Thinking Fast and Slow

System 1 vs System 2 Mechanics

• The spontaneous search for an intuitive solution sometimes fails—neither an expert solution nor a heuristic answer comes to mind. In such cases we often find ourselves switching to a slower, more deliberate and effortful form of thinking. This is the slow thinking of the title. Fast thinking includes both variants of intuitive thought—the expert and the heuristic—as well as the entirely automatic mental activities of perception and memory, the operations that enable you to know there is a lamp on your desk or retrieve the name of the capital of Russia. The distinction between fast and slow thinking has been explored by many psychologists over the last twenty-five years. For reasons that I explain more fully in the next chapter, I describe mental life by the metaphor of two agents, called System 1 and System 2, which respectively produce fast and slow thinking.
• System 1 operates automatically and quickly, with little or no effort and no sense of voluntary control. System 2 allocates attention to the effortful mental activities that demand it, including complex computations. The operations of System 2 are often associated with the subjective experience of agency, choice, and concentration.
• The automatic operations of System 1 generate surprisingly complex patterns of ideas, but only the slower System 2 can construct thoughts in an orderly series of steps. I also describe circumstances in which System 2 takes over, overruling the freewheeling impulses and associations of System 1. You will be invited to think of the two systems as agents with their individual abilities, limitations, and functions.
• The control of attention is shared by the two systems. Orienting to a loud sound is normally an involuntary operation of System 1, which immediately mobilizes the voluntary attention of System 2. You may be able to resist turning toward the source of a loud and offensive comment at a crowded party, but even if your head does not move, your attention is initially directed to it, at least for a while. However, attention can be moved away from an unwanted focus, primarily by focusing intently on another target.
• The highly diverse operations of System 2 have one feature in common: they require attention and are disrupted when attention is drawn away. Here are some examples: Brace for the starter gun in a race. Focus attention on the clowns in the circus. Focus on the voice of a particular person in a crowded and noisy room. Look for a woman with white hair. Search memory to identify a surprising sound. Maintain a faster walking speed than is natural for you. Monitor the appropriateness of your behavior in a social situation. Count the occurrences of the letter a in a page of text. Tell someone your phone number. Park in a narrow space (for most people except garage attendants). Compare two washing machines for overall value. Fill out a tax form. Check the validity of a complex logical argument.
• One of the tasks of System 2 is to overcome the impulses of System 1. In other words, System 2 is in charge of self-control.
• Why call them System 1 and System 2 rather than the more descriptive “automatic system” and “effortful system”? The reason is simple: “Automatic system” takes longer to say than “System 1” and therefore takes more space in your working memory. This matters, because anything that occupies your working memory reduces your ability to think. You should treat “System 1” and “System 2” as nicknames, like Bob and Joe, identifying characters that you will get to know over the course of this book.
• System 2 is the only one that can follow rules, compare objects on several attributes, and make deliberate choices between options. The automatic System 1 does not have these capabilities. System 1 detects simple relations (“they are all alike,” “the son is much taller than the father”) and excels at integrating information about one thing, but it does not deal with multiple distinct topics at once, nor is it adept at using purely statistical information.
• It is normally easy and actually quite pleasant to walk and think at the same time, but at the extremes these activities appear to compete for the limited resources of System 2. You can confirm this claim by a simple experiment. While walking comfortably with a friend, ask him to compute 23 × 78 in his head, and to do so immediately. He will almost certainly stop in his tracks. My experience is that I can think while strolling but cannot engage in mental work that imposes a heavy load on short-term memory. If I must construct an intricate argument under time pressure, I would rather be still, and I would prefer sitting to standing.
• The conclusion is straightforward: self-control requires attention and effort. Another way of saying this is that controlling thoughts and behaviors is one of the tasks that System 2 performs.
• The list of situations and tasks that are now known to deplete self-control is long and varied. All involve conflict and the need to suppress a natural tendency. They include: avoiding the thought of white bears inhibiting the emotional response to a stirring film making a series of choices that involve conflict trying to impress others responding kindly to a partner’s bad behavior interacting with a person of a different race (for prejudiced individuals) The list of indications of depletion is also highly diverse: deviating from one’s diet overspending on impulsive purchases reacting aggressively to provocation persisting less time in a handgrip task performing poorly in cognitive tasks and logical decision making The evidence is persuasive: activities that impose high demands on System 2 require self-control, and the exertion of self-control is depleting and unpleasant. Unlike cognitive load, ego depletion is at least in part a loss of motivation. After exerting self-control in one task, you do not feel like making an effort in another, although you could do it if you really had to. In several experiments, people were able to resist the effects of ego depletion when given a strong incentive to do so.
• “Fred’s parents arrived late. The caterers were expected soon. Fred was angry.” You know why Fred was angry, and it is not because the caterers were expected soon. In your network of associationsmals in co, anger and lack of punctuality are linked as an effect and its possible cause, but there is no such link between anger and the idea of expecting caterers. A coherent story was instantly constructed as you read; you immediately knew the cause of Fred’s anger. Finding such causal connections is part of understanding a story and is an automatic operation of System 1. System 2, your conscious self, was offered the causal interpretation and accepted it.
• 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.
• Gilbert sees unbelieving as an operation of System 2, and he reported an elegant experiment to make his point. The participants saw nonsensical assertions, such as “a dinca is a flame,” followed after a few seconds by a single word, “true” or “false.” They were later tested for their memory of which sentences had been labeled “true.” In one condition of the experiment subjects were required to hold digits in memory during the task. The disruption of System 2 had a selective effect: it made it difficult for people to “unbelieve” false sentences. In a later test of memory, the depleted par muumbling toticipants ended up thinking that many of the false sentences were true. The moral is significant: when System 2 is otherwise engaged, we will believe almost anything. System 1 is gullible and biased to believe, System 2 is in charge of doubting and unbelieving, but System 2 is sometimes busy, and often lazy. Indeed, there is evidence that people are more likely to be influenced by empty persuasive messages, such as commercials, when they are tired and depleted.
• System 1 is indeed the origin of much that we do wrong, but it is also the origin of most of what we do right—which is most of what we do. Our thoughts and actions are routinely guided by System 1 and generally are on the mark. One of the marvels is the rich and detailed model of our world that is maintained in associative memory: it distinguishes surprising from normal events in a fraction of a second, immediately generates an idea of what was expected instead of a surprise, and automatically searches for some causal interpretation of surprises and of events as they take place. Memory also holds the vast repertory of skills we have acquired in a lifetime of practice, which automatically produce adequate solutions to challenges as they arise, from walking around a large stone on the path to averting the incipient outburst of a customer. The acquisition of skills requires a regular environment, an adequate opportunity to practice, and rapid and unequivocal feedback about the correctness of thoughts and actions. When these conditions are fulfilled, skill eventually develops, and the intuitive judgments and choices that quickly come to mind will mostly be accurate. All this is the work of System 1, which means it occurs automatically and fast. A marker of skilled performance is the ability to deal with vast amounts of information swiftly and efficiently. When a challenge is encountered to which a skilled response is available, that response is evoked. What happens in the absence of skill? Sometimes, as in the problem 17 × 24 = ?, which calls for a specific answer, it is immediately apparent that System 2 must be called in. But it is rare for System 1 to be dumbfounded. System 1 is not constrained by capacity limits and is profligate in its computations. When engaged in searching for an answer to one question, it simultaneously generates the answers to related questions, and it may substitute a response that more easily comes to mind for the one that was requested.

Choice Architecture and Framing

• For many years members of that office had paid for the tea or coffee to which they helped themselves during the day by dropping money into an “honesty box.” A list of suggested prices was posted. One day a banner poster was displayed just above the price list, with no warning or explanation. For a period of ten weeks a new image was presented each week, either flowers or eyes that appeared to be looking directly at the observer. No one commented on the new decorations, but the contributions to the honesty box changed significantly. The posters and the amounts that people put into the cash box (relative to the amount they consumed) are shown in figure 4. They deserve a close look.
• The principle of independent judgments (and decorrelated errors) has immediate applications for the conduct of meetings, an activity in which executives in organizations spend a great deal of their working days. A simple rule can help: before an issue is discussed, all members of the committee should be asked to write a very brief summary of their position. This procedure makes good use of the value of the diversity of knowledge and opinion in the group. The standard practice of open discussion gives too much weight to the opinions of those who speak early and assertively, causing others to line up behind them.
• Framing effects: Different ways of presenting the same information often evoke different emotions. The statement that “the odds of survival one month after surgery are 90%” is more reassuring than the equivalent statement that “mortality within one month of surgery is 10%.” Similarly, cold cuts described as “90% fat-free” are more attractive than when they are described as “10% fat.” The equivalence of the alternative formulations is transparent, but an individual normally sees only one formulation, and what she sees is all there is.
• “The question we face is whether this candidate can succeed. The question we seem to answer is whether she interviews well. Let’s not substitute.”
• Anchoring effects explain why, for example, arbitrary rationing is an effective marketing ploy. A few years ago, supermarket shoppers in Sioux City, Iowa, encountered a sales promotion for Campbell’s soup at about 10% off the regular price. On some days, a sign on the shelf said limit of 12 per person. On other days, the sign said no limit per person. Shoppers purchased an average of 7 cans when the limit was in force, twice as many as they bought when the limit was removed.
• “Risk” does not exist “out there,” independent of our minds and culture, waiting to be measured. Human beings have invented the concept of “risk” to help them understand and cope with the dangers and uncertainties of life. Although these dangers are real, there is no such thing as “real risk” or “objective risk.” To illustrate his claim, Slovic lists nine ways of defining the mortality risk associated with the release of a toxic material into the air, ranging from “death per million people” to “death per million dollars of product produced.” His point is that the evaluation of the risk depends on the choice of a measure—with the obvious possibility that the choice may have been guided by a preference for one outcome or another. He goes on to conclude that “defining risk is thus an exercise in power.”
• The solution to the puzzle appears to be that a question phrased as “how many?” makes you think of individuals, but the same question phrased as “what percentage?” does not.
• A good attorney who wishes to cast doubt on DNA evidence will not tell the jury that “the chance of a false match is 0.1%.” The statement that “a false match occurs in 1 of 1,000 capital cases” is far more likely to pass the threshold of reasonable doubt. The jurors hearing those words are invited to generate the image of the man who sits before them in the courtroom being wrongly convicted because of flawed DNA evidence.
