Thinking, fast and slow

Thinking, fast and slow #

2021-09-30

Page 29, two systems
Page 32, 2nd paragraph, purple of the eye as a window to the soul
Page 27, bottom, cognitive illusion
Page 34, the invisible gorilla experiment
Page 35, bottom, the law of least effort
Page 40, bottom, concept of flow
Page 41, 2nd paragraph, cognitively busy
Page 46, middle, intelligence is not only the ability to reason; it’s also the ability to find relevant in memory to deploy attention when needed.
Page 49, the distinction between intelligence and rationality.
Page 51, 1st paragraph,associative activation; associatively coherent
Page 52, bottom, the priming effect
Page 53, bottom, the ideomotor effect

2021-10-02

Cognitive ease#

Page 59, cognitive ease and cognitive strain
Page 62-63, how to write a pervasive message

Norms, surprises, and Causes#

Page 71, bottom, Surprise is the most sensitive indication of how we understand our world and what we expect from it. Two main varieties of surprises.
P77, top, humans in born readiness to separate physical and intentional causality and the origins of religion;
P77, bottom, statistical reasoning vs causal intuition of humans

2021-10-04

A machine for jumping to conclusions#

P79, top, “Her favorite position is beside herself, and her favorite sport is jumping to conclusions. ” Danny Kaye
P82, top, halo effect-exaggerated emotional conference
P85, top, using the principle of independent judgement (and decor related errors) in conducting meetings

2021-10-05

How judgements happen#

System 1 can’t deal with sum-like variables effectively; it works well with averages

Answering an easier question#

P97, bottom, the concept of substitution
P98, top, the definition of heuristic

characteristics of system 1#

generates impressions, feelings, and inclinations; when endorsed by System 2 these become beliefs, attitudes, and intentions
operates automatically and quickly, with little or no effort, and no sense of voluntary control
can be programmed by System 2 to mobilize attention when a particular pattern is detected (search)
executes skilled responses and generates skilled intuitions, after adequate training
creates a coherent pattern of activated ideas in associative memory
links a sense of cognitive ease to illusions of truth, pleasant feelings, and reduced vigilance
distinguishes the surprising from the normal
infers and invents causes and intentions
neglects ambiguity and suppresses doubt
is biased to believe and confirm
exaggerates emotional consistency (halo effect)
focuses on existing evidence and ignores absent evidence (WYSIATI)
generates a limited set of basic assessments
represents sets by norms and prototypes, does not integrate
matches intensities across scales (e.g., size to loudness) computes more than intended (mental shotgun)
sometimes substitutes an easier question for a difficult one (heuristics)
is more sensitive to changes than to states (prospect theory)
overweights low probabilities
shows diminishing sensitivity to quantity (psychophysics)
responds more strongly to losses than to gains (loss aversion)
frames decision problems narrowly, in isolation from one another

2021-10-06

The law of small numbers#

P112, middle, for a research psychologist, sampling variation is not a curiosity; it is a nuisance and a costly obstacle, which turns the undertaking of every research project into a gamble.
P115, top, Instead of focusing on how the event at hand came to be, the statistical view relates it to what could have happened instead. Nothing in particular caused it to be what it is - chance selected it from among its alternatives.
P116, bottom, there is no such a thing as hot hand in professional basketball - research showed. It’s related with the tendency to see patterns in randomness.

2021-10-07

Anchors#

P119, bottom, anchoring effect

2021-10-08

The science of availability#

P129, bottom, availability heuristic

2021-10-09

Availability, emotion, and risk#

P139, top, people form opinions and make choices that directly express their feelings and their basic tendency to approach or avoid, often without knowing that they are doing so.
The emotional tail wags the rational dog. Jonathan Haidt
P142, top, the availability cascade

Tom W’s specialty#

Base rate vs detailed description
impact of Representativeness in decision making
P154, bottom, the essential keys to disciplined Bayesian reasoning can be simply summarized:
- Anchor your judgement of the probability of an outcome on a plausible base rate
- Question the diagnosticity of your evidence

2021-10-09

Linda: less is more#

P158, bottom, conjunction fallacy: people commit when they judge a conjunction of two events to be more probable than one of the events in a direct comparison

2021-10-10

Causes trump statistics#

P174, top, subject’s unwillingness to deduce particular to general was matched only by willingness to infer the general from the particular.
P174, bottom, surprising individual cases have a powerful impact and are more effective tool for teaching psychology because the incongruity must be resolved and embedded in causal story.

