Daniel Kahneman Quotes

automatic search for causes shapes our thinking,

The only difference between the two groups was that the students conceded that they were influenced by the anchor, while the professionals denied that influence.

The technical definition of heuristic is a simple procedure that helps find adequate, though often imperfect, answers to difficult questions. The word comes from the same root as eureka.

Highly intelligent women tend to marry men who are less intelligent than they are.

In a rising market, enough of your bad ideas will pay off so that you'll never learn that you should have fewer ideas.

Confidence is a feeling, which reflects the coherence of the information and the 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.

Systems 1 and 2 are both active whenever we are awake. System 1 runs automatically and System 2 is normally in a comfortable low-effort mode, in which only a fraction of its capacity is engaged. System 1 continuously generates suggestions for System 2: impressions, intuitions, intentions, and feelings. If endorsed by System 2, impressions and intuitions turn into beliefs, and impulses turn into voluntary actions. When all goes smoothly, which is most of the time, System 2 adopts the suggestions of System 1 with little or no modification. You generally believe your impressions and act on your desires, and that is fine - usually. When System 1 runs into difficulty, it calls on System 2 to support more detailed and specific processing that may solve the problem of the moment. System 2 is mobilized when a question arises for which System 1 does not offer an answer. [S]ystem 2 is activated when an event is detected that violates the model of the world that System 1 maintains.

People tend to assess the relative importance of
issues by the ease with which they are retrieved from memory - and this is
largely determined by the extent of coverage in the media. Frequently
mentioned topics populate the mind even as others slip away from
awareness. In turn, what the media choose to report corresponds to their
view of what is currently on the public's mind. It is no accident that
authoritarian regimes exert substantial pressure on independent media.
Because public interest is most easily aroused by dramatic events and by
celebrities, media feeding frenzies are common

The exaggerated faith in small samples is only one example of a more general 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. Jumping to conclusions is a safer sport in the world of our imagination than it is in reality. Statistics produce many observations that appear to beg for causal explanations but do not lend themselves to such explanations. Many facts of the world are due to chance, including accidents of sampling. Causal explanations of chance events are inevitably wrong.

The children were watched through a one-way mirror, and the film that shows their behavior during the waiting time always has the audience roaring in laughter. About half the children managed the feat of waiting for 15 minutes, mainly by keeping their attention away from the tempting reward. Ten or fifteen years later, a large gap had opened between those who had resisted temptation and those who had not. The resisters had higher measures of executive control in cognitive tasks, and especially the ability to reallocate their attention effectively. As young adults, they were less likely to take drugs. A significant difference in intellectual aptitude emerged: the children who had shown more self-control as four-year-olds had substantially higher scores on tests of intelligence.

System 2 and the electrical circuits in your home both have limited capacity, but they respond differently to threatened overload. A breaker trips when the demand for current is excessive, causing all devices on that circuit to lose power at once. In contrast, the response to mental overload is selective and precise: System 2 protects the most important activity, so it receives the attention it needs; "spare capacity" is allocated second by second to other tasks. In our version of the gorilla experiment, we instructed the participants to assign priority to the digit task. We know that they followed that instruction, because the timing of the visual target had no effect on the main task. If the critical letter was presented at a time of high demand, the subjects simply did not see it. When the transformation task was less demanding, detection performance was better.

The average investor's return is significantly lower than market indices due primarily to market timing.

Most of the time, we think fast. And most of the time we're really expert at what we're doing, and most of the time, what we do is right.

Doubting what you see is a very odd experience. And doubting what you remember is a little less odd than doubting what you see. But it's also a pretty odd experience, because some memories come with a very compelling sense of truth about them, and that happens to be the case even for memories that are not true.

People exaggerate their confidence in their plans - something we call the planning fallacy ... The existence of the plan tends to induce overconfidence.

A recurrent theme of this book is that luck plays a large role in every story of success;

All of us would be better investors if we just made fewer decisions.

That people can maintain an unshakable faith in any proposition, however absurd, when they are sustained by a community of like-minded believers.

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.

Nobody would say, 'I'm voting for this guy because he's got the stronger chin,' but that, in fact, is partly what happens.

I enjoy being active, but I look forward to the day when I can retire to the Internet.