• narrow framing: a sequence of two simple decisions, considered separately broad framing: a single comprehensive decision, with four options Broad framing was obviously superior in this case. Indeed, it will be superior (or at least not inferior) in every case in which several decisions are to be contemplated together. Imagine a longer list of 5 simple (binary) decisions to be considered simultaneously. The broad (comprehensive) frame consists of a single choice with 32 options. Narrow framing will yield a sequence of 5 simple choices. The sequence of 5 choices will be one of the 32 options of the broad frame. Will it be the best? Perhaps, but not very likely. A rational agent will of course engage in broad framing, but Humans are by nature narrow framers.
• This advice is not impossible to follow. Experienced traders in financial markets live by it every day, shielding themselves from the pain of losses by broad framing. As was mentioned earlier, we now know that experimental subjects could be almost cured of their loss aversion (in a particular context) by inducing them to “think like a trader,” just as experienced baseball card traders are not as susceptible to the endowment effect as novices are.
• “The salesperson showed me the most expensive car seat and said it was the safest, and I could not bring myself to buy the cheaper model. It felt like a taboo tradeoff.”
• A bad outcome is much more acceptable if it is framed as the cost of a lottery ticket that did not win than if it is simply described as losing a gamble. We should not be surprised: losses evokes stronger negative feelings than costs.
• An experiment that Amos carried out with colleagues at Harvard Medical School is the classic example of emotional framing. Physician participants were given statistics about the outcomes of two treatments for lung cancer: surgery and radiation. The five-year survival rates clearly favor surgery, but in the short term surgery is riskier than radiation. Half the participants read statistics about survival rates, the others received the same information in terms of mortality rates. The two descriptions of the short-term outcomes of surgery were: The one-month survival rate is 90%. There is 10% mortality in the first month. You already know the results: surgery was much more popular in the former frame (84% of physicians chose it) than in the latter (where 50% favored radiation). The logical equivalence of the two descriptions is transparent, and a reality-bound decision maker would make the same choice regardless of which version she saw. But System 1, as we have gotten to know it, is rarely indifferent to emotional words: mortality is bad, survival is good, and 90% survival sounds encouraging whereas 10% mortality is frightening. An important finding of the study is that physicians were just as susceptible to the framing effect as medically unsophisticated people (hospital patients and graduate students in a business school). Medical training is, evidently, no defense against the power of framing.
• We can recognize System 1 at work. It delivers an immediate response to any question about rich and poor: when in doubt, favor the poor. The surprising aspect of Schelling’s problem is that this apparently simple moral rule does not work reliably. It generates contradictory answers to the same problem, depending on how that problem is framed. And of course you already know the question that comes next. Now that you have seen that your reactions to the problem are influenced by the frame, what is your answer to the question: How should the tax code treat the children of the rich and the poor? Here again, you will probably find yourself dumbfounded. You have moral intuitions about differences between the rich and the poor, but these intuitions depend on an arbitrary reference point, and they are not about the real problem. This problem—the question about actual states of the world—is how much tax individual families should pay, how to fill the cells in the matrix of the tax code. You have no compelling moral intuitions to guide you in solving that problem. Your moral feelings are attached to frames, to descriptions of reality rather than to reality itself.
• A woman has bought two $80 tickets to the theater. When she arrives at the theater, she opens her wallet and discovers that the tickets are missing. Will she buy two more tickets to see the play? A woman goes to the theater, intending to buy two tickets that cost $80 each. She arrives at the theater, opens her wallet, and discovers to her dismay that the $160 with which she was going to make the purchase is missing. She could use her credit card. Will she buy the tickets? Respondents who see only one version of this problem reach different conclusions, depending on the frame. Most believe that the woman in the first story will go home without seeing the show if she has lost tickets, and most believe that she will charge tickets for the show if she has lost money. The explanation should already be familiar—this problem involves mental accounting and the sunk-cost fallacy. The different frames evoke different mental accounts, and the significance of the loss depends on the account to which it is posted. When tickets to a particular show are lost, it is natural to post them to the account associated with that play. The cost appears to have doubled and may now be more than the experience is worth. In contrast, a loss of cash is charged to a “general revenue” account—the theater patron is slightly poorer than she had thought she was, and the question she is likely to ask herself is whether the small reduction in her disposable wealth will change her decision about paying for tickets. Most respondents thought it would not. The version in which cash was lost leads to more reasonable decisions. It is a better frame because the loss, even if tickets were lost, is “sunk,” and sunk costs should be ignored. History is irrelevant and the only issue that matters is the set of options the theater patron has now, and their likely consequences. Whatever she lost, the relevant fact is that she is less wealthy than she was before she opened her wallet. If the person who lost tickets were to ask for my advice, this is what I would say: “Would you have bought tickets if you had lost the equivalent amount of cash? If yes, go ahead and buy new ones.” Broader frames and inclusive accounts generally lead to more rational decisions.
• “They will feel better about what happened if they manage to frame the outcome in terms of how much money they kept rather than how much they lost.”
• “Let’s reframe the problem by changing the reference point. Imagine we did not own it; how much would we think it is worth?”
• “They ask you to check the box to opt out of their mailing list. Their list would shrink if they asked you to check a box to opt in!”
• Humans, unlike Econs, need help to make good decisions, and there are informed and unintrusive ways to provide that help.

Cognitive Biases and Heuristics

• To be a good diagnostician, a physician needs to acquire a large set of labels for diseases, each of which binds an idea of the illness and its symptoms, possible antecedents and causes, possible developments and consequences, and possible interventions to cure or mitigate the illness. Learning medicine consists in part of learning the language of medicine. A deeper understanding of judgments and choices also requires a richer vocabulary than is available in everyday language. The hope for informed gossip is that there are distinctive patterns in the errors people make. Systematic errors are known as biases, and they recur predictably in particular circumstances. When the handsome and confident speaker bounds onto the stage, for example, you can anticipate that the audience will judge his comments more favorably than he deserves. The availability of a diagnostic label for this bias—the halo effect—makes it easier to anticipate, recognize, and understand.
• When you are asked what you are thinking about, you can normally answer. You believe you know what goes on in your mind, which often consists of one conscious thought leading in an orderly way to another. But that is not the only way the mind works, nor indeed is that the typical way. Most impressions and thoughts arise in your conscious experience without your knowing how they got there. You cannot tracryd>e how you came to the belief that there is a lamp on the desk in front of you, or how you detected a hint of irritation in your spouse’s voice on the telephone, or how you managed to avoid a threat on the road before you became consciously aware of it. The mental work that produces impressions, intuitions, and many decisions goes on in silence in our mind.
• Many years ago I visited the chief investment officer of a large financial firm, who told me that he had just invested some tens of millions of dollars in the stock of Ford Motor Company. When I asked how he had made that decision, he replied that he had recently attended an automobile show and had been impressed. “Boy, do they know how to make a car!” was his explanation. He made it very clear that he trusted his gut feeling and was satisfied with himself and with his decision. I found it remarkable that he had apparently not considered the one question that an economist would call relevant: Is Ford stock currently underpriced? Instead, he had listened to his intuition; he liked the cars, he liked the company, and he liked the idea of owning its stock. From what we know about the accuracy of stock picking, it is reasonable to believe that he did not know what he was doing.
• When confronted with a problem—choosing a chess move or deciding whether to invest in a stock—the machinery of intuitive thought does the best it can. 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 is what happens when a chess master looks at a complex position: the few moves that immediately occur to him are all strong. When the question is difficult and a skilled solution is not available, intuition still has a shot: an answer may come to mind quickly—but it is not an answer to the original question. The question that the executive faced (should I invest in Ford stock?) was difficult, but the answer to an easier and related question (do I like Ford cars?) came readily to his mind and determined his choice. This is the essence of intuitive heuristics: when faced with a difficult question, we often answer an easier one instead, usually without noticing the substitution.
• You will be invited to think of the two systems as agents with their individual abilities, limitations, and functions. In rough order of complexity, here are some examples of the automatic activities that are attributed to System 1: Detect that one object is more distant than another. Orient to the source of a sudden sound. Complete the phrase “bread and…” Make a “disgust face” when shown a horrible picture. Detect hostility in a voice. Answer to 2 + 2 = ? Read words on large billboards. Drive a car on an empty road. Find a strong move in chess (if you are a chess master). Understand simple sentences. Recognize that a “meek and tidy soul with a passion for detail” resembles an occupational stereotype.
• The authors note that the most remarkable observation of their study is that people find its results very surprising. Indeed, the viewers who fail to see the gorilla are initially sure that it was not there—they cannot imagine missing such a striking event. The gorilla study illustrates two important facts about our minds: we can be blind to the obvious, and we are also blind to our blindness.
• System 1 has biases, however, systematic errors that it is prone to make in specified circumstances. As we shall see, it sometimes answers easier questions than the one it was asked, and it has little understanding of logic and statistics. One further limitation of System 1 is that it cannot be turned off. If you are shown a word on the screen in a language you know, you will read it—unless your attention is totally focused elsewhere.
• We were told that a strong attraction to a patient with a repeated history of failed treatment is a danger sign—like the fins on the parallel lines. It is an illusion—a cognitive illusion—and I (System 2) was taught how to recognize it and advised not to believe it or act on it.
• Because System 1 operates automatically and cannot be turned off at will, errors of intuitive thought are often difficult to prevent. Biases cannot always be avoided, because System 2 may have no clue to the error. Even when cues to likely errors are available, errors can be prevented only by the enhanced monitoring and effortful activity of System 2. As a way to live your life, however, continuous vigilance is not necessarily good, and it is certainly impractical. Constantly questioning our own thinking would be impossibly tedious, and System 2 is much too slow and inefficient to serve as a substitute for System 1 in making routine decisions. The best we can do is a compromise: learn to recognize situations in which mistakes are likely and try harder to avoid significant mistakes when the stakes are high.
• One of Hess’s findings especially captured my attention. He had noticed that the pupils are sensitive indicators of mental effort—they dilate substantially when people multiply two-digit numbers, and they dilate more if the problems are hard than if they are easy.
• During a mental multiplication, the pupil normally dilated to a large size within a few seconds and stayed large as long as the individual kept working on the problem; it contracted immediately when she found a solution or gave up. As we watched from the corridor, we would sometimes surprise both the owner of the pupil and our guests by asking, “Why did you stop working just now?” The answer from inside the lab was often, “How did you know?” to which we would reply, “We have a window to your soul.”
