Quotes About Decision

Losses are weighted about twice as much as gains in several contexts:

But of course the main reason that decision theorists study simple gambles is that this is what other decision theorists do. The field had a theory, expected utility theory, which was the foundation of the rational-agent model and is to this day the most important theory in the social sciences.

Because you have little direct knowledge of what goes on in your mind, you will never know that you might have made a different judgment or reached a different decision under very slightly different circumstances. Formulas do not suffer from such problems. Given the same input, they always return the same answer.

System 1 has more influence on behavior when System 2 is busy, and it has a sweet tooth.

The defining feature of System 2, in this story, is that its operations are effortful, and one of its main characteristics is laziness, a reluctance to invest more effort than is strictly necessary. As

When we substitute an easier question for the one we should be answering, errors are bound to occur.

Let's not fall for the outcome bias. This was a stupid decision even though it worked out well.

most effortful forms of slow thinking are those that require you to think fast.

The thought of accepting the large sure loss is too painful, and the hope of complete relief too enticing, to make the sensible decision that it is time to cut one's losses. This is where businesses that are losing ground to a superior technology waste their remaining assets in futile attempts to catch up. Because defeat is so difficult to accept, the losing side in wars often fights long past the point at which the victory of the other side is certain, and only a matter of time.

Facing a choice, we gave up rationality rather than give up the enterprise.

Hindsight bias has pernicious effects on the evaluations of decision makers. It leads observers to assess the quality of a decision not by whether the process was sound but by whether its outcome was good or bad.

She has no evidence for saying that the firm is badly managed. All she knows is that its stock has gone down. This is an outcome bias, part hindsight and part halo effect." "Let's not fall for the outcome bias. This was a stupid decision even though it worked out well.

But System 2 is not merely an apologist for System 1; it also prevents many foolish thoughts and inappropriate impulses from overt expression.

Decision makers tend to prefer the sure thing over the gamble (they are risk averse) when the outcomes are good. They tend to reject the sure thing and accept the gamble (they are risk seeking) when both outcomes are negative.

The emotional tail wags the rational dog

psychologists Keith Stanovich and Richard West, and will refer to two systems in the mind, System 1 and System 2. 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.

It is easier to change directions in a crisis, but this was not a crisis.

the response to losses is stronger than the response to corresponding gains. This is loss aversion.

In such cases, the greatest responsibility for avoiding the planning fallacy lies with the decision makers who approve the plan. If they do not recognize the need for an outside view, they commit a planning fallacy.

It explains why we can think fast, and how we are able to make sense of partial information in a complex world.

defining risk is thus an exercise in power.

the decision weights that people assign to outcomes are not identical to the probabilities of these outcomes

Links, sagte Humboldt. Wieso links, fragte Bonpland. Also rechts, sagte Humboldt. Aber warum rechts? Zum Teufel, rief Humboldt, jetzt werde es ihm zu blöd.

Nobody, said Humboldt, had a destiny. One simply decided to feign one until one came to believe in it oneself. But so many things didn't fit in with it, one had to really force oneself.