 2013, 12:15 PM, page 3454-55)

Your inability to reconstruct past beliefs will inevitably cause you to underestimate the extent to which you were surprised by past events. Baruch Fischh off first demonstrated this “I-knew-it-all-along” effect, or hindsight bias, (Monday, April 15, 2013, 12:17 PM, page 3462-63)

Leaders who have been lucky are never punished for having taken too much risk. (Monday, April 15, 2013, 04:42 PM, page 3499-3500)

The sense-making machinery of System 1 makes us see the world as more tidy, simple, predictable, and coherent than it really is. (Monday, April 15, 2013, 05:38 PM, page 3503-4)

The illusion that one has understood the past feeds the further illusion that one can predict and control the future. (Monday, April 15, 2013, 05:39 PM, page 3504)

people are often reluctant to infer the particular from the general. (Monday, April 15, 2013, 06:05 PM, page 3629-30)

Confidence is a feeling, which reflects the coherence of the information and the cognitive ease of processing it. (Monday, April 15, 2013, 06:06 PM, page 3631-32)

Burton Malkiel’s wonderful book A Random Walk Down Wall Street. (Monday, April 15, 2013, 06:10 PM, page 3646)

on average, the most active traders had the poorest results, while the investors who traded the least earned the highest returns. (Monday, April 15, 2013, 06:15 PM, page 3663-64)

The illusion of skill is not only an individual aberration; it is deeply ingrained in the culture of the industry. (Tuesday, April 16, 2013, 06:52 AM, page 3705-6)

We know that people can maintain an unshakable faith in any proposition, however absurd, when they are sustained by a community of like-minded believers. (Tuesday, April 16, 2013, 06:58 AM, page 3732-33)

humans are incorrigibly inconsistent in making summary judgments of complex information. (Thursday, April 18, 2013, 08:02 AM, page 3854-55)

Experienced radiologists who evaluate chest X-rays as “normal” or “abnormal” contradict themselves 20% of the time when they see the same picture on separate occasions. (Thursday, April 18, 2013, 08:04 AM, page 3856-57)

The widespread inconsistency is probably due to the extreme context dependency of System 1. We know from studies of priming that unnoticed stimuli in our environment have a substantial influence on our thoughts and actions. (Thursday, April 18, 2013, 08:05 AM, page 3861-62)

Robyn Dawes’s famous article “The Robust Beauty of Improper Linear Models in Decision Making.” (Thursday, April 18, 2013, 08:08 AM, page 3876-77)

formulas that assign equal weights to all the predictors are often superior, because they are not affected by accidents of sampling. (Thursday, April 18, 2013, 08:10 AM, page 3883-84)

In a memorable example, Dawes showed that marital stability is well predicted by a formula: frequency of lovemaking minus frequency of quarrels You don’t want your result to be a negative number. (Thursday, April 18, 2013, 06:01 PM, page 3886-88)

“The situation has provided a cue; this cue has given the expert access to information stored in memory, and the information provides the answer. Intuition is nothing more and nothing less than recognition.” (Thursday, April 18, 2013, 09:51 PM, page 4072-74)

Studies of chess masters have shown that at least 10,000 hours of dedicated practice (about 6 years of playing chess 5 hours a day) are required to attain the highest levels of performance. (Thursday, April 18, 2013, 09:56 PM, page 4097-99)

We are confident when the story we tell ourselves comes easily to mind, with no contradiction and no competing scenario. But ease and coherence do not guarantee that a belief held with confidence is true. (Friday, April 19, 2013, 06:33 AM, page 4121-22)

the confidence that people have in their intuitions is not a reliable guide to their validity. In other words, do not trust anyone—including yourself—to tell you how much you should trust their judgment. (Friday, April 19, 2013, 06:35 AM, page 4125-26)

Remember this rule: intuition cannot be trusted in the absence of stable regularities in the environment. (Friday, April 19, 2013, 06:41 AM, page 4152-53)

expert in the Middle East knows many things but not the future. (Friday, April 19, 2013, 02:36 PM, page 4178)

System 1 is often able to produce quick answers to difficult questions by substitution, creating coherence where there is none. (Friday, April 19, 2013, 03:02 PM, page 4191)

the proper way to elicit information from a group is not by starting with a public discussion but by confidentially collecting each person’s judgment. (Saturday, April 20, 2013, 06:43 AM, page 4227-28)

