The average investor’s return is significantly lower than market indices due primarily to market timing.
Negotiations over a shrinking pie are especially difficult because they require an allocation of losses. People tend to be much more easygoing when they bargain over an expanding pie.
Optimism is normal, but some fortunate people are more optimistic than the rest of us. If you are genetically endowed with an optimistic bias, you hardly need to be told that you are a lucky person – you already feel fortunate.
It’s clear that policymakers and economists are going to be interested in the measurement of well-being primarily as it correlates with health; they also want to know whether researchers can validate subjective responses with physiological indices.
It is the consistency of the information that matters for a good story, not its completeness. Indeed, you will often find that knowing little makes it easier to fit everything you know into a coherent pattern.
I used to hold a unitary view, in which I proposed that only experienced happiness matters, and that life satisfaction is a fallible estimate of true happiness.
Some memories come with a very compelling sense of truth about them. And that happens to be the case even with memories that are not true.
The concept of happiness has to be reorganised.
To better avoid errors, you should talk to people who disagree with you and you should talk to people who are not in the same emotional situation you are.
People just hate the idea of losing. Any loss, even a small one, is just so terrible to contemplate that they compensate by buying insurance, including totally absurd policies like air travel.
I would not advise people to buy a car or house without making a list. You will probably improve your intuitions by making a list and then sleeping on it.
We’re generally overconfident in our opinions and our impressions and judgments.
By their very nature, heuristic shortcuts will produce biases, and that is true for both humans and artificial intelligence, but the heuristics of AI are not necessarily the human ones.
Facts that challenge basic assumptions-and thereby threaten people’s livelihood and self-esteem-are simply not absorbed. The mind does not digest them.
The easiest way to increase happiness is to control your use of time.
People assign much higher probability to the truth of their opinions than is warranted.
It’s nonsense to say money doesn’t buy happiness, but people exaggerate the extent to which more money can buy more happiness.
When people think of the outcomes of their decisions, they think much more short term than that. They think in terms of gains and losses.
If there is time to reflect, slowing down is likely to be a good idea.
An individual who expresses high confidence probably has a good story, which may or may not be true.