• The sophisticated allocation of attention has been honed by a long evolutionary history. Orienting and responding quickly to the gravest threats or most promising opportunities improved the chance of survival, and this capability is certainly not restricted to humans. Even in modern humans, System 1 takes over in emergencies and assigns total priority to self-protective actions. Imagine yourself at the wheel of a car that unexpectedly skids on a large oil slick. You will find that you have responded to the threat before you became fully conscious of it.
• Now suppose that at the end of the page you get another instruction: count all the commas in the next page. This will be harder, because you will have to overcome the newly acquired tendency to focus attention on the letter f. One of the significant discoveries of cognitive psychologists in recent decades is that switching from one task to another is effortful, especially under time pressure.
• This is how the law of least effort comes to be a law. Even in the absence of time pressure, maintaining a coherent train of thought requires discipline. An observer of the number of times I look at e-mail or investigate the refrigerator during an hour of writing could wahene dd reasonably infer an urge to escape and conclude that keeping at it requires more self-control than I can readily muster.
• Several psychological studies have shown that people who are simultaneously challenged by a demanding cognitive task and by a temptation are more likely to yield to the temptation. Imagine that you are asked to retain a list of seven digits for a minute or two. You are told that remembering the digits is your top priority. While your attention is focused on the digits, you are offered a choice between two desserts: a sinful chocolate cake and a virtuous fruit salad. The evidence suggests that you would be more likely to select the tempting chocolate cake when your mind is loaded with digits. System 1 has more influence on behavior when System 2 is busy, and it has a sweet tooth.
• The phenomenon has been named ego depletion. In a typical demo thypical denstration, participants who are instructed to stifle their emotional reaction to an emotionally charged film will later perform poorly on a test of physical stamina—how long they can maintain a strong grip on a dynamometer in spite of increasing discomfort. The emotional effort in the first phase of the experiment reduces the ability to withstand the pain of sustained muscle contraction, and ego-depleted people therefore succumb more quickly to the urge to quit.
• Ego depletion is not the same mental state as cognitive
• When you are actively involved in difficult cognitive reasoning or engaged in a task that requires self-control, your blood glucose level drops. The effect is analogous to a runner who draws down glucose stored in her muscles during a sprint. The bold implication of this idea is that the effects of ego depletion could be undone by ingesting glucose, and Baumeister and his colleagues have confirmed this hypothesis
• Volunteers in one of their studies watched a short silent film of a woman being interviewed and were asked to interpret her body language. While they were performing the task, a series of words crossed the screen in slow succession. The participants were specifically instructed to ignore the words, and if they found their attention drawn away they had to refocus their concentration on the woman’s behavior. This act of self-control was known to cause ego depletion. All the volunteers drank some lemonade before participating in a second task. The lemonade was sweetened with glucose for half of them and with Splenda for the others. Then all participants were given a task in which they needed to overcome an intuitive response to get the correct answer. Intuitive errors are normally much more frequent among ego-depleted people, and the drinkers of Splenda showed the expected depletion effect. On the other hand, the glucose drinkers were not depleted. Restoring the level of available sugar in the brain had prevented the deterioration of performance.
• A disturbing demonstration of depletion effects in judgment was recently reported in the Proceedings of the National Academy of Sciences. The unwitting participants in the study were eight parole judges in Israel. They spend entire days reviewing applications for parole. The cases are presented in random order, and the judges spend little time on each one, an average of 6 minutes. (The default decision is denial of parole; only 35% of requests are approved. The exact time of each decision is recorded, and the times of the judges’ three food breaks—morning break, lunch, and afternoon break—during the day are recorded as well.) The authors of the study plotted the proportion of approved requests against the time since the last food break. The proportion spikes after each meal, when about 65% of requests are granted. During the two hours or so until the judges’ next feeding, the approval rate drops steadily, to about zero just before the meal. As you might expect, this is an unwelcome result and the authors carefully checked many alternative explanations. The best possible account of the data provides bad news: tired and hungry judges tend to fall back on the easier default position of denying requests for parole. Both fatigue and hunger probably play a role.
• Researchers have applied diverse methods to examine the connection between thinking and self-control. Some have addressed it by asking the correlation question: If people were ranked by their self-control and by their cognitive aptitude, would individuals have similar positions in the two rankings?
• A significant difference in intellectual aptitude emerged: the children who had shown more self-control as four-year-olds had substantially higher scores on tests of intelligence.
• Shane Frederick constructed a Cognitive Reflection Test, which consists of the bat-and-ball problem and two other questions, chosen because they also invite an intuitive answer that is both compelling and wrong (the questions are shown here). He went on to study the characteristics of students who score very low on this test—the supervisory function of System 2 is weak in these people—and found that they are prone to answer questions with the first idea that comes to mind and unwilling to invest the effort needed to check their intuitions.
• System 1 is impulsive and intuitive; System 2 is capable of reasoning, and it is cautious, but at least for some people it is also lazy. We recognize related differences among individuals: some people are more like their System 2; others are closer to their System 1. This simple test has emerged as one of the better predictors of laztestors of ly thinking.
• What makes some people more susceptible than others to biases of judgment? Stanovich published his conclusions in a book titled Rationality and the Reflective Mind, which offers a bold and distinctive approach to the topic of this chapter. He draws a sharp distinction between two parts of System 2—indeed, the distinction is so sharp that he calls them separate “minds.” One of these minds (he calls it algorithmic) deals with slow thinking and demanding computation. Some people are better than others in these tasks of brain power—they are the individuals who excel in intelligence tests and are able to switch from one task to another quickly and efficiently. However, Stanovich argues that high intelligence does not make people immune to biases. Another ability is involved, which he labels rationality. Stanovich’s concept of a rational person is similar to what I earlier labeled “engaged.” The core of his argument is that rationality should be distinguished from intelligence. In his view, superficial or “lazy” thinking is a flaw in the reflective mind, a failure of rationality. This is an attractive and thought-provoking idea. In support of it, Stanovich and his colleagues have found that the bat-and-ball question and others like it are somewhat better indicators of our susceptibility to cognitive errors than are conventional measures of intelligence, such as IQ tests.
• You did not will it and you could not stop it. It was an operation of System 1. The events that took place as a result of your seeing the words happened by a process called associative activation: ideas that have been evoked trigger many other ideas, in a spreading cascade of activity in your brain.
• There are different types of links: causes are linked to their effects (virus cold); things to their properties (lime green); things to the categories to which they belong (banana fruit).
• An idea that has been activated does not merely evoke one other idea. It activates many ideas, which in turn activate others. Furthermore, only a few of the activated ideas will register in consciousness; most of the work of associative thinking is silent, hidden from our conscious selves. The notion that we have limited access to the workings of our minds is difficult to accept because, naturally, it is alien to our experience, but it is true: you know far less about yourself than you feel you do.
• The word illusion brings visual illusions to mind, because we are all familiar with pictures that mislead. But vision is not the only domain of illusions; memory is also susceptible to them, as is thinking more generally.
• Authoritarian institutions and marketers have always known this fact. But it was psychologists who discovered that you do not have to repeat the entire statement of a fact or idea to make it appear true. People who were repeatedly exposed to the phrase “the body temperature of a chicken” were more likely to accept as true the statement that “the body temperature of a chicken is 144°” (or any other arbitrary number). The familiarity of one phrase in the statement sufficed to make the whole statement feel familiar, and therefore true. If you cannot remember the source of a statement, and have no way to relate it to other things you know, you have no option but to go with the sense of cognitive ease.
• In an article titled “Consequences of Erudite Vernacular Utilized Irrespective of Necessity: Problems with Using Long Words Needlessly,” he showed that couching familiar ideas in pretentious language is taken as a sign of poor intelligence and low credibility.
• How do you know that a statement is true? If it is strongly linked by logic or association to other beliefs or preferences you hold, or comes from a source you trust and like, you will feel a sense of cognitive ease. The trouble is that there may be other causes for your feeling of ease—including the quality of the font and the appealing rhythm of the prose—and you have no simple way of tracing your feelings to their source. This is the message of figure 5: the sense of ease or strain has multiple causes, and it is difficult to tease them apart. Difficult, but not impossible. People can overcome some of the superficial factors that produce illusions of truth when strongly motivated to do so. On most occasions, however, the lazy System 2 will adopt the suggestions of System 1 and march on.
• repetition induces cognitive ease and a comforting feeling of familiarity. The famed psychologist Robert Zajonc dedicated much of his career to the study of the link between the repetition of an arbitrary stimulus and the mild affection that people eventually have for it. Zajonc called it the mere exposure effect. A demonstration conducted in the student newspapers of the University of Michigan and of Michigan State University is one of my favorite experiments. For a period of some weeks, an ad-like box appeared on the front page of the paper, which contained one of the following Turkish (or Turkish-sounding) words: kadirga, saricik, biwonjni, nansoma, and iktitaf. The frequency with which the words were repeated varied: one of the words was shown only once, the others appeared on two, five, ten, or twenty-five separate occasions. (The words that were presented most often in one of the university papers were the least frequent in the other.) No explanation was offered, and readers’ queries were answered by the statement that “the purchaser of the display wished for anonymity.” When the mysterious series of ads ended, the investigators sent questionnaires to the university communities, asking for impressions of whether each of the words “means something ‘good’ or something ‘bad.’” The results were spectacular: the words that were presented more frequently were rated much more favorably than the words that had been shown only once or twice. The finding has been confirmed in many experiments, using Chinese ideographs, faces, and randomly shaped polygons. The mere exposure effect does not depend on the conscious experience of familiarity. In fact, the effect does not depend on consciousness at all: it occurs even when the repeated words or pictures are shown so quickly that the observers never become aware of having seen them. They still end up liking the words or pictures that were presented more frequently.
• A happy mood loosens the control of System 2 over performance: when in a good mood, people become more intuitive and more creative but also less vigilant and more prone to logical errors. Here again, as in the mere exposure effect, the connection makes biological sense. A good mood is a signal that things are generally going well, the environment is safe, and it is all right to let one’s guard down. A bad mood indicates that things are not going very well, there may be a threat, and vigilance is required. Cognitive ease is both a cause and a consequence of a pleasant feeling.
