Thinking, fast and slow - Daniel Kahneman

• Three heuristics: (i) representativeness, (ii) availability of instances or scenarios and (iii) adjustement from an anchor.
• 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.
• 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?
• This is a bad case of duration neglect. You are giving the good and the bad part of your experience equal weight, although the good part lasted ten times as long as the other.
• It is often the case when you broaden the frame, you reach more reasonable decisions.
• He likes the project, so he thinks it's costs are low and its benefits are high. Nice example of the affect heuristic.
• They made that big decision on the basis of a good report from one consultant. WYSIATI-what you see is all there is. They did not seem to realize how little information they had.
• He had an impression, but some of his impressions are illusions.
• This was pure System 1 response. She reacted to the threat before she recognized it.
• This is your System 1 talking. Slow down and let your System 2 take control.
• She is the victim of a planning fallacy. She's assuming a best-case scenario but they are too many different ways for the plan to fail, and she cannot foresee them all.
• We are making an additional investment because we do not want to admit failure. This is an instance of the sunk-cost fallacy.
• They have an illusion of control. They seriously underestimate the obstacles.
• They seem to suffer from an acute case of competitor neglect.
• This is a case of overconfidence. They seem to believe they know more than they actually do know.
• We should conduct a premortem session. Someone may come up with a threat we have neglected.
• Both candidates are willing to accept the salary we're offering., but they won't be equally satisfied because their reference point are different.
• She's suing him for alimony (prestations compensatoires). She would actually like to settle, but he prefers to go to court. That's not surprising-she can only gain, so she's risk averse. He, on the other hand, faces options that are all bad, so he'd rather take the risk.
• He suffers from extreme loss aversion, which makes him turn down very favorable opportunities.
• He weighs losses about twice as much as gains, which is normal.
• The endowment effect:
• She did not care which of the two offices she would get, but a day after the announcement was made, she was no longer willing to trade. Endowment effect!
• He just hates the idea of selling his house for less money than he paid for it. Loss aversion is at work.
• The brain of humans and other animals contain a mechanism that is designed to give priority to bad news.
• Threats are privileged above opportunities.
• We all know that a friendship that may take years to develop can be ruined by a single action.
• Goals are reference points:
• we are driven more strongly to avoid losses than to achieve gains.
• Defending the status quo:
• Animals, including people, fight harder to prevent losses than to achieve gains.
• Potential losers will be more active and determined than potential winners.
• This reform will not pass. Those who stand to lose will fight harder than those who stand to gain.
• Rare events:
• Unlikely events are considerably overweighted.
• System 1 cannot be turned off.
• People overestimate the probabilities of unlikely events.
• People overweight unlikely events in their decisions.
• The unlikely event became focal.
• The more vivid description produces a higher decision weight for the same probability.
• Risk policies:
• The outside view and the risk policy are remedies against two distinct biases that affect many decisions: the exaggerated optimism of the planning fallacy and the exaggerated caution induced by loss aversion.
• An organization that could eliminate both excessive optimism and excessive loss aversion should do so.
• I would like all of them accept their risks.
• Tell her to think like a trader! You win a few, you lose a few.
• I decided to evaluate my portfolio only once a quarter. I am too loss averse to make sensible decisions in the face of daily price fluctuations.
• They never buy extended warranties. That's their risk policy.
• Each of our executives is loss averse in his or her domain. That's perfectly natural, but the result is that the organization is not taking enough risk.
• One recipe for a dissatisfied adulthood is setting goals that are especially difficult to attain.
• A rational decision maker is interested only in the future consequences of current investments.
• The sunk-cost fallacy keeps people for too long in poor jobs, unhappy marriages, and unpromising research projects.
• The precautionary principle is costly, and when interpreted costly it can be paralyzing.
• Rationality is generally served by broader and more comprehensive frames, and joint evaluation is obviously broader than single evaluation.
• A rational person can prefer being hated over being loved, so long as his preferences are consistent. Rationality is logical coherence-reasonable or not.
• It is often the case that when you broaden the frame, you reach more reasonable decisions.
• System 1 is rarely indifferent to emotional words: mortality is bad, survival is good, and 90% survival sounds encouraging whereas 10% mortality is frightening.
• Decisions makers tend to prefer the sure thing over the gamble (they are risk averse).
• This is a bad case of duration neglect. You are giving the good and the bad part of your experience equal weight, although the good part lasted ten times as long as the other.
• 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 ones.
• On their wedding day, the bride and the groom know that the rate of divorce is high and that the incidence of marital disappointment is even higher, but they do not believe that these statistics apply to them.
• A disposition for well-being is as heritable as height or intelligence.
• Attention is key.
• It is only a slight exaggeration to say that happiness is the experience of spending time with people you love and who love you.
• Adaptation to a new situation, whether good or bad, consists in large part of thinking less and less about it.
• In storytelling mode, an episode is represented by a few critical moments, especially the beginning, the peak, and the end. Duration is neglected.
• She thought that buying a fancy car would make her happier, but it turned out to be an error of affective forecasting.
• His car broke down on the way to work this morning and he's in a foul mood. This is not a good day to ask him about his job satisfaction.
• The choices that people made on their own behalf are fairly described as mistakes.
• We believe that duration is important, but our memory tells us it is not.
• The neglect of duration combined with the peak-end rule causes a bias that favors a short period of intense joy over a long period of moderate happiness.
• Individuals identify with their remembering self and care about their story.
• When we observe people acting in ways that seem odd, we should first examine the possibility that they have a good reason to do what they do.
• Humans need help to make good decisions.
• The investment of attention improves performance in numerous activities.
• Observers are less cognitively busy and more open to information than actors.
• Organizations are better than individuals when it comes to avoiding errors, because they naturally think more slowly and have the power to impose orderly procedures.
• An organization is a factory that manufactures judgments and decisions.
• Constant quality control is an alternative to the wholesale reviews of processes that organizations commonly undertake in the wake of disasters.
• The logic behind specific recommendations, including encouraging "clear, simple, salient and meaningful disclosures".
• Presentation greatly matters: if for example, a potential outcome is framed as a loss, it may have more impact than if it is presented as a gain.
• The name of a disease is a hook to which all that is known about the disease is attached, including vulnerabilities, environmental factors, symptoms, prognosis and care. Similarly, labels such as "anchoring effects", "narrow framing", or "excessive coherence" bring together in memory everything we know about a bias, its causes, its effects, and what can be done about it.