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Thinking, Fast and Slow Paperback – April 2, 2013
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*Major New York Times Bestseller
*More than 2.6 million copies sold
*One of The New York Times Book Review's ten best books of the year
*Selected by The Wall Street Journal as one of the best nonfiction books of the year
*Presidential Medal of Freedom Recipient
*Daniel Kahneman's work with Amos Tversky is the subject of Michael Lewis's best-selling The Undoing Project: A Friendship That Changed Our Minds
In his mega bestseller, Thinking, Fast and Slow, Daniel Kahneman, world-famous psychologist and winner of the Nobel Prize in Economics, takes us on a groundbreaking tour of the mind and explains the two systems that drive the way we think.
System 1 is fast, intuitive, and emotional; System 2 is slower, more deliberative, and more logical. The impact of overconfidence on corporate strategies, the difficulties of predicting what will make us happy in the future, the profound effect of cognitive biases on everything from playing the stock market to planning our next vacation―each of these can be understood only by knowing how the two systems shape our judgments and decisions.
Engaging the reader in a lively conversation about how we think, Kahneman reveals where we can and cannot trust our intuitions and how we can tap into the benefits of slow thinking. He offers practical and enlightening insights into how choices are made in both our business and our personal lives―and how we can use different techniques to guard against the mental glitches that often get us into trouble. Topping bestseller lists for almost ten years, Thinking, Fast and Slow is a contemporary classic, an essential book that has changed the lives of millions of readers.
Review
“It is an astonishingly rich book: lucid, profound, full of intellectual surprises and self-help value. It is consistently entertaining . . . So impressive is its vision of flawed human reason that the New York Times columnist David Brooks recently declared that Kahneman and Tversky's work ‘will be remembered hundreds of years from now,' and that it is ‘a crucial pivot point in the way we see ourselves.'”
―Jim Holt, The New York Times Book Review
“There have been many good books on human rationality and irrationality, but only one masterpiece. That masterpiece is Daniel Kahneman's Thinking, Fast and Slow . . . This is one of the greatest and most engaging collections of insights into the human mind I have read.”
―William Easterly, Financial Times
“I will never think about thinking quite the same. [Thinking, Fast and Slow] is a monumental achievement.”
―Roger Lowenstein, Bloomberg/Businessweek
“Brilliant . . . It is impossible to exaggerate the importance of Daniel Kahneman's contribution to the understanding of the way we think and choose. He stands among the giants, a weaver of the threads of Charles Darwin, Adam Smith and Sigmund Freud. Arguably the most important psychologist in history, Kahneman has reshaped cognitive psychology, the analysis of rationality and reason, the understanding of risk and the study of happiness and well-being.”
―Janice Gross Stein, The Globe and Mail
"Everyone should read Thinking, Fast and Slow.”
―Jesse Singal, Boston Globe
“[Thinking, Fast and Slow] is wonderful. To anyone with the slightest interest in the workings of his own mind, it is so rich and fascinating that any summary would seem absurd.”
―Michael Lewis, Vanity Fair
“Profound . . . As Copernicus removed the Earth from the centre of the universe and Darwin knocked humans off their biological perch, Mr. Kahneman has shown that we are not the paragons of reason we assume ourselves to be.”
―The Economist
“[A] tour de force of psychological insight, research explication and compelling narrative that brings together in one volume the high points of Mr. Kahneman's notable contributions, over five decades, to the study of human judgment, decision-making and choice . . . Thanks to the elegance and force of his ideas, and the robustness of the evidence he offers for them, he has helped us to a new understanding of our divided minds―and our whole selves.”
―Christoper F. Chabris, The Wall Street Journal
“A major intellectual event . . . The work of Kahneman and Tversky was a crucial pivot point in the way we see ourselves.”
―David Brooks, The New York Times
“For anyone interested in economics, cognitive science, psychology, and, in short, human behavior, this is the book of the year. Before Malcolm Gladwell and Freakonomics, there was Daniel Kahneman, who invented the field of behavior economics, won a Nobel . . . and now explains how we think and make choices. Here's an easy choice: read this.”
―The Daily Beast
“Daniel Kahneman is one of the most original and interesting thinkers of our time. There may be no other person on the planet who better understands how and why we make the choices we make. In this absolutely amazing book, he shares a lifetime's worth of wisdom presented in a manner that is simple and engaging, but nonetheless stunningly profound. This book is a must read for anyone with a curious mind.”
