People think about life in terms of changes, not levels. They can be changes from the status quo or changes from what was expected, but whatever form they take, it is changes that make us happy or miserable. That was a big idea.

The fact that a loss hurts more than an equivalent gain gives pleasure is called loss aversion. It has become the single most powerful tool in the behavioral economist’s arsenal.

Humans, on the other hand, also weigh another aspect of the purchase: the perceived quality of the deal. That is what transaction utility captures. It is defined as the difference between the price actually paid for the object and the price one would normally expect to pay, the reference price

This is an illustration of the big idea of this article, one that made my hands shake as I read: using these heuristics causes people to make predictable errors. Thus the title of the paper: heuristics and biases.

Giving up the opportunity to sell something does not hurt as much as taking the money out of your wallet to pay for it.

I think there is a long Jewish tradition that history and wisdom are being transmitted from one generation to another not through lectures and history books, but through anecdotes, funny stories, and appropriate jokes.

A slow hunch is not one of those “aha” insights when everything becomes clear. Instead, it is more of a vague impression that there is something interesting going on, and an intuition that there could be something important lurking not far away. The problem with a slow hunch is you have no way to know whether it will lead to a dead end. I felt like

He did so by positing that people’s happiness—or utility, as economists like to call it—increases as they get wealthier, but at a decreasing rate. This principle is called diminishing sensitivity. As wealth grows, the impact of a given increment of wealth, say $100,000, falls.

Self-control is, centrally, about conflict. And, like tango, it takes (at least) two to have a conflict. Maybe I needed a model with two selves.