Quotes from Daniel Kahneman

When uncertain, System 1 bets on an answer, and the bets are guided by experience. The rules of the betting are intelligent: recent events and the current context have the most weight in determining an interpretation. When no recent event comes to mind, more distant memories govern.

Matters of judgment, including professional judgments, occupy a space between questions of fact or computation on the one hand and matters of taste or opinion on the other. They are defined by the expectation of bounded disagreement.

The sophisticated allocation of attention has been honed by a long evolutionary history. Orienting and responding quickly to the gravest threats or most promising opportunities improved the chance of survival

Mutual funds are run by highly experienced and hardworking professionals who buy and sell stocks to achieve the best possible results for their clients. Nevertheless, the evidence from more than fifty years of research is conclusive: for a large majority of fund managers, the selection of stocks is more like rolling dice than like playing poker. Typically at least two out of every three mutual funds underperform the overall market in any given year.

extreme outcomes (both high and low) are more likely to be found in small than in large samples. This explanation is not causal.

The sunk-cost fallacy keeps people for too long in poor jobs, unhappy marriages, and unpromising research projects. I have often observed young scientists struggling to salvage a doomed project when they would be better advised to drop it and start a new one. Fortunately, research suggests that at least in some contexts the fallacy can be overcome. The

An unbiased appreciation of uncertainty is a cornerstone of rationality

The best wines are produced when the summer is warm and dry, which makes the Bordeaux wine industry a likely beneficiary of global warming.

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

Any aspect of life to which attention is directed will loom large in a global evaluation. This is the essence of the focusing illusion, which can be described in a single sentence: Nothing in life is as important as you think it is when you are thinking about it.

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. This

When the question is difficult and a skilled solution is not available, intuition still has a shot: an answer may come to mind quickly—but it is not an answer to the original question.

risk-averse decision maker will choose a sure thing that is less than expected value, in effect paying a premium to avoid the uncertainty.

The core of the illusion is that we believe we understand the past, which implies that the future also should be knowable, but in fact we understand the past less than we believe we do. Know is not the only word that fosters this illusion. In common usage, the words intuition and premonition also are reserved for past thoughts that turned out to be true.

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.

To the untrained eye," Feller remarks, "randomness appears as regularity or tendency to cluster.

But your subjective experience consists largely of the story that your System 2 tells itself about what is going on. Priming phenomena arise in System 1, and you have no conscious access to them.

costs are not losses.

Organisms that treat threats as more urgent than opportunities have a better chance to survive and reproduce.

When no recent event comes to mind, more distant memories govern.

For example, if you believe that 3% of graduate students are enrolled in computer science (the base rate), and you also believe that the description of Tom W is 4 times more likely for a graduate student in that field than in other fields, then Bayes's rule says you must believe that the probability that Tom W is a computer scientist is now 11%. If the base rate had been 80%, the new degree of belief would be 94.1%.

and this capability is certainly not restricted to humans. Even in modern humans, System 1 takes over in emergencies and assigns total priority to self-protective actions. Imagine yourself at the wheel of a car that unexpectedly skids on a large oil slick. You will find that you have responded to the threat before you became fully conscious of it.

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.

They instructed negotiators to focus their attention and search their memory for arguments against the anchor.