2021-10-11

Regression to the mean#

P177, top,

success = talent + luck great success = a little more talent + a lot of luck
P181, bottom, regression and correlation are not two concepts; whenever the correlation between two scores is imperfect, there will be regression to the mean

Taming intuitive predictions#

P192, top, intuitive predictions tend to be overconfident and overly extreme.
Extreme predictions and willingness to predict rare events from rare evidence are both manifestations of System 1.

2021-10-13

The illusion of understanding#

P199, top, narrative fallacy
P202, middle, once you adopt a new view of the world (out of any part of it), you immediately lose much of your ability to recall what you used to believe before your mind changed.
P203, bottom, outcome bias

2021-10-16

The illusion of validity#

P211, bottom, the illusion of validity
P212, middle, Subjective confidence in a juagment is not a reasoned evaluation of the probability that this judgment is correct. Confidence is a feeling, which reflects the coherence of the information and cognitive ease of processing it. It is wise to take admissions of uncertainty seriously, but declarations of high confidence mainly tell you that an individual has constructed a coherent story in his mind, not necessarily that the story is true.
A Random Walk Down Wall Street by Burton Malkiel
P218, 2nd paragraph, march of history
P220, top, hedgehog vs fox analogy

2021-10-19

Intuitions Vs formulas#

Paul Meehl, clinical vs statistical prediction:a theoretical analysis and a review of the evidence
P225, top, inconsistency in personal evaluation is typical, which may be the main reason that leads to bad performance in human prediction
P225, middle, inconsistency is destructive of any predictive ability

Expert intuition: when to trust it?#

Malcolm Gladwell: Blink
P236, bottom, recognition-primed decision
P237, top, Herbert Simon’s definition of intuition: 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.
P240, top, confidence that people have in their intuition is not a reliable guide to their validity
P240, 2nd paragraph, two basic conditions for acquiring a skill:
- an environment that is sufficiently regular to be predictable
- an opportunity to learn these regularities through prolonged practice
P241, middle, intuition can’t be trusted in the absence of stable regularities in the environment.
P241, bottom, whether professionals have a chance to develop intuitive expertise depends essentially on the quality and speed of feedback,as well as on sufficient opportunity to practice.

2021-10-22

The outside view#

P249, 2nd paragraph, people who have information about an individual case rarely feel the need to know the statistics of the class to which the case belongs.
P250, top, planning fallacy, plans and forecasts that
- are unrealistically close to best-case scenarios
- could be improved by consulting the statistics of similar cases
P251, bottom, reference class forecasting (the treatment for the planning fallacy)
P251, bottom, practices to overcome best-rate neglect:
- Identify an appropriate reference class (kitchen renovations, large railway projects, etc.)
- Obtain the statistics of the reference class (in terms of cost per mile of railway, or of the percentage by which expenditures exceeded budget), Use the statistics to generate a baseline prediction.
- Use specific information about the case to adjust the baseline prediction, if there are particular reasons to expect the optimistic bias to be more or less pronounced in this project than in others of the same type.

The engine of capitalism#

P259, bottom, cognitive biases play an important role, notably the System 1 feature WYSIATI.
- We focus on our goal, anchor on our plan, and neglect relevant base rates, exposing ourselves to the planning fallacy
- We focus on what we want to do and can do, neglecting the plans and skills of others
- Both in explaining the past and in predicting the future, we focus on the. causal role of skill and neglect the role of luck. We are therefore prone to an illusion of control.
- We focus on what we know and neglect what we don’t know, which makes us overly confident in our beliefs.
P262, bottom, “one-arm economist” who will take a clear stand and won’t keep saying “On the other hand…” in his/her reasoning
P264, bottom, Gary Klein’s proposal of premortem. When the organization has almost come to an important decision but has not formally committed itself, 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.”