You may note the irony. In the context of the cab problem, the neglect of base-rate information is a cognitive flaw, a failure of Bayesian reasoning, and the reliance on causal base rates is desirable. Stereotyping the Green drivers improves the accuracy of judgment. In other contexts, however, such as hiring or profiling, there is a strong social norm against stereotyping, which is also embedded in the law. This is as it should be. In sensitive social contexts, we do not want to draw possibly erroneous conclusions about the individual from the statistics of the group. We consider it morally desirable for base rates to be treated as statistical facts about the group rather than as presumptive facts about individuals. In other words, we reject causal base rates.

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.

Psychologists really aim to be scientists, white-coat stuff, with elaborate statistics, running experiments.

Freedom has a cost, which is borne by individuals who make bad choices, and by a society that feels obligated to help them.

The characters are useful because of some quirks of our minds, yours and mine. A sentence is understood more easily if it describes what an agent (system 2) does than if it describes what something is, what properties it has.

If people are failing, they look inept. If people are succeeding, they look strong and good and competent. That's the 'halo effect.' Your first impression of a thing sets up your subsequent beliefs. If the company looks inept to you, you may assume everything else they do is inept.

regression inevitably occurs when the correlation between two measures is less than perfect,

Survival prospects are poor for an animal that is not suspicious of novelty.

People who are cognitively busy are also more likely to make selfish choices, use sexist language, and make superficial judgments in social situations.

It is the consistency of the information that matters for a good story, not its completeness.

When you look at the books about well-being, you see one word - it's happiness. People do not distinguish.

There is a deep gap between our thinking about statistics and our thinking about individual cases. Statistical results with a causal interpretation have a stronger effect on our thinking than noncausal information. But even compelling causal statistics will not change long-held beliefs or beliefs rooted in personal experience. On the other hand, surprising individual cases have a powerful impact and are a more effective tool for teaching psychology because the incongruity must be resolved and embedded in a causal story.

policy is ultimately about people, what they want and what is best for them.

for most people, the cause of a mistake matters. The

We are prone to blame decision makers for good decisions that worked out badly and to give them too little credit for successful moves that appear obvious only after the fact.

We don't see very far in the future, we are very focused on one idea at a time, one problem at a time, and all these are incompatible with rationality as economic theory assumes it.

I would not advise people to buy a car or house without making a list. You will probably improve your intuitions by making a list and then sleeping on it.

In an article titled "Consequences of Erudite Vernacular Utilized Irrespective of Necessity: Problems with Using Long Words Needlessly," he showed that couching familiar ideas in pretentious language is taken as a sign of poor intelligence and low credibility.

Errors in the initial budget are not always innocent. The authors of unrealistic plans are often driven by the desire to get the plan approved - whether by their superiors or by a client - supported by the knowledge that projects are rarely abandoned unfinished merely because of overruns in costs or completion times. In

A simple rule can help: before an issue is discussed, all members of the committee should be asked to write a very brief summary of their position. This procedure makes good use of the value of the diversity of knowledge and opinion in the group. The standard practice of open discussion gives too much weight to the opinions of those who speak early and assertively, causing others to line up behind them.

Amos liked the idea of an adjust-and-anchor heuristic as a strategy for estimating uncertain quantities: start from an anchoring number, assess whether it is too high or too low, and gradually adjust your estimate by mentally "moving" from the anchor. The adjustment typically ends prematurely, because people stop when they are no longer certain that they should move farther.

Amos and I introduced the idea of a conjunction fallacy, which people commit when they judge a conjunction of two events (here, bank teller and feminist) to be more probable than one of the events (bank teller) in a direct comparison.

How do people make the judgments and how do they assign decision weights? We start from two simple answers, then qualify them. Here are the oversimplified answers: People overestimate the probabilities of unlikely events. People overweight unlikely events in their decisions.

Many people will admit that they made a mistake [putting money in dot-coms or telecoms at their peak] But that doesn't mean that they've changed their mind about anything in particular. It doesn't mean that they are now able to avoid that mistake.

After a crisis we tell ourselves we understand why it happened and maintain the illusion that the world is understandable. In fact, we should accept the world is incomprehensible much of the time.