―Steven D. Levitt, William B. Ogden Distinguished Service Professor of Economics at the University of Chicago; co-author of Freakonomics and SuperFreakonomics
“Thinking, Fast and Slow is a masterpiece―a brilliant and engaging intellectual saga by one of the greatest psychologists and deepest thinkers of our time. Kahneman should be parking a Pulitzer next to his Nobel Prize.”
―Daniel Gilbert, Harvard University Professor of Psychology, author of Stumbling on Happiness, host of the award-winning PBS television series "This Emotional Life"
“This is a landmark book in social thought, in the same league as The Wealth of Nations by Adam Smith and The Interpretation of Dreams by Sigmund Freud.”
―Nassim Taleb, author of The Black Swan
“Daniel Kahneman is among the most influential psychologists in history and certainly the most important psychologist alive today. He has a gift for uncovering remarkable features of the human mind, many of which have become textbook classics and part of the conventional wisdom. His work has reshaped social psychology, cognitive science, the study of reason and of happiness, and behavioral economics, a field that he and his collaborator Amos Tversky helped to launch. The appearance of Thinking, Fast and Slow is a major event.”
―Steven Pinker, Harvard College Professor of Psychology, Harvard University, and author of How the Mind Works and The Better Angels of our Nature
- Print length499 pages
- LanguageEnglish
- PublisherFarrar, Straus and Giroux
- Publication dateApril 2, 2013
- Dimensions5.51 x 1.46 x 8.23 inches
- ISBN-100374533555
- ISBN-13978-0374533557
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From the Publisher
Praise for Thinking, Fast and Slow
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Product details
- Publisher : Farrar, Straus and Giroux; 1st edition (April 2, 2013)
- Language : English
- Paperback : 499 pages
- ISBN-10 : 0374533555
- ISBN-13 : 978-0374533557
- Item Weight : 14.8 ounces
- Dimensions : 5.51 x 1.46 x 8.23 inches
- Best Sellers Rank: #304 in Books (See Top 100 in Books)
- Customer Reviews:
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About the author

Daniel Kahneman (Hebrew: דניאל כהנמן, born March 5, 1934) is an Israeli-American psychologist notable for his work on the psychology of judgment and decision-making, as well as behavioral economics, for which he was awarded the 2002 Nobel Memorial Prize in Economic Sciences (shared with Vernon L. Smith). His empirical findings challenge the assumption of human rationality prevailing in modern economic theory. With Amos Tversky and others, Kahneman established a cognitive basis for common human errors that arise from heuristics and biases (Kahneman & Tversky, 1973; Kahneman, Slovic & Tversky, 1982; Tversky & Kahneman, 1974), and developed prospect theory (Kahneman & Tversky, 1979).
In 2011, he was named by Foreign Policy magazine to its list of top global thinkers. In the same year, his book Thinking, Fast and Slow, which summarizes much of his research, was published and became a best seller. He is professor emeritus of psychology and public affairs at Princeton University's Woodrow Wilson School. Kahneman is a founding partner of TGG Group, a business and philanthropy consulting company. He is married to Royal Society Fellow Anne Treisman.
In 2015 The Economist listed him as the seventh most influential economist in the world.
Bio from Wikipedia, the free encyclopedia. Photo by see page for author [Public domain], via Wikimedia Commons.
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The author was awarded the Nobel in Economics for his work on what he calls decision theory, or the study of the actual workings of the typical human mind in the evaluation of choices, and the book itself presents the findings of many decades of psychological studies that expose the endemic fallacious thinking that we are all prone to, more or less. The lives of all of us could be improved by lessons learned from this book, not just individually, through self-education, but also on the large scale, if the large scale decision makers in this society in and out of government could be educated as well. In fact, it is largely because these large scale decision makers are no better than the rest of us in their ability to think straight and plan well, that society is as screwed up as it is, and that essentially all of its institutions are diseased and corrupt. The lesson there, however, is that decision making needs to be returned to the individual - that the powers that be need to be deprived of their powers to mess up the lives of the rest of us.
Despite the many virtues of this book - it is well-written, engaging, and its academic author reasonably restrained in the tendencies of his tribe to blathering in abstractions - it is a bit disappointing at the very end, when the author proves unable to synthesize all his material into a comprehensive theory of the thinking, and deciding mind - or at least into a set of carefully formulated principles that provide a succinct summary of the principles of human thinking, both typical and ideal.