• “How many animals of each kind did Moses take into the ark?” The number of people who detect what is wrong with this question is so small that it has been dubbed the “Moses illusion.” Moses took no animals into the ark; Noah did. Like the incident of the wincing soup eater, the Moses illusion is readily explained by norm theory. The idea of animals going into the ark sets up a biblical context, and Moses is not abnormal in that context. You did not positively expect him, but the mention of his name is not surprising. It also helps that Moses and Noah have the same vowel sound and number of syllables.
• A story in Nassim Taleb’s The Black Swan illustrates this automatic search for causality. He reports that bond prices initially rose on the day of Saddam Hussein’s capture in his hiding place in Iraq. Investors were apparently seeking safer assets that morning, and the Bloomberg News service flashed this headline: U.S. TREASURIES RISE; HUSSEIN CAPTURE MAY NOT CURB TERRORISM. Half an hour later, bond prices fell back and the revised headline read: U.S. TREASURIES FALL; HUSSEIN CAPTURE BOOSTS ALLURE OF RISKY ASSETS. Obviously, Hussein’s capture was the major event of the day, and because of the way the automatic search for causes shapes our thinking, that event was destined to be the explanation of whatever happened in the market on that day. The two headlines look superficially like explanations of what happened in the market, but a statement that can explain two contradictory outcomes explains nothing at all. In fact, all the headlines do is satisfy our need for coherence: a large event is supposed to have consequences, and consequences need causes to explain them. We have limited information about what happened on a day, and System 1 is adept at finding a coherent causal story that links the fragments of knowledge at its disposal.
• In 1944, at about the same time as Michotte published his demonstrations of physical causality, the psychologists Fritz Heider and Mary-Ann Simmel used a method similar to Michotte’s to demonstrate the perception of intentional causality. They made a film, which lasts all of one minute and forty seconds, in which you see a large triangle, a small triangle, and a circle moving around a shape that looks like a schematic view of a house with an open door. Viewers see an aggressive large triangle bullying a smaller triangle, a terrified circle, the circle and the small triangle joining forces to defeat the bully; they also observe much interaction around a door and then an explosive finale. The perception of intention and emotion is irresistible; only people afflicted by autism do not experience it. All this is entirely in your mind, of course. Your mind is ready and even eager to identify agents, assign them personality traits and specific intentions, and view their actions as expressing individual propensities. Here again, the evidence is that we are born prepared to make intentional attributions: infants under one year old identify bullies and victims, and expect a pursuer to follow the most direct path in attempting to catch whatever it is chasing. The experience of freely willed action is quite separate from physical causality. Although it is your hand that picks up the salt, you do not think of the event in terms of a chain of physical causation. You experience it as caused by a decision that a disembodied you made, because you wanted to add salt to your food. Many people find it natural to describe their soul as the source and the cause of their actions.
• “She can’t accept that she was just unlucky; she needs a causal story. She will end up thinking that someone intentionally sabotaged her work.”
• Jumping to conclusions is efficient if the conclusions are likely to be correct and the costs of an occasional mistake acceptable, and if the jump saves much time and effort. Jumping to conclusions is risky when the situation is unfamiliar, the stakes are high, and there is no time to collect more information. These are the circumstances in which intuitive errors are probable, which may be prevented by a deliberate intervention of System 2.
• The operations of associative memory contribute to a general confirmation bias. When asked, “Is Sam friendly?” different instances of Sam’s behavior will come to mind than would if you had been asked “Is Sam unfriendly?” A deliberate search for confirming evidence, known as positive test strategy, is also how System 2 tests a hypothesis. Contrary to the rules of philosophers of science, who advise testing hypotheses by trying to refute them, people (and scientists, quite often) seek data that are likely to be compatible with the beliefs they currently hold. The confirmatory bias of System 1 favors uncritical acceptance of suggestions and exaggeration of the likelihood of extreme and improbable events. If you are asked about the probability of a tsunami hitting California within the next thirty years, the images that come to your mind are likely to be images of tsunamis, in the manner Gilbert proposed for nonsense statements such as “whitefish eat candy.” You will be prone to overestimate the probability of a disaster.
• If you like the president’s politics, you probably like his voice and his appearance as well. The tendency to like (or dislike) everything about a person—including things you have not observed—is known as the halo effect. The term has been in use in psychology for a century, but it has not come into wide use in everyday language. This is a pity, because the halo effect is a good name for a common bias that plays a large role in shaping our view of people and situations. It is one of the ways the representation of the world that System 1 generates is simpler and more coherent than the real thing.
• You meet a woman named Joan at a party and find her personable and easy to talk to. Now her name comes up as someone who could be asked to contribute to a charity. What do you know about Joan’s generosity? The correct answer is that you know virtually nothing, because there is little reason to believe that people who are agreeable in social situations are also generous contributors to charities. But you like Joan and you will retrieve the feeling of liking her when you think of her. You also like generosity and generous people. By association, you are now predisposed to believe that Joan is generous. And now that you believe she is generous, you probably like Joan even better than you did earlier, because you have added generosity to her pleasant attributes.
• The halo effect is also an example of suppressed ambiguity: like the word bank, the adjective stubborn is ambiguous and will be interpreted in a way that makes it coherent with the context.
• Early in my career as a professor, I graded students’ essay exams in the conventional way. I would pick up one test booklet at a time and read all that student’s essays in immediate succession, grading them as I went. I would then compute the total and go on to the next student. I eventually noticed that my evaluations of the essays in each booklet were strikingly homogeneous. I began to suspect that my grading exhibited a halo effect, and that the first question I scored had a disproportionate effect on the overall grade. The mechanism was simple: if I had given a high score to the first essay, I gave the student the benefit of the doubt whenever I encountered a vague or ambiguous statement later on. This seemed reasonable. Surely a student who had done so well on the first essay would not make a foolish mistake in the second one! But there was a serious problem with my way of doing things. If a student had written two essays, one strong and one weak, I would end up with different final grades depending on which essay I read first. I had told the students that the two essays had equal weight, but that was not true: the first one had a much greater impact on the final grade than the second. This was unacceptable. I adopted a new procedure. Instead of reading the booklets in sequence, I read and scored all the students’ answers to the first question, then went on to the next one. I made sure to write all the scores on the inside back page of the booklet so that I would not be biased (even unconsciously) when I read the second essay. Soon after switching to the new method, I made a disconcerting observation: my confidence in my grading was now much lower than it had been. The reason was that I frequently experienced a discomfort that was new to me. When I was disappointed with a student’s second essay and went to the back page of the booklet to enter a poor grade, I occasionally discovered that I had given a top grade to the same student’s first essay. I also noticed that I was tempted to reduce the discrepancy by changing the grade that I had not yet written down, and found it hard to follow the simple rule of never yielding to that temptation. My grades for the essays of a single student often varied over a considerable range. The lack of coherence left me uncertain and frustrated.
• The measure of success for System 1 is the coherence of the story it manages to create. The amount and quality of the data on which the story is based are largely irrelevant. When information is scarce, which is a common occurrence, System 1 operates as a machine for jumping to conclusions. Consider the following: “Will Mindik be a good leader? She is intelligent and strong…” An answer quickly came to your mind, and it was yes. You picked the best answer based on the very limited information available, but you jumped the gun. What if the next two adjectives were corrupt and cruel? Take note of what you did not do as you briefly thought of Mindik as a leader. You did not start by asking, “What would I need to know before I formed an opinion about the quality of someone’s leadership?” System 1 got to work on its own from the first adjective: intelligent is good, intelligent and strong is very good. This is the best story that can be constructed from two adjectives, and System 1 delivered it with great cognitive ease. The story will be revised if new information comes in (such as Mindik is corrupt), but there is no waiting and no subjective discomfort. And there also remains a bias favoring the first impression.
• Overconfidence: As the WY SIATI rule implies, neither the quantity nor the quality of the evidence counts for much in subjective confidence. The confidence that individuals have in their beliefs depends mostly on the quality of the story they can tell about what they see, even if they see little. We often fail to allow for the possibility that evidence that should be critical to our judgment is missing—what we see is all there is. Furthermore, our associative system tends to settle on a coherent pattern of activation and suppresses doubt and ambiguity.
• “They made that big decision on the basis of a good report from one consultant. WYSIATI—what you see is all there is. They did not seem to realize how little information they had.” “They didn’t want more information that might spoil their story. WYSIATI.”
• Alex Todorov, my colleague at Princeton, has explored the biological roots of the rapid judgments of how safe it is to interact with a stranger. He showed that we are endowed with an ability to evaluate, in a single glance at a stranger’s face, two potentially crucial facts about that person: how dominant (and therefore potentially threatening) he is, and how trustworthy he is, whether his intentions are more likely to be friendly or hostile. The shape of the face provides the cues for assessing dominance: a “strong” square chin is one such cue. Facial expression (smile or frown) provides the cues for assessing the stranger’s intentions. The combination of a square chin with a turned-down mouth may spell trouble. The accuracy of face reading is far from perfect: round chins are not a reliable indicator of meekness, and smiles can (to some extent) be faked. Still, even an imperfect ability to assess strangers confers a survival advantage.
• Todorov then compared the results of the electoral races to the ratings of competence that Princeton students had made, based on brief exposure to photographs and without any political context. In about 70% of the races for senator, congressman, and governor, the election winner was the candidate whose face had earned a higher rating of competence. This striking result was quickly confirmed in national elections in Finland, in zoning board elections in England, and in various electoral contests in Australia, Germany, and Mexico.
• As expected, the effect of facial competence on voting is about three times larger for information-poor and TV-prone voters than for others who are better informed and watch less television. Evidently, the relative importance of System 1 in determining voting choices is not the same for all people. We will encounter other examples of such individual differences.
• Participants in one of the numerous experiments that were prompted by the litigation following the disastrous Exxon Valdez oil spill were asked their willingness to pay for nets to cover oil ponds in which migratory birds often drown. Different groups of participants stated their willingness to pay to save 2,000, 20,000, or 200,000 birds. If saving birds is an economic good it should be a sum-like variable: saving 200,000 birds should be worth much more than saving 2,000 birds. In fact, the average contributions of the three groups were $80, $78, and $88 respectively. The number of birds made very little difference. What the participants reacted to, in all three groups, was a prototype—the awful image of a helpless bird drowning, its feathers soaked in thick oil. The almost complete neglect of quantity in such emotional contexts has been confirmed many times.
