Sublime

Suppose that you need to hire a sales representative for your firm. If you are serious about hiring the best possible person for the job, this is what you should do. First, select a few traits that are prerequisites for success in this position (technical proficiency, engaging personality, reliability, and so on). Don’t overdo it—six dimensions is

In his book Thinking, Fast and Slow, Daniel Kahneman

systematic biases in human decision-making (Kahneman, 2011; Kahneman et al., 1982).

Man, he wrote, has two systems of thought: System 1, our animal mind, is fast, instinctive, and emotional; System 2 is slow, deliberative, and logical. And System 1 is far more influential. In fact, it guides and steers our rational thoughts.

Richard Thaler tells of a discussion about decision making he had with the top managers of the 25 divisions of a large company. He asked them to consider a risky option in which, with equal probabilities, they could lose a large amount of the capital they controlled or earn double that amount. None of the executives was willing to take such a

would define outcomes as gains and losses, not as states of wealth.

Kahneman and others have advanced the concept of “bounded rationality,” which suggests that most of us make decisions using intuition or rules of thumb, kind of like looking at the sky to determine if it will rain, rather than spending hours poring over weather forecasts.

“He was very happy with a $20,000 bonus three years ago, but his salary has gone up by 20% since, so he will need a higher bonus to get the same utility.” “Both candidates are willing to accept the salary we’re offering, but they won’t be equally satisfied because their reference points are different. She currently has a much higher salary.” “She’s

people attach values to gains and losses rather than to wealth,