Kahneman uses throughout a construct that implies that we are of two minds: System 1 is the fast-thinking, intuitive, mind, prone to jumping to conclusions; while System 2 is the slow-thinking analytical mind, that is brought into play, if at all, only to critique and validate the conclusions that we have jumped to. System 2, we are told, is lazy, and if often just rubber-stamps the snap judgements of System 1, or if pressed, rationalize them, instead of digging critically as well as constructively into the complex underpinnings of the material and sorting them out as best it can.
Instead of working this construct up into a comprehensive model of mind, K merely uses it as a loose schema for representing the kinds of thinking thought to underlie the results derived from the many psychological experiments that he here reports on. This neglect raises the question at many points as to just how well the experimenters have really understood the thinking that underlies the behavior of their subjects. But this, I am sorry to say, is a weakness of virtually all psychological experimentation, which is still just beginning to come to grips with the complexity and varieties of cognitive style of the human mind.
What Kahneman does do, however, is to provide convenient labels for many characteristic types of fallacious thinking, although again, the exact role of System 1 and System 2, and their interaction, is inadequately explicated. Instead, towards the end of the book, another, somehow related, but nominally independent theme is developed: the disturbing divergence between the experiencing self and the remembering self. This is in itself such an interesting and important idea, so pregnant with both psychological and philosophical implications, that it could have used a fuller treatment, and again, there is no coherent integration of this theme with the System1/System2 construct.
The idea here is that our present experience includes our most salient memories of previous experiences - for example the highlights of past vacations, or out of the ordinary episodes of our lives. Somewhat surprisingly, though, what we remember is a systematic distortion of the actual experience. Our memory collapse the duration of various aspects of our experience and highlights only the peak moment(s) and the final moments, perhaps with a nod toward the initial presentation of the experience. And this systematic distortion of the actual experience in all its fullness, can lead us to make irrational and detrimental choices in deciding whether to repeat the experience in the future. Thus, a bad ending to an otherwise wonderful experience can spoil the whole thing for us in memory, and cause us to avoid similar experiences in the future, even though by simply anticipating and improving the ending we might make the whole experience as wonderful as most of the original was. Likewise, subjects in experiments involving either long durations of pain, or much shorter episodes of pain with a higher peak, were consistently more averse to the latter rather than the former - or they overemphasized the way these presentations ended as a factor in judging them as a whole.
These are important findings that go the heart of the question of how best to steer our course through life, but here is the only attempt at integration of this remembering vs experiencing self theme, and the System 1/ System 2 theme that I find in the final chapter, Conclusions:
"The remembering self is a construction of System 2. However, the distinctive features of the way it evaluates episodes and lives are characteristics of our memory. Duration neglect and the peak-end rule originate in System 1 and do not necessarily conform to the values of System 2".
There is more here, but it merely repeats the earlier analysis of the relevant experiments.
No evidence is presented as to the respective roles of System 1 and System 2 with respect to the laying down of memory, to its decay, or with respect to a recently discovered phenomenon: memory reconsolidation. Nor is any account taken of what has been learned, much of it in recent decades, about the interactions between short, intermediate, and long term memory, or any of the radically different modalities of episodic (picture strip) and semantic (organized, abstracted) memory. Consequently, Kahneman's vague reference to the "characteristics of our memory" is essentially a ducking of the question of what the remembering self is. I think that at best, the finding of the replacement of the original experience by an abstract predicated on peak-end bias is an exaggeration, though there's no question that "duration neglect" is in operation, and a good thing too, unless K means by "duration neglect" not just the stretches of minimally changing experience (which have little memorial significance anyway, but even the consciousness of how long the edited out parts were (this distinction was never made in Chapter 35, where the theme of the remembering vs. the experiencing self is first taken up).
Speaking for myself anyway, I have a much fuller memory of my most important experiences than Kahneman seems to indicate. Naturally the highlights are featured, but what I tend to remember are representative moments that I took conscious note of at the time, as though making a psychological photograph. I remember these moments also because I bring them up from time to time when I'm thinking about that experience. For example, I'm thinking now of a long distance race I did in 2014 (a very tough half-marathon, with almost 2000' of climbing). I remember: the beginning section as well as the ending section; each of the rest stations; certain moments of each of the major hill climbs; at least one moment from each of the descents; and a number of other happenings during the almost three hour event. For me in this race, the peak experience occurred right at the end, when I all but collapsed, yet managed to stagger to the finish line. That ending does naturally come first to mind as a representation of the entire event, but it is merely the culmination of a long and memorable experience with many moving parts, and if I want, my remembering self can still conjure up many other moments, as well as a clear sense of the duration of each of the sections of the course.
