By Daniel Kahneman January 20, 2019 ⋅ 8 min read ⋅ Books
Part 1: Two Systems
Similar enough to understand each other, different enough to surprise each other.
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.
When face with a difficult question, we often answer an easier one instead, usually without noticing the substitution.
The experiencing self vs the remembering self.
System 1 is fast, accesses memory without intention and without effort.
System 2 is slow, is in charge of self-control.
It is the mark of effortful activities that they interfere with each other.
Intense focus and make people effectively blind.
System 2 is engaged when system 1 cannot answer.
The division of labor between system 1 and system 2 is highly efficient as it minimizes effort and optimizes performance.
A limitation is that system 1 cannot be turned off.
You experienced a conflict between a task that you intended to carry out and an automatic response that interfered with it.
It’s easier to recognize other people’s mistakes than our own.
Anything that occupies your working memory reduces your ability to think.Why? Because thinking and storage are done in the same place! Or use the same resources.
Dilation of the pupils is the effect of using system 2.
As you become skilled in a task, it’s demand for energy diminishes.
“She did not forget about the meeting.She was completely focused on something else when the meeting was set and she just didn’t hear you.” You can’t forget what you’ve never learnt.Like being drunk.
Self-control and deliberate thought apparently draw on the same limited budget of effort.
Flow: expending considerable effort for long periods of time without having to exert willpower.
Two forms of effort: concentration on the task and the deliberate control of attention.
After exerting self-control in one task, you do not feel like making an effort in another unless necessary.
Glucose levels appear to affect the amount of willpower we can exert.Fits the theory that brains require a lot of energy.
System 1 automatically does association activation.
Embodied cognition: you think with your body, not only with your brain.
Priming happens by system 1.
You experience greater cognitive ease in perceiving a word you have already seen earlier.
A reliable way to make people believe in falsehoods is frequent repetition, because familiarity is not easily distinguished from the truth.
Cognitive strain mobilizes system 2.
Automatic search for causality done by system 1.
The context affects the interpretation.
When uncertain, system 1 bets on an answer, and the bets are guided by experience.
The rules of betting are intelligent, recent events and current context have the most weight in determining an interpretation.When no recent event comes to mind, more distant memories govern.
Uncertainty and doubt are the domains of system 2.
The standard practice of open discussion gives too much weight to the opinions of those who speak early and assertively, causing others to line up behind them.
It is the consistency of the information that matters for a good story, not its completeness.
Determining attractiveness is done by system 1, automatic.
A remarkable aspect of your mental life is that you are rarely stumped.
When asked a difficult question, system 1 answers an easier version of the question and uses intensity matching to translate the answer from the easy question to the hard question.
Intensity matching example: How much would you pay for a massage? Have to convert feeling to money but no common variable.
Mental shotgun: answering one question leads to answering another related question.Computes more than intended.
Part 2: Heuristics and Biases
Extreme outcomes are more likely to be found in small than in large samples.This explanation is not causal.
System 2 is capable of doubt because it can maintain incompatible possibilities.
System 1 jumps to conclusions and will produce a representation of reality that makes too much sense.
The associative machinery seeks causes.
We do not think statistically but causally.
We are pattern seekers, believers in a coherent world.
To the untrained eye, randomness appears as regularity or tendency to cluster.
We are far too willing to reject the belief that much of what we see in life is random.
We pay more attention to the content of messages that to information about their reliability.
Many facts of the world are due to chance.
Anchoring effects.
Protective actions are usually designed to be adequate to the worst disaster actually experienced but they don’t expect a worse disaster to come.
People make judgments and decisions by consulting their emotions.People make choices that directly express their feelings without knowing they do so.
How do I feel about it VS what do I think about it.
Probability neglect: when assessing risk, we focus more on the numerator than the denominator.
Anchor your judgement of the probability of an outcome on a plausible base rate.
The most coherent stories are not necessarily the most probable, but they are plausible, and the notions of coherence, plausibility, and probability are easily confused.
Probable VS plausible
Subjects unwillingness to deduce the particular from the general was matched only by their willingness to infer the general from the particular.
Regression towards the mean: random events will tend towards the mean.
We add unnecessary reasons to events because we want a story
Part 3: Overconfidence
A compelling narrative fosters an illusion of inevitability.
Our comforting conviction that the world makes sense rests on a secure foundation: our almost unlimited ability to ignore our ignorance.
Be careful using the words know, intuition, premonition.
The mind that makes up narratives about the past is a sense-making organ.
A general limitation of the human mind is the imperfect ability to reconstruct past states of knowledge or beliefs that have changed.
The illusion that one has understood the past feeds the further illusion that one can predict and control the future.
The correlation coefficient defines the extent to which two measures are determined by shared factors.
Place more emphasis on how the context shapes a person’s actions
We don’t put an accurate weighting on how luck impacts success
Subjective confidence in a judgement is not reasoned evaluation of the probability that this judgement is correct.
The diagnostic for the existence of any skill is the consistency of individual differences in achievement.