• You do not automatically count the number of syllables of every word you read, but you can do it if you so choose. However, the control over intended computations is far from precise: we often compute much more than we want or need. I call this excess computation the mental shotgun. It is impossible to aim at a single point with a shotgun because it shoots pellets that scatter, and it seems almost equally difficult for System 1 not to do more than System 2 charges it to do.
• “Evaluating people as attractive or not is a basic assessment. You do that automatically whether or not you want to, and it influences you.”
• A remarkable aspect of your mental life is that you are rarely stumped. True, you occasionally face a question such as 17 × 24 = ? to which no answer comes immediately to mind, but these dumbfounded moments are rare. The normal state of your mind is that you have intuitive feelings and opinions about almost everything that comes your way. You like or dislike people long before you know much about them; you trust or distrust strangers without knowing why; you feel that an enterprise is bound to succeed without analyzing it. Whether you state them or not, you often have answers to questions that you do not completely understand, relying on evidence that you can neither explain nor defend.
• System 1 will find a related question that is easier and will answer it. I call the operation of answering one question in place of another substitution. I also adopt the following terms: The target question is the assessment you intend to produce. The heuristic question is the simpler question that you answer instead.
• The technical definition of heuristic is a simple procedure that helps find adequate, though often imperfect, answers to difficult questions.
• Target Question Heuristic Question How much would you contribute to save an endangered species? How much emotion do I feel when I think of dying dolphins? How happy are you with your life these days? What is my mood right now? How popular is the president right now? How popular will the president be six months from now? How should financial advisers who prey on the elderly be punished? How much anger do I feel when I think of financial predators? This woman is running for the primary. How far will she go in politics? Does this woman look like a political winner?
• A survey of German students is one of the best examples of substitution. The survey that the young participants completed included the following two questions: How happy are you these days? How many dates did you have last month? < stрr to a p height="0%" width="0%">The experimenters were interested in the correlation between the two answers. Would the students who reported many dates say that they were happier than those with fewer dates? Surprisingly, no: the correlation between the answers was about zero. Evidently, dating was not what came first to the students’ minds when they were asked to assess their happiness. Another group of students saw the same two questions, but in reverse order: How many dates did you have last month? How happy are you these days? The results this time were completely different. In this sequence, the correlation between the number of dates and reported happiness was about as high as correlations between psychological measures can get. What happened? The explanation is straightforward, and it is a good example of substitution. Dating was apparently not the center of these students’ life (in the first survey, happiness and dating were uncorrelated), but when they were asked to think about their romantic life, they certainly had an emotional reaction. The students who had many dates were reminded of a happy aspect of their life, while those who had none were reminded of loneliness and rejection. The emotion aroused by the dating question was still on everyone’s mind when the query about general happiness came up.
• The Affect Heuristic The dominance of conclusions over arguments is most pronounced where emotions are involved. The psychologist Paul Slovic has proposed an affect heuristic in which people let their likes and dislikes determine their beliefs about the world. Your political preference determines the arguments that you find compelling. If you like the current health policy, you believe its benefits are substantial and its costs more manageable than the costs of alternatives.
• “Do we still remember the question we are trying to answer? Or have we substituted an easier one?”
• Characteristics of System 1 generates impressions, feelings, and inclinations; when endorsed by System 2 these become beliefs, attitudes, and intentions operates automatically and quickly, with little or no effort, and no sense of voluntary control can be programmed by System 2 to mobilize attention when a particular pattern is detected (search) executes skilled responses and generates skilled intuitions, after adequate training creates a coherent pattern of activated ideas in associative memory links a sense of cognitive ease to illusions of truth, pleasant feelings, and reduced vigilance distinguishes the surprising from the normal infers and invents causes and intentions neglects ambiguity and suppresses doubt is biased to believe and confirm exaggerates emotional consistency (halo effect) focuses on existing evidence and ignores absent evidence (WYSIATI) generates a limited set of basic assessments represents sets by norms and prototypes, does not integrate matches intensities across scales (e.g., size to loudness) computes more than intended (mental shotgun) sometimes substitutes an easier question for a difficult one (heuristics) is more sensitive to changes than to states (prospect theory)* overweights low probabilities* shows diminishing sensitivity to quantity (psychophysics)* responds more strongly to losses than to gains (loss aversion)* frames decision problems narrowly, in isolation from one another
• But do you discriminate sufficiently between “I read in The New York Times…” and “I heard at the watercooler…”? Can your System 1 distinguish degrees of belief? The principle of WY SIATI suggests that it cannot.
• The law of small numbers is a manifestation of a general bias that favors certainty over doubt,
• The illusion of pattern affects our lives in many ways off the basketball court. How many good years should you wait before concluding that an investment adviser is unusually skilled? How many successful acquisitions should be needed for a board of directors to believe that the CEO has extraordinary flair for such deals? The simple answer to these questions is that if you follow your intuition, you will more often than not err by misclassifying a random event as systematic. We are far too willing to reject the belief that much of what we see in life is random.
• The exaggerated faith in small samples is only one example of a more general illusion—we pay more attention to the content of messages than to information about their reliability, and as a result end up with a view of the world around us that is simpler and more coherent than the data justify. Jumping to conclusions is a safer sport in the world of our imagination than it is in reality.
• it is an anchoring effect. It occurs when people consider a particular value for an unknown quantity before estimating that quantity.
• Any number that you are asked to consider as a possible solution to an estimation problem will induce an anchoring effect.
• Le Boeuf and Shafir note that a “well-intentioned child who turns down exceptionally loud music to meet a parent’s demand that it be played at a ‘reasonable’ volume may fail to adjust sufficiently from a high anchor, and may feel that genuine attempts at compromise are being overlooked.”
• This is the word we use when someone causes us to see, hear, or feel something by merely bringing it to mind. For example, the question “Do you now feel a slight numbness in your left leg?” always prompts quite a few people to report that their left leg does indeed feel a little strange.
• System 1 tries its best to construct a world in which the anchor is the true number.
• The effect of anchors is an exception. Anchoring can be measured, and it is an impressively large effect. Some visitors at the San Francisco Exploratorium were asked the following two questions: Is the height of the tallest redwood more or less than 1,200 feet? What is your best guess about the height of the tallest redwood? The “high anchor” in this experiment was 1,200 feet. For other participants, the first question referred to a “low anchor” of 180 feet. The difference between the two anchors was 1,020 feet. As expected, the two groups produced very different mean estimates: 844 and 282 feet. The difference between them was 562 feet. The anchoring index is simply the ratio of the two differences (562/1,020) expressed as a percentage: 55%. The anchoring measure would be 100% for people who slavishly adopt the anchor as an estimate, and zero for people who are able to ignore the anchor altogether. The value of 55% that was observed in this example is typical. Similar values have been observed in numerous other problems. The anchoring effect is not a laboratory curiosity; it can be just as strong in the real world.
• In an experiment conducted some years ago, real-estate agents were given an opportunity to assess the value of a house that was actually on the market. They visited the house and studied a comprehensive booklet of information that included an asking price. Half the agents saw an asking price that was substantially higher than the listed price of the house; the other half saw an asking price that was substantially lower. Each agent gave her opinion about a reasonable buying price for the house and the lowest price at which she would agree to sell the house if she owned it. The agents were then asked about the factors that had affected their judgment. Remarkably, the asking price was not one of these factors; the agents took pride in their ability to ignore it. They insisted that the listing price had no effect on their responses, but they were wrong: the anchoring effect was 41%. Indeed, the professionals were almost as susceptible to anchoring effects as business school students with no real-estate experience, whose anchoring index was 48%.
• Powerful anchoring effects are found in decisions that people make about money, such as when they choose how much to contribute al.ls denied to a cause. To demonstrate this effect, we told participants in the Exploratorium study about the environmental damage caused by oil tankers in the Pacific Ocean and asked about their willingness to make an annual contribution “to save 50,000 offshore Pacific Coast seabirds from small offshore oil spills, until ways are found to prevent spills or require tanker owners to pay for the operation.” This question requires intensity matching: the respondents are asked, in effect, to find the dollar amount of a contribution that matches the intensity of their feelings about the plight of the seabirds. Some of the visitors were first asked an anchoring question, such as, “Would you be willing to pay $5…,” before the point-blank question of how much they would contribute. When no anchor was mentioned, the visitors at the Exploratorium—generally an environmentally sensitive crowd—said they were willing to pay $64, on average. When the anchoring amount was only $5, contributions averaged $20. When the anchor was a rather extravagant $400, the willingness to pay rose to an average of $143. The difference between the high-anchor and low-anchor groups was $123. The anchoring effect was above 30%, indicating that increasing the initial request by $100 brought a return of $30 in average willingness to pay.
• The participants who have been exposed to random or absurd anchors (such as Gandhi’s death at age 144) confidently deny that this obviously useless information could have influenced their estimate, and they are wrong.
• We defined the availability heuristic as the process of judging frequency by “the ease with which instances come to mind.” The statement seemed clear when we formulated it, but the concept of availability has been refined since then. The two-system approach had not yet been developed when we studied availability, and we did not attempt to determine whether this heuristic is a deliberate problem-solving strategy or an automatic operation. We now know that both systems are involved.
• The availability heuristic, like other heuristics of judgment, substitutes one question for another: you wish to estimate the size se ost c d of a category or the frequency of an event, but you report an impression of the ease with which instances come to mind.
• A salient event that attracts your attention will be easily retrieved from memory. Divorces among Hollywood celebrities and sex scandals among politicians attract much attention, and instances will come easily to mind. You are therefore likely to exaggerate the frequency of both Hollywood divorces and political sex scandals.
• A dramatic event temporarily increases the availability of its category. A plane crash that attracts media coverage will temporarily alter your feelings about the safety of flying. Accidents are on your mind, for a while, after you see a car burning at the side of the road, and the world is for a while a more dangerous place.
• You must make the effort to reconsider your impressions and intuitions by asking such questions as, “Is our belief that theft s by teenagers are a major problem due to a few recent instances in our neighborhood?” or “Could it be that I feel no need to get a flu shot because none of my acquaintances got the flu last year?” Maintaining one’s vigilance against biases is a chore—but the chance to avoid a costly mistake is sometimes worth the effort.