Over many years most memories fade, and it's certainly reasonable to suppose that in extreme cases, where they are all but forgotten, only a single representative moment might be retained. However, if we can say anything for sure about memory it is this: we remember what we continue to think of and to use, and we do that precisely because this material has continuing importance to us. The recent research in memory reconsolidation tells us that when we do bring up memories only occasionally, we reinforce them, but we also edit and modify them to reflect our current perspectives, and sometimes we conflate them with other seemingly related knowledge that we've accrued. We are thus prone to distort our own original memories over time, in some cases significantly, but we may still retain much more of the original experience that just the peak and the end, and if we do reinterpret our memories in the light of more recent experience, that's not necessarily a bad thing. In any case, the memories that occur in the present may be said to be a joint project of the experiencing as well as the remembering self, which rather erodes the whole Two Selves concept that Kahneman first posited.
I do not mean to criticize the valuable evidential material in the book, and in general I think that Kahneman, and the other researchers and thinkers whom he quotes, have drawn reasonable conclusions from the experiments they report on. But ultimately, the book, as well as the fields both of psychology and brain neurophysiology suffer both in coherence and meaningfulness because they aren't predicated on a more comprehensive theory of mind. It's the old story in science, first formulated by Karl Popper in his 1935 book, The Logic of Scientific Discovery: unless we approach the data with an hypothesis in mind - unless, indeed, we seek out data likely to be relevant to a particular hypothesis, we're not going to make any enduring progress in understanding that data in a comprehensively meaningful way, let alone be able to make falsifiable deductions about elements of the system for which we have at present no data. Popper's quotation from the German philosopher Novalis comes to mind - "Theories are nets: only he who casts will catch."
In the final, "Conclusions", chapter, K caricatures the abstract economists' model of homo econimicus (man as a rational optimizer of his utility), contrasting it with the more sophisticated and experientially grounded model of psychologists such as himself. In keeping with his penchant for framing (or spinning) his presentation favorably to his own perspective, he calls the economists' model "Econ", and his own "Human". In fact, "Econ" was never meant to represent man in all his humanity, and Kahneman's Economics Nobel, recognizing his decision theory contributions to economics, was preceded by many other Nobels to economists who had been expanding the concept of the economic actor into psychological territory for decades. In fact, the essential view of the Austrian economists dating from the 1920s (von Mises, Hayek, and their predecessors) is that economics is in the end wholly dependent on psychology because it is predicated on the unknowable, unquantifiable subjective value preferences of humans, acting individually and in concert. Cautious generalizations can perhaps be made about human psychology in general, but I think that on the whole the Austrians have been a bit wiser in their restraint than Kahneman and his many, and mostly lesser, pop psychology compatriots have proved in their often sensationalist extrapolations from lab experiments.
Here is an example, I think of Kahneman over-reaching. He speaks repeatedly of the laziness of System 2, and its foot dragging reluctance to get involved in the thinking process, but in the real world, snap judgements are good enough for immediate purposes, and the better part of rationality may be to go with one's fast thinking intuitive System 1: indeed, Kahneman acknowledges this himself in passing, both in his beginning and his ending, but this isn't enough to counterbalance the overall argument of his book.
Kahneman also, in his final chapter, speculatively extends his findings into the political sphere (his liberal Democratic Party bias has already been made clear by gratuitous and somewhat annoying usage of salient modern politicians in examples), but not to any great effect.
Kahneman advocates "libertarian paternalism" consisting of government programs that people are enrolled in automatically unless they opt out by checking a box on forms - thus manipulating the presentation frame so as to trick them into signing on to what some government bureaucrat thinks is good for them. Of course, as long as people are allowed to opt out, one can't call the choice here anything but libertarian, though to be consistent with their socialist mores, liberals like Kahneman really ought to object to such practices as being manipulative advertising. This libertarian finds nothing objectionable about the way such a choice might be presented - after all, the average man, if adequately educated and prepared for the real world, should have no trouble seeing through the frames. What is not only paternalistic, but totalitarian in spirit, is the extortion of taxpayer money to finance such government programs in the first place.