Experienced happiness refers to your feelings, to how happy you are as you live your life. In contrast, the satisfaction of the remembering self refers to your feelings when you think about your life.

Employers who violate rules of fairness are punished by reduced productivity, and merchants who follow unfair pricing policies can expect to lose sales.

People's mood is really determined primarily by their genetic make-up and personality, and in the second place by their immediate context, and only in the third and fourth place by worries and concerns and other things like that.

As you consider the next question, please assume that Steve was selected at random from a representative sample:

We associate leadership with decisiveness. That perception of leadership pushes people to make decisions fairly quickly, lest they be seen as dithering and indecisive.

However, optimism is highly valued, socially and in the market; people and firms reward the providers of dangerously misleading information more than they reward truth tellers. One of the lessons of the financial crisis that led to the Great Recession is that there are periods in which competition, among experts and among organizations, creates powerful forces that favor a collective blindness to risk and uncertainty.

People are really happier with friends than they are with their families or their spouse or their child.

The test of learning psychology is whether your understanding of situations you encounter has changed, not whether you have learned a new fact.

We were told that a strong attraction to a patient with a repeated history of failed treatment is a danger sign - like the fins on the parallel lines. It is an illusion - a cognitive illusion - and I (System 2) was taught how to recognize it and advised not to believe it or act on it. The question that is most often asked

When forecasting the outcomes of risky projects, executives too easily fall victim to the planning fallacy. In its grip, they make decisions based on delusional optimism rather than on a rational weighting of gains, losses, and probabilities. They overestimate benefits and underestimate costs. They spin scenarios of success while overlooking the potential for mistakes and miscalculations. As a result, they pursue initiatives that are unlikely to come in on budget or on time or to deliver the expected returns - or even to be completed. In this view, people often (but not always) take on risky projects because they are overly optimistic about the odds they face. I will return to this idea several times in this book - it probably contributes to an explanation of why people litigate, why they start wars, and why they open small businesses.

A stupid decision that works out well becomes a brilliant decision in hindsight.

His observation was astute and correct: occasions on which he praised a performance were likely to be followed by a disappointing performance, and punishments were typically followed by an improvement. But the inference he had drawn about the efficacy of reward and punishment was completely off the mark.

A crucial capability of System 2 is the adoption of "task sets": it can program memory to obey an instruction that overrides habitual responses. Consider the following: Count all occurrences of the letter f in this page. This is not a task you have ever performed before and it will not come naturally to you, but your System 2 can take it on. It will be effortful to set yourself up for this exercise, and effortful to carry it out, though you will surely improve with practice. Psychologists speak of "executive control" to describe the adoption and termination of task sets, and neuroscientists have identified the main regions of the brain that serve the executive function. One of these regions is involved whenever a conflict must be resolved. Another is the prefrontal area of the brain, a region that is substantially more developed in humans than in other primates, and is involved in operations that we associate with intelligence.

But the cadet was probably just lucky on that particular attempt and therefore likely to deteriorate regardless of whether or not he was praised. Similarly, the instructor would shout into a cadet's earphones only when the cadet's performance was unusually bad and therefore likely to improve regardless of what the instructor did. The instructor had attached a causal interpretation to the inevitable fluctuations of a random process.

System 1 continuously generates suggestions for System 2: impressions, intuitions, intentions, and feelings. If endorsed by System 2, impressions and intuitions turn into beliefs, and impulses turn into voluntary actions. When all goes smoothly, which is most of the time, System 2 adopts the suggestions of System 1 with little or no modification.

A divorce is like a symphony with a screeching sound at the end - the fact that it ended badly does not mean it was all bad.

People who know math understand what other mortals understand, but other mortals do not understand them. This asymmetry gives them a presumption of superior ability.

Suppose you like someone very much. Then, by a familiar halo effect, you will also be prone to believe many good things about that person - you will be biased in their favor. Most of us like ourselves very much, and that suffices to explain self-assessments that are biased in a particular direction.

Adaptation seems to be, to a substantial extent, a process of reallocating your attention.

And it is natural for System 1 to generate overconfident judgments, because confidence, as we have seen, is determined by the coherence of the best story you can tell from the evidence at hand. Be warned: your intuitions will deliver predictions that are too extreme and you will be inclined to put far too much faith in them.