• Psychologists enjoy experiments that yield paradoxical results, and they have appliserv heighted Schwarz’s discovery with gusto. For example, people: believe that they use their bicycles less often after recalling many rather than few instances are less confident in a choice when they are asked to produce more arguments to support it are less confident that an event was avoidable after listing more ways it could have been avoided are less impressed by a car after listing many of its advantages A professor at UCLA found an ingenious way to exploit the availability bias. He asked different groups of students to list ways to improve the course, and he varied the required number of improvements. As expected, the students who listed more ways to improve the class rated it higher!
• Furthermore, System 2 can reset the expectations of System 1 on the fly, so that an event that would normally be surprising is now almost normal. Suppose you are told that the three-year-old boy who lives next door frequently wears a top hat in his stroller. You will be far less surprised when you actually see him with his top hat than you would have been without the warning.
• “Because of the coincidence of two planes crashing last month, she now prefers to take the train. That’s silly. The risk hasn’t really changed; it is an availability bias.”
• Kunreuther also observed that protective actions, whether by individuals or governments, are usually designed to be adequate to the worst disaster actually experienced. As long ago as pharaonic Egypt, societies have tracked the high-water mark of rivers that periodically flood—and have always prepared accordingly, apparently assuming that floods will not rise higher than the existing high-water mark. Images of a worse disaster do not come easily to mind.
• They asked participants in their survey to siIs th t#consider pairs of causes of death: diabetes and asthma, or stroke and accidents. For each pair, the subjects indicated the more frequent cause and estimated the ratio of the two frequencies. The judgments were compared to health statistics of the time. Here’s a sample of their findings: Strokes cause almost twice as many deaths as all accidents combined, but 80% of respondents judged accidental death to be more likely. Tornadoes were seen as more frequent killers than asthma, although the latter cause 20 times more deaths. Death by lightning was judged less likely than death from botulism even though it is 52 times more frequent. Death by disease is 18 times as likely as accidental death, but the two were judged about equally likely. Death by accidents was judged to be more than 300 times more likely than death by diabetes, but the true ratio is 1:4. The lesson is clear: estimates of causes of death are warped by media coverage. The coverage is itself biased toward novelty and poignancy. The media do not just shape what the public is interested in, but also are shaped by it. Editors cannot ignore the public’s demands that certain topics and viewpoints receive extensive coverage. Unusual events (such as botulism) attract disproportionate attention and are consequently perceived as less unusual than they really are. The world in our heads is not a precise replica of reality; our expectations about the frequency of events are distorted by the prevalence and emotional intensity of the messages to which we are exposed.
• The affect heuristic is an instance of substitution, in which the answer to an easy question (How do I feel about it?) serves as an answer to a much harder question (What do I think about it?).
• The implication is clear: as the psychologist Jonathan Haidt said in another context, “The emotional tail wags the rational dog.” The affect heuristic simplifies our lives by creating a world that is much tidier than reality. Good technologies have few costs in the imaginary world we inhabit, bad technologies have no benefits, and all decisions are easy. In the real world, of course, we often face painful tradeoffs between benefits and costs.
• His view is that the existing system of regulation in the United States displays a very poor setting of priorities, which reflects reaction to public pressures more than careful objective analysis.
• The Alar tale illustrates a basic limitation in the ability of our mind to deal with small risks: we either ignore them altogether or give them far too much weight—nothing in between. Every parent who has stayed up waiting for a teenage daughter who is late from a party will recognize the feeling. You may know that there is really (almost) nothing to worry about, but you cannot help images of disaster from coming to mind. As Slovic has argued, the amount of concern is not adequately sensitive to the probability of harm; you are imagining the numerator—the tragic story you saw on the news—and not thinking about the denominator. Sunstein has coined the phrase “probability neglect” to describe the pattern. The combination of probability neglect with the social mechanisms of availability cascades inevitably leads to gross exaggeration of minor threats, sometimes with important consequences.
• In today’s world, terrorists are the most significant practitioners of the art of inducing availability cascades. With a few horrible exceptions such as 9/11, the number of casualties from terror attacks is very small relative to other causes of death. Even in countries that have been targets of intensive terror campaigns, such as Israel, the weekly number of casualties almost never came close to the number of traffic deaths. The difference is in the availability of the two risks, the ease and the frequency with which they come to mind. Gruesome images, endlessly repeated in the media, cause everyone to be on edge. As I know from experience, it is difficult to reason oneself into a state of complete calm. Terrorism speaks directly to System 1.
• I share Sunstein’s discomfort with the influence of irrational fears and availability cascades on public policy in the domain of risk. However, I also share Slovic’s belief that widespread fears, even if they are unreasonable, should not be ignored by policy makers. Rational or not, fear is painful and debilitating, and policy makers must endeavor to protect the public from fear, not only from real dangers.
• Tom W was the result of my efforts, and I completed the description in the early morning hours. The first person who showed up to work that morning was our colleague and friend Robyn Dawes, who was both a sophisticated statistician and a skeptic about the validity of intuitive judgment. If anyone would see the relevance of the base rate, it would have to be Robyn. I called Robyn over, gave him the question I had just typed, and asked him to guess Tom W’s profession. I still remember his sly smile as he said tentatively, “computer scientist?” That was a happy moment—even the mighty had fallen. Of course, Robyn immediately recognized his mistake as soon as I mentioned “base rate,” but he had not spontaneously thought of it. Although he knew as much as anyone about the role of base rates in prediction, he neglected them when presented with the description of an individual’s personality. As expected, he substituted a judgment of representativeness for the probability he was asked to assess. Amos and I then collected answers to the same question from 114 graduate students in psychology at three major universities, all of whom had taken several courses in statistics. They did not disappoint us. Their rankings of the nine fields by probability did not differ from ratings by similarity to the stereotype. Substitution was perfect in this case: there was no indication that the participants did anything else but judge representativeness. The question about probability (likelihood) was difficult, but the question about similarity was easier, and it was answered instead. This is a serious mistake, because judgments of similarity and probak tbility are not constrained by the same logical rules. It is entirely acceptable for judgments of similarity to be unaffected by base rates and also by the possibility that the description was inaccurate, but anyone who ignores base rates and the quality of evidence in probability assessments will certainly make mistakes.
• One sin of representativeness is an excessive willingness to predict the occurrence of unlikely (low base-rate) events. Here is an example: you see a person reading The New York Times on the New York subway. Which of the following is a better bet about the reading stranger? She has a PhD. She does not have a college degree. Representativeness would tell you to bet on the PhD, but this is not necessarily wise. You should seriously consider the second alternative, because many more nongraduates than PhDs ride in New York subways. And if you must guess whether a woman who is described as “a shy poetry lover” studies Chinese literature or business administration, you should opt for the latter option. Even if every female student of Chinese literature is shy and loves poetry, it is almost certain that there are more bashful poetry lovers in the much larger population of business students.
• You surely understand in principle that worthless information should not be treated differently from a complete lack of information, but WY SIATI makes it very difficult to apply that principle. Unless you decide immediately to reject evidence (for example, by determining that you received it from a liar), your System 1 will automatically process the information available as if it were true. There is one thing you can do when you have doubts about the quality of the evidence: let your judgments of probability stay close to the base rate. Don’t expect this exercise of discipline to be easy—it requires a significant effort of self-monitoring and self-control.
• “The lawn is well trimmed, the receptionist looks competent, and the furniture is attractive, but this doesn’t mean it is a well-managed company. I hope the board does not go by representativeness.”
• The word fallacy is used, in general, when people fail to apply a logical rule that is obviously relevant. Amos and I introduced the idea of a conjunction fallacy, which people commit when they judge a conjunction of two events (here, bank teller and feminist) to be more probable than one of the events (bank teller) in a direct comparison.
• If you visit a courtroom you will observe that lawyers apply two styles of criticism: to demolish a case they raise doubts about the strongest arguments that favor it; to discredit a witness, they focus on the weakest part of the testimony. The focus on weaknesses is also normal in politicaverl debates. I do not believe it is appropriate in scientific controversies, but I have come to accept as a fact of life that the norms of debate in the social sciences do not prohibit the political style of argument, especially when large issues are at stake—and the prevalence of bias in human judgment is a large issue.
• Statistical base rates are facts about a population to which a case belongs, but they are not relevant to the individual case. Causal base rates change your view of how the individual case came to be. The two types of base-rate information are treated differently: Statistical base rates are generally underweighted, and sometimes neglected altogether, when specific information about the case at hand is available. Causal base rates are treated as information about the individual case and are easily combined with other case-specific information. The causal version of the cab problem had the form of a stereotype: Green drivers are dangerous. Stereotypes are statements about the group that are (at least tentatively) accepted as facts about every member. Hely re are two examples: Most of the graduates of this inner-city school go to college. Interest in cycling is widespread in France. These statements are readily interpreted as setting up a propensity in individual members of the group, and they fit in a causal story. Many graduates of this particular inner-city school are eager and able to go to college, presumably because of some beneficial features of life in that school. There are forces in French culture and social life that cause many Frenchmen to take an interest in cycling. You will be reminded of these facts when you think about the likelihood that a particular graduate of the school will attend college, or when you wonder whether to bring up the Tour de France in a conversation with a Frenchman you just met.
• System 1 can deal with stories in which the elements are causally linked, but it is weak in statistical reasoning.
• In the words of Nisbett and Borgida, students “quietly exempt themselves” (and their friends and acquaintances) from the conclusions of experiments that surprise them.
• Subjects’ unwillingness to deduce the particular from the general was matched only by their willingness to infer the general from the particular.
• “We can’t assume that they will really learn anything from mere statistics. Let’s show them one or two representative individual cases to influence their System 1.”
• I happened to watch the men’s ski jump event in the Winter Olympics while Amos and I were writing an article about intuitive prediction. Each athlete has two jumps in the event, and the results are combined for the final score. I was startled to hear the sportscaster’s comments while athletes were preparing for their second jump: “Norway had a great first jump; he will be tense, hoping to protect his lead and will probably do worse” or “Sweden had a bad first jump and now he knows he has nothing to lose and will be relaxed, which should help him do better.” The commentator had obviously detected regression to the mean and had invented a causal story for which there was no evidence.
• “Perhaps his second interview was less impressive than the first because he was afraid of disappointing us, but more likely it was his first that was unusually good.”