This is a common pattern: people who have information about an individual case rarely feel the need to know the statistics of the class to which the case belongs. (Saturday, April 20, 2013, 06:58 AM, page 4295-96)

you should be both happy and wary if you are temperamentally optimistic. (Monday, April 22, 2013, 06:59 AM, page 4398)

Optimists are normally cheerful and happy, and therefore popular; (Monday, April 22, 2013, 07:01 AM, page 4403)

a hypothesis: the people who have the greatest influence on the lives of others are likely to be optimistic and overconfident, and to take more risks than they realize. (Monday, April 22, 2013, 07:04 AM, page 4413-14)

One of the benefits of an optimistic temperament is that it encourages persistence in the face of obstacles. But persistence can be costly. (Monday, April 22, 2013, 01:24 PM, page 4429-30)

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. (Monday, April 22, 2013, 01:26 PM, page 4440-41)

“90% of drivers believe they are better than average” (Monday, April 22, 2013, 02:15 PM, page 4478-79)

President Truman famously asked for a “one-armed economist” who would take a clear stand; he was sick and tired of economists who kept saying, “On the other hand…” (Monday, April 22, 2013, 02:24 PM, page 4529-30)

An unbiased appreciation of uncertainty is a cornerstone of rationality—but (Monday, April 22, 2013, 03:13 PM, page 4545)

Can overconfident optimism be overcome by training? I am not optimistic. (Monday, April 22, 2013, 03:17 PM, page 4561-62)

Bernoulli’s essay (Wednesday, April 24, 2013, 06:33 AM, page 4685)

The poorer man will happily pay a premium to transfer the risk to the richer one, which is what insurance is about. (Wednesday, April 24, 2013, 06:35 AM, page 4689-90)

I call it theory-induced blindness: once you have accepted a theory and used it as a tool in your thinking, it is extraordinarily difficult to notice its flaws. If you come upon an observation that does not seem to fit the model, you assume that there must be a perfectly good explanation that you are somehow missing. You give the theory the benefit of the doubt, trusting the community of experts who have accepted it. (Wednesday, April 24, 2013, 06:44 AM, page 4735-38)

As the psychologist Daniel Gilbert observed, disbelieving is hard work, and System 2 is easily tired. (Wednesday, April 24, 2013, 06:45 AM, page 4741)

You know you have made a theoretical advance when you can no longer reconstruct why you failed for so long to see the obvious. (Wednesday, April 24, 2013, 06:51 AM, page 4765-66)

The high price that Sellers set reflects the reluctance to give up an object that they already own, a reluctance that can be seen in babies who hold on fiercely to a toy and show great agitation when it is taken away. Loss aversion is built into the automatic evaluations of System 1. (Thursday, April 25, 2013, 10:26 AM, page 5072-74)

Brain recordings also indicate that buying at especially low prices is a pleasurable event. (Thursday, April 25, 2013, 10:28 AM, page 5078-79)

The fundamental ideas of prospect theory are that reference points exist, and that losses loom larger than corresponding gains. (Thursday, April 25, 2013, 10:31 AM, page 5091-92)

The experimental economist John List, who has studied trading at baseball card conventions, found that novice traders were reluctant to part with the cards they owned, but that this reluctance eventually disappeared with trading experience. (Thursday, April 25, 2013, 10:35 AM, page 5101-2)

biological and psychological view in which negativity and escape dominate positivity and approach. (Thursday, April 25, 2013, 10:46 AM, page 5140-41)

amygdala, which has a primary role as the “threat center” (Thursday, April 25, 2013, 11:04 AM, page 5151-52)

Some experimenters have reported that an angry face “pops out” of a crowd of happy faces, but a single happy face does not stand out in an angry crowd. (Thursday, April 25, 2013, 11:05 AM, page 5156-57)

The psychologist Paul Rozin, an expert on disgust, observed that a single cockroach will completely wreck the appeal of a bowl of cherries, but a cherry will do nothing at all for a bowl of cockroaches. (Thursday, April 25, 2013, 11:12 AM, page 5168-69)

They cite John Gottman, the well-known expert in marital relations, who observed that the long-term success of a relationship depends far more on avoiding the negative than on seeking the positive. (Thursday, April 25, 2013, 11:17 AM, page 5173-74)

Loss aversion is a powerful conservative force that favors minimal changes from the status quo in the lives of both institutions and individuals. This conservatism helps keep us stable in our neighborhood, our marriage, and our job; it is the gravitational force that holds our life together near the reference point. (Thursday, April 25, 2013, 01:57 PM, page 5234-36)