A large portion of the weekend effects is explained by differences in the amount of time spent with friends or family between weekends and weekdays.

For the billionaire looking for the extra billion, and indeed for the participant in an experimental economics project looking for the extra dollar, money is a proxy for points on a scale of self-regard and achievement. These rewards and punishments, promises and threats, are all in our heads.

There is a huge wave of interest in happiness among researchers. There is a lot of happiness coaching. Everybody would like to make people happier.

Poignancy (a close cousin of regret) is a counterfactual feeling, which

The general tendency to overestimate the probability 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.

While writing the article that reported these findings, Amos and I discovered that we enjoyed working together.

Hindsight is especially unkind to decision makers who act as agents for others - physicians, financial advisers, third-base coaches, CEOs, social workers, diplomats, politicians. We are prone to blame decision makers for good decisions that worked out badly and to give them too little credit for successful moves that appear obvious only after the fact. There is a clear outcome bias. When

An essential design feature of the associative machine is that it represents only activated ideas. Information that is not retrieved (even unconsciously) from memory might as well not exist.

The "Florida effect" involves two stages of priming. First, the set of words primes thoughts of old age, though the word old is never mentioned; second, these thoughts prime a behavior, walking slowly, which is associated with old age. All this happens without any awareness.

I'm not a great believer in self-help.

The media do not just shape what the public is interested in, but also are shaped by it.

the frame that has traditionally been used in the United States - miles per gallon - provides very poor guidance to the decisions of both individuals and policy makers.

Changing one's mind about human nature is hard work, and changing one's mind for the worse about oneself is even harder. Nisbett

For one thing, it helps us see the logical consistency of Human preferences for what it is - a hopeless mirage

If you care about being thought credible and intelligent, do not use complex language where simpler language will do.

Money does not buy you happiness, but lack of money certainly buys you misery.

And want is difficult at the best of times, and especially difficult when we most need to do it, but we can benefit

The mistake that people make in the focusing illusion involves attention to selected moments and neglect of what happens at other times. The mind is good with stories, but it does not appear to be well designed for the processing of time. During the last ten years we have learned many new facts about happiness. But we have also learned that the word happiness does not have a simple meaning and should not be used as if it does. Sometimes scientific progress leaves us more puzzled than we were before.

One thing we have lost, that we had in the past, is a sense of progress, that things are getting better. There is a sense of volatility, but not of progress.

The observers almost never missed a K that was shown at the beginning or near the end of the Add-1 task but they missed the target almost half the time when mental effort was at its peak, although we had pictures of their wide-open eye staring straight at it.

The illusion that one has understood the past feeds the further illusion that one can predict and control the future. These illusions are comforting. They reduce the anxiety that we would experience if we allowed ourselves to fully acknowledge the uncertainties of existence. 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.

luck plays a large role in every story of success; it is almost always easy to identify a small change in the story that would have turned a remarkable achievement into a mediocre outcome.

Systematic errors are known as biases, and they recur predictably in particular circumstances.

Many decisions are based on beliefs concerning the likelihood of uncertain events such as the outcome of an election, the guilt of a defendant, or the future value of the dollar.

People adjust less (stay closer to the anchor) when their mental resources are depleted, either because their memory is loaded with digits or because they are slightly drunk.

Most successful pundits are selected for being opinionated, because it's interesting, and the penalties for incorrect predictions are negligible. You can make predictions, and a year later people won't remember them.

Conflict between an automatic reaction and an intention to control it is common in our lives.

Risk" does not exist "out there," independent of our minds and culture, waiting to be measured. Human beings have invented the concept of "risk" to help them understand and cope with the dangers and uncertainties of life. Although these dangers are real, there is no such thing as "real risk" or "objective risk.

Mind is a machine for jumping to conclusions

The mind is good with stories, but it does not appear to be well designed for the processing of time.

However, attention can be moved away from an unwanted focus, primarily by focusing intently on another target.

The sunk-cost fallacy keeps people for too long in poor jobs, unhappy marriages, and unpromising research projects.

Learning medicine consists in part of learning the language of medicine. A deeper understanding of judgments and choices also requires a richer vocabulary than is available in everyday language.

Our predilection for causal thinking exposes us to serious mistakes in evaluating the randomness of truly random events.