2021-10-25

Bernoulli’s errors#

P270, middle, expected utility theory, which was the foundation of the rational-agent model (to this day the most important theory in the social sciences.)
P272, top, prospect theory; developed as a modified expected utility theory just enough to explain authors’ collection of observation.
P273, bottom,
- Bernoulli invented psychophysics to explain the aversion to risk: people’s choices are based not on dollar values but on the psychological values of outcomes, their utilities.
- The psychological value of a gamble is therefore not the weighted average of its possible dollar outcomes; it is the average of the utilities of these outcomes, each weighted by its probability
P277, top, 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 (refers to Bernoulli’s error)

Prospect theory#

P281, bottom, Bernoulli’s model is too simple and lacks a moving part. The missing variable is the reference point, the earlier state relative to which gains and losses are evaluated.
P282, top, operating characteristics of System 1
- Evaluation is the relative to a neutral reference point, which is sometimes referred to as an “adaptation level”.
- A principle of diminishing sensitivity applies to both sensory dimensions and the evaluation of changes of wealth.
- The third principle is loss aversion. When directly compared or weighted against each other, losses loom larger than gains.
P284, top, the “loss aversion ration”
P287, bottom, prospect theory cannot deal with disappointment.
P287, bottom, prospect theory and utility theory also fail to allow for regret.

2021-10-27

The endowment effect#

P289, Fig. 11, indifference curves
P292, top, two aspects of choice that the standard model of indifference curves does not predict.
- First, tastes are not fixed; they vary with the reference point
- Second, the disadvantages of a change loom larger than its advantages, inducing a bias that favors the status quo.

Bad events#

P301, middle, the brains of humans and other animals contain a mechanism that is designed to give priority to bad news. By shaving a few hundredths of a second from the time needed to detect a predator, this circuit improves the animal’s odds of living long enough to reproduce.

2021-10-29

The fourfold pattern#

P311, bottom, possibility effect and certainty effect
P312, 3rd paragraph, The conclusion is straightforward: the decision weights that people assign to outcomes are not identical to the probabilities of these outcomes, contrary to the expectation principle.
P312, bottom, Allais’s paradox
P317, top, fourfold pattern of preference (figure 13)

Rare events#

P324, top, Although overestimation and overweighting are distinct phenomena, the same psychological mechanisms are involved in both: focused attention, confirmation bias, and cognitive ease
P325, top, The probability of a rare event is most likely to be overestimated when the alternative is not fully specified.
P328, top, a rich and vivid representation of the outcome, whether or not it is emotional, reduces the role of probability in the evaluation of an uncertain prospect.
P329, top, denominator neglect. people pay little attention to the denominator (total) but just to the changes in numerator (absolute number of chances)

2021-10-31

Risk policies#

P336, top, there are two ways of constructing decisions i and ii:
- narrow framing: a sequence of two simple decisions, considered separately
- broad framing: a single comprehensive decision, with four options
P339, middle, In the narrow-framing condition, they were told to “make each decision as if it were the only one” and to accept their emotions. The instructions for broad framing of a decision included the phrases “imagine yourself as a trader”, “you do this all the time”, and “treat it as one of many monetary decision, which will sum together to produce a ‘portfolio’”.
P339, bottom, broad framing blunted the emotional reaction to looses and increased the willingness to take risks.
P339, bottom, The combination of loss aversion and narrow framing is a costly curse. Individual investors can avoid that curse, achieving the emotional benefits of broad framing while also saving time and agony, by reducing the frequency with which they check how well their investments are doing.
P340, bottom, 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.

Keeping score#

P344, 4th paragraph, the disposition effect is an instance of narrow framing
P345, top, The decision to invest additional resources in a losing account, when better investments are available, is known as the sunk-cost fallacy.
P348, top, 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.
P351, bottom, The dilemma between intensely loss-averse moral attitudes, and efficient risk management does not have a simple and compelling solution
P352, bottom, Daniel Gilbert and his colleagues provocatively claim that people generally anticipate more regret than they will actually experience, because they underestimate the efficacy of the psychological defenses they will deploy– with they label the “psychological immune system”. Their recommendation is that you should not put too much weight on regret; even if you have some, it will hurt less than you now think.

Reversals#

P360, top, evaluability hypothesis: the number of entries is given no weight in single evaluation, because the numbers are not “evaluable” on their own.