• Each description consisted of five adjectives, as in the following example: intelligent, self-confident, well-read, hardworking, inquisitive We asked some participants to answer two questions: How much does this description impress you with respect to academic ability? What percentage of descriptions of freshmen do you believe would impress you more? The questions require you to evaluate the evidence by comparing the description to your norm for descriptions of students by counselors. The very existence of such a norm is remarkable. Although you surely do not know how you acquired it, you have a fairly clear sense of how much enthusiasm the description conveys: the counselor believes that this student is good, but not spectacularly good. There is room for stronger adjectives than intelligent (brilliant, creative), well-read (scholarly, erudite, impressively knowledgeable), and hardworking (passionate, perfectionist). The verdict: very likely to be in the top 15% but unlikely to be in the top 3%. There is impressive consensus in such judgments, at least within a culture.
• The biases we find in predictions that are expressed on a scale, such as GPA or the revenue of a firm, are similar to the biases observed in judging the probabilities of outcomes. The corrective procedures are also similar: Both contain a baseline prediction, which you would make if you knew nothing about the case at hand. In the categorical case, it was the base rate. In the numerical case, it is the average outcome in the relevant category. Both contain an intuitive prediction, which expresses the number that comes to your mind, whether it is a probability or a GPA. In both cases, you aim for a prediction that is intermediate between the baseline and your intuitive response. In the default case of no useful evidence, you stay with the baseline. At the other extreme, you also stay with your initial predictiononsр. This will happen, of course, only if you remain completely confident in your initial prediction after a critical review of the evidence that supports it. In most cases you will find some reason to doubt that the correlation between your intuitive judgment and the truth is perfect, and you will end up somewhere between the two poles.
• The search committee has narrowed down the choice to two candidates: Kim recently completed her graduate work. Her recommendations are spectacular and she gave a brilliant talk and impressed everyone in her interviews. She has no substantial track record of scientific productivity. Jane has held a postdoctoral position for the last three years. She has been very productive and her research record is excellent, but her talk and interviews were less sparkling than Kim’s. The intuitive choice favors Kim, because she left a stronger impression, and WYSIATI. But it is also the case that there is much less information about Kim than about Jane. We are back to the law of small numbers. In effect, you have a smaller sample of information from Kim than from Jane, and extreme outcomes are much more likely to be observed in small samples. There is more luck in the outcomes of small samples, and you should therefore regress your prediction more deeply toward the mean in your prediction of Kim’s future performance. When you allow for the fact that Kim is likely to regress more than Jane, you might end up selecting Jane although you were less impressed by her. In the context of academic choices, I would vote for Jane, but it would be a struggle to overcome my intuitive impression that Kim is more promising. Following our intuitions is more natural, and somehow more pleasant, than acting against them.
• The trader-philosopher-statistician Nassim Taleb could also be considered a psychologist. In The Black Swan, Taleb introduced the notion of a narrative fallacy to describe how flawed stories of the past shape our views of the world and our expectations for the future. Narrative fallacies arise inevitably from our continuous attempt to make sense of the world. The explanatory stories that people find compelling are simple; are concrete rather than abstract; assign a larger role to talent, stupidity, and intentions than to luck; and focus on a few striking events that happened rather than on the countless events that failed to happen. Any recent salient event is a candidate to become the kernel of a causal narrative. Taleb suggests that we humans constantly fool ourselves by constructing flimsy accounts of the past and believing they are true.
• After Nixon’s return from his travels, Fischh off and Beyth asked the same people to recall the probability that they had originally assigned to each of the fifteen possible outcomes. The results were clear. If an event had actually occurred, people exaggerated the probability that they had assigned to it earlier. If the possible event had not come to pass, the participants erroneously recalled that they had always considered it unlikely. Further experiments showed that people were driven to overstate the accuracy not only of their original predictions but also of those made by others.
• The tendency to revise the history of one’s beliefs in light of what actually happened produces a robust cognitive illusion. Hindsight bias has pernicious effects on the evaluations of decision makers. It leads observers to assess the quality of a decision not by whether the process was sound but by whether its outcome was good or bad. Consider a low-risk surgical intervention in which an unpredictable accident occurred that caused the patient’s death. The jury will be prone to believe, after the fact, that the operation was actually risky and that the doctor who ordered it should have known better. This outcome bias makes it almost impossible to evaluate a decision properly—in terms of the beliefs that were reasonable when the decision was made.
• The worse the consequence, the greater the hindsight bias. In the case of a catastrophe, such as 9/11, we are especially ready to believe that the officials who failed to anticipate it were negligent or blind. On July 10, 2001, the Central Intelligence Agency obtained information that al-Qaeda might be planning a major attack against the United States. George Tenet, director of the CIA, brought the information not to President George W. Bush but to National Security Adviser Condoleezza Rice. When the facts later emerged, Ben Bradlee, the legendary executive editor of The Washington Post, declared, “It seems to me elementary that if you’ve got the story that’s going to dominate history you might as well go right to the president.” But on July 10, no one knew—or could have known—that this tidbit of intelligence would turn out to dominate history. 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. As malpractice litigation became more common, physicians changed their procedures in multiple ways: ordered more tests, referred more cases to specialists, applied conventional treatments even when they were unlikely to help. These actions protected the physicians more than they benefited the patients, creating the potential for conflicts of interest.
• Leaders who have been lucky are never punished for having taken too much risk. Instead, they are believed to have had the flair and foresight to anticipate success, and the sensible people who doubted them are seen in hindsight as mediocre, timid, and weak. A few lucky gambles can crown a reckless leader with a halo of prescience and boldness.
• Indeed, the halo effect is so powerful that you probably find yourself resisting the idea that the same person and the same behaviors appear methodical when things are going well and rigid when things are going poorly. Because of the halo effect, we get the causal relationship backward: we are prone to believe that the firm fails because its CEO is rigid, when the truth is that the CEO appears to be rigid because the firm is failing. This is how illusions of understanding are born.
• “The mistake appears obvious, but it is just hindsight. You could not have known in advance.”
• “He’s learning too much from this success story, which is too tidy. He has fallen for a narrative fallacy.”
• “She has no evidence for saying that the firm is badly managed. All she knows is that its stock has gone down. This is an outcome bias, part hindsight and part halo effect.”
• “Let’s not fall for the outcome bias. This was a stupid decision even though it worked out well.”
• What happened was remarkable. The global evidence of our previous failure should have shaken our confidence in our judgments of the candidates, but it did not. It should also have caused us to moderate our predictions, but it did not. We knew as a general fact that our predictions were little better than random guesses, but we continued to feel and act as if each of our specific predictions was valid. I was reminded of the Müller-Lyer illusion, in which we know the lines are of equal length yet still see them as being different. I was so struck by the analogy that I coined a term for our experience: the illusion of validity. I had discovered my first cognitive illusion.
• Subjective confidence in a judgment is not a reasoned evaluation of the probability that this judgment is correct. Confidence is a feeling, which reflects the coherence of the information and the cognitive ease of processing it. It is wise to take admissions of uncertainty seriously, but declarations of high confidence mainly tell you that an individual has constructed a coherent story in his mind, not necessarily that the story is true.
• Many individual investors lose consistently by trading, an achievement that a dart-throwing chimp could not match.
• As I had discovered from watching cadets on the obstacle field, subjective confidence of traders is a feeling, not a judgment. Our understanding of cognitive ease and associative coherence locates subjective confidence firmly in System 1.
• And we cannot suppress the powerful intuition that what makes sense in hindsight today was predictable yesterday. The illusion that we understand the past fosters overconfidence in our ability to predict the future.
• Tetlock interviewed 284 people who made their living “commenting or offering advice on political and economic trends.” He asked them to assess the probabilities that certain events would occur in the not too distant future, both in areas of the world in which they specialized and in regions about which they had less knowledge. Would Gorbachev be ousted in a coup? Would the United States go to war in the Persian Gulf? Which country would become the next big emerging market? In all, Tetlock gathered more than 80,000 predictions. He also asked the experts how they reached their conclusions, how they reacted when proved wrong, and how they evaluated evidence that did not support their positions. Respondents were asked to rate the probabilities of three alternative outcomes in every case: the persistence of the status quo, more of something such as political freedom or economic growth, or less of that thing. The results were devastating. The experts performed worse than they would have if they had simply assigned equal probabilities to each of the three potential outcomes. In other words, people who spend their time, and earn their living, studying a particular topic produce poorer predictions than dart-throwing monkeys who would have distributed their choices evenly over the options. Even in the region they knew best, experts were not significantly better than nonspecialists. Those who know more forecast very slightly better than those who know less. But those with the most knowledge are often less reliable. The reason is that the person who acquires more knowledge develops an enhanced illusion of her skill and becomes unrealistically overconfident.
• “She has a coherent story that explains all she knows, and the coherence makes her feel good.”
• “She is a hedgehog. She has a theory that explains everything, and it gives her the illusion that she understands the world.”
• Several studies have shown that human decision makers are inferior to a prediction formula even when they are given the score suggested by the formula! They feel that they can overrule the formula because they have additional information about the case, but they are wrong more often than not.
• Another reason for the inferiority of expert judgment is that humans are incorrigibly inconsistent in making summary judgments of complex information. When asked to evaluate the same information twice, they frequently give different answers. The extent of the inconsistency is often a matter of real concern. Experienced radiologists who evaluate chest X-rays as “normal” or “abnormal” contradict themselves 20% of the time when they see the same picture on separate occasions.
• Unreliable judgments cannot be valid predictors of anything. The widespread inconsistency is probably due to the extreme context dependency of System 1. We know from studies of priming that unnoticed stimuli in our environment have a substantial influence on our thoughts and actions. These influences fluctuate from moment to moment. The brief pleasure of a cool breeze on a hot day may make you slightly more positive and optimistic about whatever you are evaluating at the time.
• In admission decisions for medical schools, for example, the final determination is often made by the faculty members who interview the candidate. The evidence is fragmentary, but there are solid grounds for a conjecture: conducting an interview is likely to diminish the accuracy of a selection procedure, if the interviewers also make the final admission decisions. Because interviewers are overconfident in their intuitions, they will assign too much weight to their personal impressions and too little weight to other sources of information, lowering validity.