Somehow, it fails to occur to Kahneman that most people could be trained to recognize and avoid fallacious thinking during all those years of enforced and mostly wasteful schooling - just as most people can be trained to recognize the Müller-Lyer illusion for what it is. IMO every high school graduate should be required to learn to recognize and avoid the paradigm cases of fallacious thinking presented in Thinking, Fast, and Slow, and this material could profitably be expanded to cover the many rhetorical tricks used by the manipulators and spinmeisters, both public and private, who batten off of our society. With such training in critical thinking, and with the reintroduction of enough honest and rigor to begin high school graduates up to the 12th grade reading and writing proficiencies that were routine in the 1950s, the need for college as life preparation would be altogether obviated, and most young people could avoid wasting their early years in college, piling up debt, and get on with their work and/or their self-education, as they chose.
System 1 and System 2 form the backbone of this book.
System 1 is impulsive, and provides heuristic and intuitive guesses and reactions to stimuli without prompting. It can't be turned off. Why You See Is All There Is (WYSIATI). But it's also responsible for remarkably well-tuned intuitions, fast information-processing, "muscle memory," pattern-matching, intensity matching, face & situation recognition, and much of what makes human minds human. Author Daniel Kahneman points out situations in which System 1 is scientifically poor, including statistics (like the difference between 0.01% and 0.001%), random events, weighting time & duration in retrospect.
System 2 is more calculated, requires devoted effort and concentration in rationalizing & making decisions. It assigns value to past events, keeps score, questions bias, and carries out more intensive, deliberate calculations involving more data. It's like fetching data from main memory, rather than relying on the cache.
Kahneman's prose is rich with examples and experimental case studies, from visceral phenomena like pleasure vs. pain tolerance, and the tendency to derive general from specific, rather than the specific from the general (statistic).... to logic fallacies like optimism in planning, misjudging statistics, underestimating sampling, and sunk costs. He gives simple, easy-to-remember names to a lot of the phenomena he observed in studies, like the peak-end rule that describes how humans tend to judge pain or pleasure of a past event based on an average of how it ended and the peak of the experience, neglecting duration. He also provides solutions and checks & balances that can help us reduce bias, where possible. For example, to mitigate the planning fallacy, he writes:
1.) Identify an appropriate reference class.
2.) Obtain the statistics of the reference class. Use the statistics to generate a baseline prediction.
3.) Use specific information about the case to adjust the baseline prediction, if there are particular reasons to expect the optimistic bias to be more of less pronounced in this project than in others of the same type.
The author's life experiences, from serving as an evaluator in the Israeli defense forces to publishing papers as a professor, inform many of the studies and give them a human element and interest to which I could easily relate. I also appreciate his emotion, adding exclamation points to the observations that surprised him, or proved him wrong. He writes in an unassuming, humble, curious way that made each anecdote or cited study a joy to read.
Finally, I thought he -- and his editors -- divided the book brilliantly. Chapters are short, usually 8~16 pages, and they always concentrate on some nugget or fallacy that could be later referenced by a single term, like "anchoring," "regression to the mean," "the fourfold pattern," or "the halo effect." He builds up knowledge brick by brick, experiment by experiment, that after a few nights of reading, you begin to recognize fallacies and patterns in everyday life by the terms Kahneman has assigned to them.
My favorite part of each chapter is the end: a short section of quotations that describe and use key terms from the chapter, in an everyday, relatable way.
There are too many topics and quotes to list them all. Some of my favorites:
"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."
"Self-control requires attention and effort."
"His System 1 constructed a story, and his System 2 believed it. It happens to all of us."
"They didn't want more information that might spoil their story. WYSIATI."
"We often compute much more than we want or need. I call this excess computation the mental shotgun. It is impossible to aim at a single point with a shotgun because it shoots pellets that scatter, and it seems almost equally difficult for System 1 not to do more than System 2 charges it to do."
"Money-primed people become more independent than they would be without the associative trigger."
"He was asked whether he thought the company was financially sound, but he couldn't forget that he likes their product."
"Our aim in the negotiation is to get them anchored on this number."
"Let's make it clear that if that is their proposal, the negotiations are over. We do not want to start there."
"When the evidence is weak, one should stick with the base rates."
"They added a cheap gift to the expensive product, and made the whole deal less attractive. Less is more in this case."
"System 1 can deal with stories in which the elements are causally linked, but it is weak in statistical reasoning."
"The experiment shows that individuals feel relieved of responsibility when they know that others have heard the same request for help."
