That is the meaning of the statement that “people are not adequately sensitive to sample size.”

formulas that assign equal weights to all the predictors are often superior, because they are not affected by accidents of sampling.

His observation was astute and correct: occasions on which he praised a performance were likely to be followed by a disappointing performance, and punishments were typically followed by an improvement. But the inference he had drawn about the efficacy of reward and punishment was completely off the mark. What he had observed is known as regression

This embarrassing episode remains one of the most instructive experiences of my professional life. I eventually learned three lessons from it. The first was immediately apparent: I had stumbled onto a distinction between two profoundly different approaches to forecasting, which Amos and I later labeled the inside view and the outside view. The

The more vivid description produces a higher decision weight for the same probability.

To derive the most useful information from multiple sources of evidence, you should always try to make these sources independent of each other.

The fans not only overestimated the probability of the events they focused on—they were also much too willing to bet on them.

For several weeks after Michael Jackson’s death, for example, it was virtually impossible to find a television channel reporting on another topic. In contrast, there is little coverage of critical but unexciting issues that provide less drama, such as declining educational standards or overinvestment of medical resources in the last year of life.

Thaler then turned to the CEO of the company, who was also present, and asked for his opinion. Without hesitation, the CEO answered, “I would like all of them to accept their risks.” In the context of that conversation, it was natural for the CEO to adopt a broad frame that encompassed all 25 bets.