Thinking, Fast and Slow

“We are making an additional investment because we do not want to admit failure. This is an instance of the sunk-cost fallacy.”

Anchoring in the assessment of subjective probability distributions.

Because adherence to standard operating procedures is difficult to second-guess, decision makers who expect to have their decisions scrutinized with hindsight are driven to bureaucratic solutions—and to an extreme reluctance to take risks.

You can see why the common admonition to “act calm and kind regardless of how you feel” is very good advice: you are likely to be rewarded by actually feeling calm and kind.

The tendency to like (or dislike) everything about a person—including things you have not observed—is known as the halo effect.

The laziness of System 2 is part of the story.

When forecasting the outcomes of risky projects, executives too easily fall victim to the planning fallacy. In its grip, they make decisions based on delusional optimism rather than on a rational weighting of gains, losses, and probabilities. They overestimate benefits and underestimate costs. They spin scenarios of success while overlooking the po

This may be considered the single most important piece of advice regarding how to increase accuracy in forecasting through improved methods. Using such distributional information from other ventures similar to that being forecasted is called…

Some highlights have been hidden or truncated due to export limits.

In a paper titled “Trading Is Hazardous to Your Wealth,” they showed that, on average, the most active traders had the poorest results, while the investors who traded the least earned the highest returns. In another paper, titled “Boys Will Be Boys,” they showed that men acted on their useless ideas

an environment that is sufficiently regular to be predictable an opportunity to learn these regularities through prolonged practice