problems. The reality is that we are prone to making mistakes, which when combined with incomplete information and lots of uncertainty, lead to poor outcomes. A bigger problem is what happens after the fact. Once outcomes are revealed, hindsight bias kicks in and lots of commentators suggest they knew what was going to happen before the fact.

Raise your Awareness.

The donor statistics point to our second mistake: the perception that people decide what is best for them independent of how the choice is framed.

Heterogeneity means each agent has different and evolving decision rules that both reflect the environment and attempt to anticipate change in it.

Then there is coping with the subconscious influences. Control over these influences requires awareness of the influence, motivation to deal with it, and the willingness to devote attention to address possible poor decisions. In the real world, satisfying all three control conditions is extremely difficult, but the path starts with awareness.29

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.

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.

The main reason, psychologists believe, is that anchoring is predominantly subconscious.

People have a strong tendency to stick to an established perspective and are slow to consider alternatives.