Quotes from Daniel Kahneman

social influences create significant noise across groups.

The example also shows that it is costly to be risk averse for gains and risk seeking for losses. These attitudes make you willing to pay a premium to obtain a sure gain rather than face a gamble, and also willing to pay a premium (in expected value) to avoid a sure loss.

Because of the coincidence of two planes crashing last month, she now prefers to take the train. That's silly. The risk hasn't really changed; it is an availability bias.

If you wish to experience your System 2 working at full tilt, the following exercise will do; it should bring you to the limits of your cognitive abilities within 5 seconds. To start, make up several strings of 4 digits, all different, and write each string on an index card.

System 1 operates automatically and quickly, with little or no effort and no sense of voluntary control. System 2 allocates attention to the effortful mental activities that demand it, including complex computations. The operations of System 2 are often associated with the subjective experience of agency, choice, and concentration.

individuals feel relieved of responsibility when they know that others have heard the same request for help.

But our memory, a function of System 1, has evolved to represent the most intense moment of an episode of pain or pleasure (the peak) and the feelings when the episode was at its end.

Recognize the signs that you are in a cognitive minefield, slow down, and ask for reinforcement of system 2.

your beliefs should be constrained by the logic of probability.

Money-primed people become more independent than they would be without the associative trigger. They persevered almost twice as long in trying to solve a very difficult problem before they asked the experimenter for help, a crisp demonstration of increased self-reliance. Money-primed people are also more selfish: they were much less willing to spend time helping another student who pretended to be confused about an experimental task.

I quoted Herbert Simon's definition of intuition in the introduction, but it will make more sense when I repeat it now: "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.

How many murders occur in the state of Michigan in one year? The question, which was also devised by Shane Frederick, is again a challenge to System 2. The "trick" is whether the respondent will remember that Detroit, a high-crime city, is in Michigan.

You have now been introduced to that stranger in you, which may be in control of much of what you do, although you rarely have a glimpse of it.

Asked whether they would rather eat an organic or a commercially grown apple, most people prefer the "all natural" one. Even after being informed that the two apples taste the same, have identical nutritional value, and are equally healthful, a majority still prefer the organic fruit. Even the producers of beer have found that they can increase sales by putting "All Natural" or "No Preservatives" on the label.

El mundo que imaginamos no es una réplica precisa de la realidad; nuestras expectativas sobre la frecuencia de los acontecimientos están distorsionadas por la prevalencia y la intensidad emocional de los mensajes que nos llegan.

people tend to be risk averse in the domain of gains and risk seeking in the domain of losses.

The primed ideas have some ability to prime other ideas, although more weakly. Like ripples on a pond, activation spreads through a small part of the vast network of associated ideas.

All too often a company afflicted by sunk costs drives into the blizzard, throwing good money after bad rather than accepting the humiliation of closing the account of a costly failure.

What you learned about the Müller-Lyer illusion did not change the way you see the lines, but it changed your behavior. You now know that you cannot trust your impression of the length of lines that have fins appended to them, and you also know that in the standard Müller-Lyer display you cannot trust what you see. When asked about the length of the lines, you will report your informed belief, not the illusion that you continue to see.

The availability heuristic, like other heuristics of judgment, substitutes one question for another: you wish to estimate the size of a category or the frequency of an event, but you report an impression of the ease with which instances come to mind. Substitution of questions inevitably produces systematic errors.

Some judgments are biased; they are systematically off target. Other judgments are noisy, as people who are expected to agree end up at very different points around the target. Many organizations, unfortunately, are afflicted by both bias and noise.

you dispose of a limited budget of attention that you can allocate to activities, and if you try to go beyond your budget, you will fail.

An impressive series of studies by Thomas Åstebro sheds light on what happens when optimists receive bad news.

Our understanding of cognitive ease and associative coherence locates subjective confidence firmly in System 1.