The illusion of skill is prevalent in the stock market industry.
Facts that challenge such basic assumptions are not absorbed.The mind doesn’t believe them.
To our minds, everything makes sense in hindsight.
The reason people who are more knowledgeable are often less reliable predictors is because that person who acquires more knowledge develops an enhanced illusion of her skill and becomes unrealistically overconfident.
The march of history is false.Luck plays a large role in history.
Errors of prediction are inevitable because the world is unpredictable.
High subjective confidence is not to be trusted as an indicator of accuracy.
Expertise in a domain is not a single skill but rather a large collection of skills.
Two basic conditions for acquiring a skill
An environment that is sufficiently regular to be predictable
An opportunity to learn these regularities through prolonged practice
When both of these conditions are satisfied, intuitions are likely to be skilled.
Intuition cannot be trusted in the absence of stable regularities in the environment.Is this how children develop “intuitive physics”?
Whether professionals have a chance to develop intuitive expertise depends essentially on the quality and speed of feedback, as well as on sufficient opportunity to practice.
Experts have some intuitive skills in some of their tasks, but they haven’t learned to identify the situations and the tasks in which intuition will betray them.
The unrecognized limits of professional skill help explain why experts are often overconfident.
System 1 is often able to produce quick answers to difficult questions by substitution, creating coherence where there is none.The question that is answered is not one that was intended, but the answer is produced quickly and may be sufficiently plausible to pass the lax and lenient review of system 2.
People who have information about an individual case rarely feel the need to know the statistics of the class to which the case belongs.
We try to believe that the general case doesn’t apply to our unique case but that isn’t rational nor statistical.
An unbiased appreciation of uncertainty is a cornerstone of rationality, but it isn’t what people want.
The main obstacle to overcoming overconfident optimism is that subjective confidence is determined by the coherence of the story one had constructed, not by the quality and amount of the information that supports it.
Premortem: “Imagine that we are a year into the future.We implemented the plan as it now exists.The outcome was a disaster.Please take 5 to 10 minutes to write a brief history of that disaster.
Don’t neglect the competitor.
Part 4: Choices
The psychological value of a gamble is therefore not the weighted average of its possible dollar outcomes; its the average of the utilities of these outcomes, each weighted by it probability.
People become risk seeking when all of their options are bad.
People are loss averse, why?
In mixed gambles, where both a gain and a loss are possible, loss aversion causes extremely risk-averse choices.
In bad choices, where a sure loss is compared to a larger loss that is merely probable, diminishing sensitivity causes risk seeking.
Prospect theory cannot deal with disappointment and regret.
The decision weights that people assign to outcomes are not identical to the probabilities of these outcomes.
People are not rational.
People attach values to gains and losses rather than to wealth, and the decision weights that they assign to outcomes are different from probabilities.
Consistent over weighting of improbable outcomes eventually leads to inferior outcomes.
People don’t think statistically, rationally, nor Bayesian.
System 1 cannot be turned off.
The actual probability is inconsequential, only the possibility matters.
Choice from description VS choice from experience.
Risk averse to gains, risk seeking to losses.
People expect to have stronger emotional reactions to an outcome that is produced by action than to the same outcome when it is produced by inaction.
Judgments are coherent within situations but don’t make sense if compared to other situations.
Joint evaluation wins over isolated evaluation.E.g.You say this was an outstanding speech because you compared it to her other speeches.Compared to others, she was still inferior.
The human mind isn’t bound to reality as system 1 demonstrates.System 1 doesn’t act in accordance with reality.
E.g.The one month survival rate is 90% VS There is 10% mortality in the first month.
Frame-bound decisions VS reality-bound decisions.Context VS reality.
Your moral feelings are attached to frames, to descriptions of reality rather than reality itself.
Part 5: Two Selves
The experiencing self vs the remembering self.
In the cold hand experiment, the error reflects two principles of memory: duration neglect and the peak-end rule.
People choose by memory when they decide whether or not to repeat an experience.
Odd as it may seem, I am my remembering self, and the experiencing self, who does my living, is like a stranger to me.
Peoples evaluations of their lives and their actual experience may be related, but they are also different.
A mood heuristic is one way to answer life satisfaction questions.
Experience well-being is on average unaffected by marriage, not because marriage makes no difference to happiness but because it changes some aspects of life for the better and others for the worse.
Nothing in life is as important as you think it is when you are thinking about it.
Time is neglected, causing experiences that will retain their attention value in the long term to be appreciated less than they deserve to be.
The mind is good with stories, but it does not appear to be well designed for the processing of time.
Rationality is also described as whether their preferences and beliefs are consistent.
The acquisition of skills requires a regular environment, an adequate opportunity to practice, and rapid and unequivocal feedback about the correctness of thoughts and actions.Same advice as in Peak.
A richer language is essential to the skill of constructive criticism. E.g.Medicine.
Books Mentioned
Stumbling on Happiness
The Wisdom of Crowds
Expert Political Judgement: How Good Is It? How Can We Know?