However, our brains are not designed to reward generosity as reliably as they punish meanness. (Friday, April 26, 2013, 06:40 AM, page 5294)

On the other hand, when you do not ignore the very rare events, you will certainly overweight them. Most of us spend very little time worrying about nuclear meltdowns or fantasizing about large inheritances from unknown relatives. (Sunday, April 28, 2013, 08:19 AM, page 5419-20)

people attach values to gains and losses rather than to wealth, and the decision weights that they assign to outcomes are different from probabilities. (Monday, April 29, 2013, 05:02 PM, page 5437-38)

A lottery ticket is the ultimate example of the possibility effect. Without a ticket you cannot win, with a ticket you have a chance, and whether the chance is tiny or merely small matters little. (Monday, April 29, 2013, 05:06 PM, page 5453-54)

People are willing to pay much more for insurance than expected value—which is how insurance companies cover their costs and make their profits. (Tuesday, April 30, 2013, 07:44 AM, page 5456-57)

systematic deviations from expected value are costly in the long run—and this rule applies to both risk aversion and risk seeking. Consistent overweighting of improbable outcomes—a feature of intuitive decision making—eventually leads to inferior outcomes. (Tuesday, April 30, 2013, 07:47 PM, page 5514-15)

As predicted by denominator neglect, low-probability events are much more heavily weighted when described in terms of relative frequencies (how many) than when stated in more abstract terms of “chances,” “risk,” or “probability” (how likely). (Thursday, May 02, 2013, 10:00 AM, page 5662-63)

When it comes to rare probabilities, our mind is not designed to get things quite right. For the residents of a planet that may be exposed to events no one has yet experienced, this is not good news. (Thursday, May 02, 2013, 10:35 AM, page 5737-38)

people tend to be risk averse in the domain of gains and risk seeking in the domain of losses. (Thursday, May 02, 2013, 10:42 AM, page 5757)

The sunk-cost fallacy keeps people for too long in poor jobs, unhappy marriages, and unpromising research projects. (Thursday, May 02, 2013, 12:11 PM, page 5953)

unusual events are easier than normal events to undo in imagination. (Thursday, May 02, 2013, 12:14 PM, page 5966-67)

people expect to have stronger emotional reactions (including regret) to an outcome that is produced by action than to the same outcome when it is produced by inaction. (Thursday, May 02, 2013, 12:17 PM, page 5991-92)

you should not put too much weight on regret; even if you have some, it will hurt less than you now think. (Thursday, May 02, 2013, 04:08 PM, page 6069-70)

This is a preference reversal: people choose B over A, but if they imagine owning only one of them, they set a higher value on A than on B. (Friday, May 03, 2013, 06:40 AM, page 6116-17)

Theoretical beliefs are robust, and it takes much more than one embarrassing finding for established theories to be seriously questioned. (Friday, May 03, 2013, 04:18 PM, page 6142-43)

The fact that logically equivalent statements evoke different reactions makes it impossible for Humans to be as reliably rational as Econs. (Friday, May 03, 2013, 06:13 PM, page 6268-69)

Should the child exemption be larger for the rich than for the poor? (Tuesday, May 07, 2013, 08:48 PM, page 6376)

If in the first version you want the poor to receive the same (or greater) benefit as the rich for having children, then you must want the poor to pay at least the same penalty as the rich for being childless. (Tuesday, May 07, 2013, 08:49 PM, page 6386-87)

We can recognize System 1 at work. It delivers an immediate response to any question about rich and poor: when in doubt, favor the poor. The surprising aspect of Schelling’s problem is that this apparently simple moral rule does not work reliably. (Tuesday, May 07, 2013, 08:50 PM, page 6387-89)

Our preferences are about framed problems, and our moral intuitions are about descriptions, not about substance. (Tuesday, May 07, 2013, 08:53 PM, page 6398)

sunk costs should be ignored. (Tuesday, May 07, 2013, 08:56 PM, page 6414-15)

Tastes and decisions are shaped by memories, and the memories can be wrong. (Wednesday, May 08, 2013, 06:02 PM, page 6617-18)

Caring for people often takes the form of concern for the quality of their stories, not for their feelings. (Wednesday, May 08, 2013, 06:09 PM, page 6646-47)

In intuitive evaluation of entire lives as well as brief episodes, peaks and ends matter but duration does not. (Thursday, May 09, 2013, 06:42 AM, page 6670-71)

