People have little idea, by and large, of the investment world. They are convinced they have an advantage.
Intuition adds value even in the justly derided selection interview, but only after a disciplined collection of objective information and disciplined scoring of separate traits.
If the individual has relevant expertise, she will recognize the situation, and the intuitive solution that comes to her mind is likely to be correct. This.
Nature has placed mankind under the governance of two sovereign masters, pain and pleasure.
As we navigate our lives, we normally allow ourselves to be guided by impressions and feelings, and the confidence we have in our intuitive beliefs and preferences is usually justified. But not always. We are often confident even when we are wrong, and an objective observer is more likely to detect our errors than we are.
If you want to deter misconduct, you should tolerate some noise.
Averaging is mathematically guaranteed to reduce noise:.
Most of us, most of the time, live with the unquestioned belief that the world looks as it does because that’s the way it is.
We can live comfortably with colleagues without ever noticing that they actually do not see the world as we do.
Familiarity breeds liking. This is a mere exposure effect.
The same sound will be experienced as very loud or quite faint, depending on whether it was preceded by a whisper or by a roar.
When we substitute an easier question for the one we should be answering, errors are bound to occur.
If the second object starts moving instantly, they describe it as having been “launched” by the first. Experiments have shown that six-month-old infants see the sequence of events as a cause-effect scenario, and they indicate surprise when the sequence is altered. We are evidently ready from birth to have impressions of causality, which do not depend on reasoning about patterns of causation. They are products of System 1.
It is more useful to pay attention to people who disagree with you than to pay attention to those who agree.
Whatever their flaws, rankings are less noisy than ratings.
The distinction between two selves is applied to the measurement of well-being, where we find again that what makes the experiencing self happy is not quite the same as what satisfies the remembering self.
There is a genuine limit on people’s ability to assign distinct labels to stimuli on a dimension, and that limit is around seven labels.
There is essentially no evidence of situations in which people do very poorly and models do very well with the same information.
Relying on causal thinking about a single case is a source of predictable errors. Taking the statistical view, which we will also call the outside view, is a way to avoid these errors.
Venn diagrams apply only to probability, not to similarity. Hence the predictable logical error that many people make.
People can overcome some of the superficial factors that produce illusions of truth when strongly motivated to do so.