Think Twice: Harnessing the Power of Counterintuition

each team has good local information but poor global information.

You can track your individual or group premortems in your decision journal. Watching for the possible sources of failure may also reveal early signs of trouble.

second mistake associated with reversion to the mean—a misinterpretation of what the data says.

Firstborns are generally ambitious, close minded, and conventional, while later-born children are venturesome, agreeable, and open minded (i.e., born to rebel).1

Consider what you see and read from individuals as entertainment, not as education. Similarly, be aware that the function of an individual agent outside the system may be very different from that function within the system.

In reality, their performance was simply reverting to the mean.

effect. Simulation is a tool that can help our learning process. Simulations are low cost, provide feedback, and have proved their value in other domains like military planning and pilot training.23

Repeated, good outcomes provide us with confirming evidence that our strategy is good and everything is fine. This illusion lulls us into an unwarranted sense of confidence and sets us up for a (usually negative) surprise.

10 Crowds tend to make accurate predictions when three conditions prevail—diversity, aggregation, and incentives. Diversity is about people having different ideas and different views of things. Aggregation means you can bring the group’s information together. Incentives are rewards for being right and penalties for being wrong that are often, but n

One of the Kelly formula’s central lessons is that betting too much in a system with extreme outcomes leads to ruin.