"We can't assume that they will really learn anything from mere statistics. Let's show them one or two representative individual cases to influence their System 1."
"But those with the most knowledge are often less reliable. The reason is that the person who acquires more knowledge develops an enhanced illusion of her skill and becomes unrealistically overconfident."
"The question is not whether these experts are well trained. It is whether their world is predictable."
"The research suggests a surprising conclusion: to maximize predictive accuracy, final decisions should be left to formulas, especially in low-validity environments."
"In this view, people often (but not always) take on risky projects because they are overly optimistic about the odds they face."
"A well-run organization will reward planners for precise execution and penalize them for failing to anticipate difficulties, and for failing to allow for difficulties that they could not have anticipated --the unknown unknowns."
"She is the victim of a planning fallacy. She's assuming a best-case scenario, but there are too many different ways for the plan to fail, and she cannot foresee them all."
"He weighs losses about twice as much as gains, which is normal."
"Think like a trader! You win a few, you lose a few."
"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."
"We are hanging on to that stock just to avoid closing our mental account at a loss. It's the disposition effect."
"The salesperson showed me the most expensive car seat and said it was the safest, and I could not bring myself to buy the cheaper model. It felt like a taboo tradeoff."
"Did he really have an opportunity to learn? How quick and how clear was the feedback he received on his judgments?"
"We want pain to be brief and pleasure to last. But our memory, a function of System 1, has evolved to represent the most intense moment of an episode of pain or pleasure (the peak) and the feelings when the episode was at its end. A memory that neglects duration will not serve our preference for long pleasure and short pains."
There are many, many more. Read the book for yourself and enjoy the wisdom!
Top reviews from other countries
I would recommend this book to anyone who wishes to seriously engage in exploring how we make decisions, and how we at times do so very badly indeed!
• People intuitively can't think in probabilities.
• Fast thinking (System 1) uses heuristics (mental short-cuts), intuition and perception/memory and the vast majority of our decisions are made using this systems.
• Slow thinking (System 2) is based on reason and deliberate thought.
• System 2, unless trained, will often inherently trust system 1
• People avoid cognitive effort (slow thinking) and rely on their intuition too much.
• Pain and pleasure drives mostly everything.
• Nothing in life is as important as you think it is when you are thinking about it.
• Intuition is nothing more than recognition (sometimes superior recognition).
• It is easier to recognize the mistakes of others than our own.
• We know ourselves much less than we think we do as we don’t know the majority of our thoughts which are in the subconscious.
• Our mood affects our subconscious thinking.
• System 2 is in-charge of detecting lies and System 1 in believing them.
• Halo effect – a tendency to like everything about a person if you like one aspect of their personality.
• Availability bias – most obvious and prevalent example pops up first in the mind
• Statistical sampling can give strange results when using small numbers.
• Anchoring has a huge effect on our thinking and decisions and it can be found everywhere.
• Priming – our thoughts and behaviors are affected much more by our environment and other things we are exposed to than we care to admit or recognize. We can be primed just by being exposed to words.
• People are very bad at dealing with small risks. Either they ignore them altogether or tend to overreact.
• People ignore base rates when come across any new information.
• We fool ourselves by constructing inaccurate accounts of the past.
• We do not recognize role of luck in our life.
• We should start judging decisions by how they were made and not only by their outcomes.
• Overconfidence in explaining the past makes us believe that we can predict the future as well.
• Surrounding yourself with like-minded people can be dangerous as it reinforces your beliefs and you ignore new facts which don't match your perceptions.
• Planning fallacy – projects almost always go over budget and take longer than expected.
• Loss aversion is the driving factor in most financial and other decisions.
• Endowment Effect – value of something goes up when you own it.
• Bad events weigh much more in our mind than good things.
• Prospect theory shows how human beings decide between alternatives that involve risk and uncertainty. It shows that people think in terms of expected utility relative to a reference point rather than absolute outcomes.
• Do not consider one risk or gamble in isolation, think of all of them spread over a long period of time and will see that this decision actually carries very little risk.
• People keep mental accounts for their expenses/losses or actions in order to keep score.
• In order to avoid hindsight bias, make decisions after very thorough thought or almost none.
• Framing of a question or a situation greatly affects our beliefs and preferences, and thus outcome.



















