Odd as it may seem, I am my remembering self, and the experiencing self, who does my living, is like a stranger to me. (Thursday, May 09, 2013, 06:48 AM, page 6707-8)

the second best predictor of the feelings of a day is whether a person did or did not have contacts with friends or relatives. It is only a slight exaggeration to say that happiness is the experience of spending time with people you love and who love you. (Friday, May 10, 2013, 05:36 AM, page 6801-3)

Surprisingly, however, religion provides no reduction of feelings of depression or worry. (Friday, May 10, 2013, 09:59 PM, page 6815-16)

being poor makes one miserable, and that being rich may enhance one’s life satisfaction, but does not (on average) improve experienced well-being. Severe (Friday, May 10, 2013, 10:00 PM, page 6818-19)

“The easiest way to increase happiness is to control your use of time. Can you find more time to do the things you enjoy doing?” “Beyond the satiation level of income, you can buy more pleasurable experiences, but you will lose some of your ability to enjoy the less expensive (Friday, May 10, 2013, 10:04 PM, page 6837-40)

Experienced well-being is on average unaffected by marriage, not because marriage makes no difference to happiness but because it changes some aspects of life for the better and others for the worse. (Friday, May 10, 2013, 10:14 PM, page 6886-87)

Nothing in life is as important as you think it is when you are thinking about it. (Saturday, May 11, 2013, 06:40 PM, page 6922-23)

it appears that the remembering self is subject to a massive focusing illusion about the life that the experiencing self endures quite comfortably. (Saturday, May 11, 2013, 07:01 PM, page 6990-91)

The remembering self’s neglect of duration, its exaggerated emphasis on peaks and ends, and its susceptibility to hindsight combine to yield distorted reflections of our actual experience. (Saturday, May 11, 2013, 07:19 PM, page 7049-51)

It is a good bet that many of the things we say we will always remember will be long forgotten ten years later. (Saturday, May 11, 2013, 07:23 PM, page 7058-59)

When engaged in searching for an answer to one question, it simultaneously generates the answers to related questions, and it may substitute a response that more easily comes to mind for the one that was requested. In this conception of heu Septtedristics, the heuristic answer is not necessarily simpler or more frugal than the original question—it is only more accessible, computed more quickly and easily. The heuristic answers are not random, and they are often approximately correct. And sometimes they are quite wrong. (Sunday, May 12, 2013, 03:52 PM, page 7185-88)

cognitive illusions are generally more difficult to recognize than perceptual illusions. (Sunday, May 12, 2013, 03:54 PM, page 7205)

Availability is a useful clue for assessing frequency or probability, because instances of large classes are usually recalled better and faster than instances of less frequent classes. (Monday, May 13, 2013, 06:11 PM, page 7404-5)

If the frequency of words is judged by the availability of the contexts in which they appear, abstract words will be judged as relatively more numerous than concrete words. (Monday, May 13, 2013, 06:16 PM, page 7427-29)

Lifelong experience has taught us that, in general, instances of large classes are recalled better and faster than instances of less frequent classes; that likely occurrences are easier to imagine than unlikely ones; and that the associative connections between events are strengthened when the events frequently co-occur. (Tuesday, May 14, 2013, 02:46 PM, page 7465-67)

The general tendency to overestimate the pr [timrall obability of conjunctive events leads to unwarranted optimism in the evaluation of the likelihood that a plan will succeed or that a project will be completed on time. (Tuesday, May 14, 2013, 02:55 PM, page 7510-11)

Studies of language comprehension indicate that people quickly recode much of what they hear into an abstract representation that no longer distinguishes whether the idea was expressed in an active or in a passive form and no longer discriminates what was actually said from what was implied, presupposed, or implicated (Clark and Clark 1977). (Thursday, May 16, 2013, 04:45 AM, page 7881-83)

observation that the standard deviation of the prices that different stores in a city quote for the same product is roughly proportional to the average price of that product (Thursday, May 16, 2013, 05:05 AM, page 7916-17)

In general, loss aversion favors stability over change. (Thursday, May 16, 2013, 05:30 AM, page 7971)

An objective improvement can be experienced as a loss, for example, when an employee receives a smaller raise than everyone else in the office. (Thursday, May 16, 2013, 05:20 PM, page 8016-17)

von Neumann, J., and O. Morgenstern. 1947. Theory of Games and Economic Behavior, 2nd ed. Princeton: Princeton University Press. (Thursday, May 16, 2013, 05:24 PM, page 8072-73)

April 13, 2013 |