Quotes from Daniel Kahneman

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

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

we quickly realized that we were just as risk seeking in the domain of losses as we were risk averse in the domain of gains. We were not the first to observe risk seeking with negative prospects—at least two authors had reported that fact, but they had not made much of it. However, we were fortunate to have a framework that made the finding of risk seeking easy to interpret, and that was a milestone in our thinking. Indeed, we identified two reasons for this effect.

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. System 1 excels at constructing the best possible story that incorporates ideas currently activated, but it does not (cannot) allow for information it does not have.

shed new light on the planning fallacy

An adjuster is assigned to the claim—just as the underwriter was assigned, because she happens to be available. The adjuster gathers the facts of the case and provides an estimate of its ultimate cost to the company. The same adjuster then takes charge of negotiating with the claimant's representative to ensure that the claimant receives the benefits promised in the policy while also protecting the company from making excessive payments.

Anything that makes it easier for the associative machine to run smoothly will also bias beliefs. A reliable way to make people believe in falsehoods is frequent repetition, because familiarity is not easily distinguished from truth.

The experience of familiarity has a simple but powerful quality of 'pastness' that seems to indicate that it is a direct reflection of prior experience.

Leaders of large businesses sometimes make huge bets in expensive mergers and acquisitions, acting on the mistaken belief that they can manage the assets of another company better than its current owners do.

for System 1 in making routine decisions. The best we can do is a compromise: learn to recognize situations in which mistakes are likely and try harder to avoid significant mistakes when the stakes are high. The premise of this book is that it is easier to recognize other people's mistakes than our own.

This example highlights 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.

The same bias contributes to the common observation that many members of a collaborative team feel they have done more than their share and also feel that the others are not adequately grateful for their individual contributions.

Constantly questioning our own thinking would be impossibly tedious, and System 2 is much too slow and inefficient to serve as a substitute for System 1 in making routine decisions. The best we can do is a compromise: learn to recognize situations in which mistakes are likely and try harder to avoid significant mistakes when the stakes are high. The premise of this book is that it is easier to recognize other people's mistakes than our own.

poor evidence can make a very good story.

The mystery is how a conception of the utility of outcomes that is vulnerable to such obvious counterexamples survived for so long. I can explain it only by a weakness of the scholarly mind that I have often observed in myself. I call it theory-induced blindness:

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.

on reasoning about patterns of causation. They are products of System 1. In 1944, at about the same

When we asked 828 CEOs and senior executives from a variety of industries how much variation they expected to find in similar expert judgments, 10% was also the median answer and the most frequent one (the second most popular was 15%). A 10% difference would mean, for instance, that one of the two underwriters set a premium of $9,500 while the other quoted $10,500. Not a negligible difference, but one that an organization can be expected to tolerate.

The explanation is a simple availability bias: both spouses remember their own individual efforts and contributions much more clearly than those of the other, and the difference in availability leads to a difference in judged frequency. The bias is not necessarily self-serving: spouses also overestimated their contribution to causing quarrels, although to a smaller extent than their contributions to more desirable outcomes. The

The law asserts that if there are several ways of achieving the same goal, people will eventually gravitate to the least demanding course of action. In the economy of action, effort is a cost, and the acquisition of skill is driven by the balance of benefits and costs. Laziness is built deep into our nature.

the leaders of enterprises who make unsound bets do not do so because they are betting with other people's money. On the contrary, they take greater risks when they personally have more at stake.

We are pattern seekers, believers in a coherent world, in which regularities (such as a sequence of six girls) appear not by accident but as a result of mechanical causality or of someone's intention. We

The mere observation that there is usually more than 100% credit to go around is

pupils are sensitive indicators of mental effort—