Think Twice: Harnessing the Power of Counterintuition

The buyer of insurance and lottery tickets also personifies a third mistake: relying on immediate emotional reactions to risk instead of on an impartial judgment of possible future outcomes.

attest. Very few consequential decisions occur in a void, so you must consider the potential repercussions of any choice.3

The term hot hand refers to the belief that success breeds success. We tend to believe that if a basketball player has made one shot, he is more likely to make the next one.

The diversity prediction theorem tells us that a diverse crowd will always predict more accurately than the average person in the crowd. Not sometimes. Always.

When cause and effect is clear, you can have more confidence in your forecast.

Boeing’s problems with the 787 are symptomatic of the first decision mistake: embracing a strategy without fully understanding the conditions under which it succeeds or fails. Outsourcing is not universally good. For example, outsourcing does not make sense for products that require the complex integration of disparate subcomponents. The reason is

Carefully consider the sample size.

Our chapter’s final decision mistake—inflexibility in the face of evidence that change is necessary—helps

Ask whether the theory behind your decision making accounts for circumstances. People frequently attempt to extrapolate successful choices from prior experiences to new situations, with predictably poor results. Flawed research that draws common attributes from organizations that have done well and offers those attributes as a general prescription