Quotes About Decision-making

The executive's decision would today be described as an example of the affect heuristic, where judgments and decisions are guided directly by feelings of liking and disliking, with little deliberation or reasoning.

The evidence presents a profound challenge to the idea that humans have consistent preferences and know how to maximize them, a cornerstone of the rational-agent model. An inconsistency is built into the design of our minds.

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

You could not compute the product of 17 × 24 while making a left turn into dense traffic, and you certainly should not try. You

Although Humans are not irrational, they often need help to make more accurate judgments and better decisions, and in some cases policies and institutions can provide that help.

Social scientists in the 1970s broadly accepted two ideas about human nature. First, people are generally rational, and their thinking is normally sound. Second, emotions such as fear, affection, and hatred explain most of the occasions on which people depart from rationality.

To a psychologist, it is self-evident that people are neither fully rational nor completely selfish, and that their tastes are anything but stable. Our two disciplines seemed to be studying different species, which the behavioral economist Richard Thaler later dubbed Econs and Humans.

He weighs losses about twice as much as gains, which is normal.

framing effects: the large changes of preferences that are sometimes caused by inconsequential variations in the wording of a choice problem.

The conclusion is that the ease with which instances come to mind is a System 1 heuristic, which is replaced by a focus on content when System 2 is more engaged. Multiple lines of evidence converge on the conclusion that people who let themselves be guided by System 1 are more strongly susceptible to availability biases than others who are in a state of higher vigilance. The

We called this reliance on the ease of memory search the availability heuristic.

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.

An unbiased appreciation of uncertainty is a cornerstone of rationality

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.

costs are not losses.

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%.

The way to block errors that originate in System 1 is simple in principle: recognize the signs that you are in a cognitive minefield, slow down, and ask for reinforcement from System 2. This is how you will proceed when you next encounter the Müller-Lyer illusion. When you see lines with fins pointing in different directions, you will recognize the situation as one in which you should not trust your impressions of length.

What came quickly to my mind was an intuition from System 1. I'll have to start over and search my memory deliberately.

President Truman famously asked for a "one-armed economist" who would take a clear stand; he was sick and tired of economists who kept saying, "On the other hand Ã¢â'¬Â¦

Self-criticism is one of the functions of System 2.

The most important development in the field since Meehl's original work is Robyn Dawes's famous article "The Robust Beauty of Improper Linear Models in Decision Making.

intuitive heuristics: when faced with a difficult question, we often answer an easier one instead, usually without noticing the substitution.