We also have a skewed perception of probable gains and losses: We overestimate the likelihood of unlikely things. Insurance is a profitable business because people would rather suffer a series of guaranteed small losses (premiums) than risk a single but unlikely catastrophic loss
When my kids are disagreeable (i.e., awful), or my partner is upset/angry, I often respond as if it’s a threat to my authority or value. I reflexively escalate and get back in their face(s). I now try to disassociate. What I mean by that: I take myself out of my “self” and see someone I care about upset. Being an observer, vs. being in the line of ... See more
Kahneman’s body of work demonstrates that we are often wrong but frequently confident. These shortcuts and mistakes are present in the structure of our brains, and impossible to avoid, but recognizing them helps us discern between trivial and important decisions and invest the appropriate intellectual capital.