• This is an attitude we can all recognize. When a human competes with a machine, whether it is John Henry a-hammerin’ on the mountain or the chess genius Garry Kasparov facing off against the computer Deep Blue, our sympathies lie with our fellow human. The aversion to algorithms making decisions that affect humans is rooted in the strong preference that many people have for the ormnatural over the synthetic or artificial. Asked whether they would rather eat an organic or a commercially grown apple, most people prefer the “all natural” one. Even after being informed that the two apples taste the same, have identical nutritional value, and are equally healthful, a majority still prefer the organic fruit. Even the producers of beer have found that they can increase sales by putting “All Natural” or “No Preservatives” on the label.
• In contrast, Meehl and other proponents of algorithms have argued strongly that it is unethical to rely on intuitive judgments for important decisions if an algorithm is available that will make fewer mistakes. Their rational argument is compelling, but it runs against a stubborn psychological reality: for most people, the cause of a mistake matters. The story of a child dying because an algorithm made a mistake is more poignant than the story of the same tragedy occurring as a result of human error, and the difference in emotional intensity is readily translated into a moral preference.
• “Whenever we can replace human judgment by a formula, we should at least consider it.”
• “He thinks his judgments are complex and subtle, but a simple combination of scores could probably do better.”
• The experts agreed that they knew the sculpture was a fake without knowing how they knew—the very definition of intuition.
• On many occasions, however, you may feel uneasy in a particular place or when someone uses a particular turn of phrase without having a conscious memory of the triggering event. In hindsight, you will label that unease an intuition if it is followed by a bad experience.
• Earlier I traced people’s confidence in a belief to two related impressions: cognitive ease and coherence. We are confident when the story we tell ourselves comes easily to mind, with no contradiction and no competing scenario. But ease and coherence do not guarantee that a belief held with confidence is true. The associative machine is set to suppress doubt and to evoke ideas and information that are compatible with the currently dominant story.
• It is wrong to blame anyone for failing to forecast accurately in an unpredictable world. However, it seems fair to blame professionals for believing they can succeed in an impossible task.
• The unrecognized limits of professional skill help explain why experts are often overconfident.
• You may want to forecast the commercial future of a company, for example, and believe that this is what you are judging, while in fact your evaluation is dominated by your impressions of the energy and competence of its current executives.
• “She is very confident in her decision, but subjective confidence is a poor index of the accuracy of a judgment.”
• 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 potential for mistakes and miscalculations. As a result, they pursue initiatives that are unlikely to come in on budget or on time or to deliver the expected returns—or even to be completed.
• “He’s taking an inside view. He should forget about his own case and look for what happened in other cases.”
• “She is the victim of a planning fallacy. She’s assuming a best-case scenario, but there are too many different ways for the plan to fail, and she cannot foresee them all.”
• Because optimistic bias can be both a blessing and a risk, you should be both happy and wary if you are temperamentally optimistic.
• When action is needed, optimism, even of the mildly delusional variety, may be a good thing.
• The social and economic pressures that favor overconfidence are not restricted to financial forecasting. Other professionals must deal with the fact that an expert worthy of the name is expected to display high confidence. Philip Tetlock observed that the most overconfident experts were the most likely to be invited to strut their stuff in news shows.
• “They have an illusion of control. They seriously underestimate the obstacles.”
• “We should conduct a premortem session. Someone may come up with a threat we have neglected.”
• A principle of diminishing sensitivity applies to both sensory dimensions and the evaluation of changes of wealth. Turning on a weak light has a large effect in a dark room. The same increment of light may be undetectable in a brightly illuminated room. Similarly, the subjective difference between $900 and $1,000 is much smaller than the difference between $100 and $200.
• The third principle is loss aversion. When directly compared or weighted against each other, losses loom larger than gains. This asymmetry between the power of positive and negative expectations or experiences has an evolutionary history. Organisms that treat threats as more urgent than opportunities have a better chance to survive and reproduce.
• the response to losses is stronger than the response to corresponding gains. This is loss aversion.
• In mixed gambles, where both a gain and a loss are possible, loss aversion causes extremely risk-averse choices.
• In bad choices, where a sure loss is compared to a larger loss that is merely probable, diminishing sensitivity causes risk seeking.
• Like a salary increase that has been promised informally, the high probability of winning the large sum sets up a tentative new reference point. Relative to your expectations, winning nothing will be experienced as a large loss.
• “He suffers from extreme loss aversion, which makes him turn down very favorable opportunities.”
• “Considering her vast wealth, her emotional response to trivial gains and losses makes no sense.”
• Richard Thaler found many examples of what he called the endowment effect, especially for goods that are not regularly traded. You can easily imagine yourself in a similar situation. Suppose you hold a ticket to a sold-out concert by a popular band, which you bought at the regular price of $200. You are an avid fan and would have been willing to pay up to $500 for the ticket. Now you have your ticket and you learn on the Internet that richer or more desperate fans are offering $3,000. Would you sell? If you resemble most of the audience at sold-out events you do not sell. Your lowest selling price is above $3,000 and your maximum buying price is $500. This is an example of an endowment effect, and a believer in standard economic theory would be puzzled by it.
• Loss aversion is built into the automatic evaluations of System 1.
• The fundamental ideas of prospect theory are that reference points exist, and that losses loom larger than corresponding gains.
• At a convention, List displayed a notice that invited people to take part in a short survey, for which they would be compensated with a small gift: a coffee mug or a chocolate bar of equal value. The gift s were assigned at random. As the volunteers were about to leave, List said to each of them, “We gave you a mug [or chocolate bar], but you can trade for a chocolate bar [or mug] instead, if you wish.” In an exact replication of Jack Knetsch’s earlier experiment, List found that only 18% of the inexperienced traders were willing to exchange their gift for the other. In sharp contrast, experienced traders showed no trace of an endowment effect: 48% of them traded!
• “These negotiations are going nowhere because both sides find it difficult to make concessions, even when they can get something in return. Losses loom larger than gains.”
• The psychologist Paul Rozin, an expert on disgust, observed that a single cockroach will completely wreck the appeal of a bowl of cherries, but a cherry will do nothing at all for a bowl of cockroaches. As he points out, the negative trumps the positive in many ways, and loss aversion is one of many manifestations of a broad negativity dominance.
• Loss aversion refers to the relative strength of two motives: we are driven more strongly to avoid losses than to achieve gains.
• Loss aversion creates an asymmetry that makes agreements difficult to reach. The concessions you make to me are my gains, but they are your losses; they cause you much more pain than they give me pleasure. Inevitably, you will place a higher value on them than I do. The same is true, of course, of the very painful concessions you demand from me, which you do not appear to value sufficiently! 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.
• “This reform will not pass. Those who stand to lose will fight harder than those who stand to gain.”
• “Each of them thinks the other’s concessions are less painful. They are both wrong, of course. It’s just the asymmetry of losses.”
• The assignment of weights is sometimes conscious and deliberate. Most often, however, you are just an observer to a global evaluation that your System 1 delivers.
• The conclusion is straightforward: the decision weights that people assign to outcomes are not identical to the probabilities of these outcomes, contrary to the expectation principle. Improbable outcomes are overweighted—this is the possibility effect. Outcomes that are almost certain are underweighted relative to actual certainty. The expectation principle, by which values are weighted by their probability, is poor psychology.
• You can see that the decision weights are identical to the corresponding probabilities at the extremes: both equal to 0 when the outcome is impossible, and both equal to 100 when the outcome is a sure thing. However, decision weights depart sharply from probabilities near these points. At the low end, we find the possibility effect: unlikely events are considerably overweighted. For example, the decision weight that corresponds to a 2% chance is 8.1. If people conformed to the axioms of rational choice, the decision weight would be 2—so the rare event is overweighted by a factor of 4. The certainty effect at the other end of the probability scale is even more striking. A 2% risk of not winning the prize reduces the utility of the gamble by 13%, from 100 to 87.1.
• “Tsunamis are very rare even in Japan, but the image is so vivid and compelling that tourists are bound to overestimate their probability.”
• An organization that could eliminate both excessive optimism and excessive loss aversion should do so.
• Two avid sports fans plan to travel 40 miles to see a basketball game. One of them paid for his ticket; the other was on his way to purchase a ticket when he got one free from a friend. A blizzard is announced for the night of the game. Which of the two ticket holders is more likely to brave the blizzard to see the game? The answer is immediate: we know that the fan who paid for his ticket is more likely to drive. Mental accounting provides the explanation. We assume that both fans set up an account for the game they hoped to see. Missing the game will close the accounts with a negative balance. Regardless of how they came by their ticket, both will be disappointed—but the closing balance is distinctly more negative for the one who bought a ticket and is now out of pocket as well as deprived of the game.
• The sunk-cost fallacy keeps people for too long in poor jobs, unhappy marriages, and unpromising research projects.
• Even life-or-death decisions can be affected. Imagine a physician with a gravely ill patient. One treatment fits the normal standard of care; another is unusual. The physician has some reason to believe that the unconventional treatment improves the patient’s chances, but the evidence is inconclusive. The physician who prescribes the unusual treatment faces a substantial risk of regret, blame, and perhaps litigation. In hindsight, it will be easier to imagine the normal choice; the abnormal choice will be easy to undo. True, a good outcome will contribute to the reputation of the physician who dared, but the potential benefit is smaller than the potential cost because success is generally a more normal outcome than is failure.
• The taboo tradeoff against accepting any increase in risk is not an efficient way to use the safety budget. In fact, the resistance may be motivated by a selfish fear of regret more than by a wish to optimize the child’s safety. The what-if? thought that occurs to any parent who deliberately makes such a trade is an image of the regret and shame he or she would feel in the event the pesticide caused harm.
• “We are hanging on to that stock just to avoid closing our mental account at a loss. It’s the disposition effect.”
• Theoretical beliefs are robust, and it takes much more than one embarrassing finding for established theories to be seriously questioned.
• The fact that logically equivalent statements evoke different reactions makes it impossible for Humans to be as reliably rational as Econs.
• The most “rational” subjects—those who were the least susceptible to framing effects—showed enhanced activity in a frontal area of the brain that is implicated in combining emotion and reasoning to guide decisions. Remarkably, the “rational” individuals were not those who showed the strongest neural evidence of conflict. It appears that these elite participants were (often, not always) reality-bound with little conflict.
• Most people find that their System 2 has no moral intuitions of its own to answer the question.
• Skeptics about rationality are not surprised. They are trained to be sensitive to the power of inconsequential factors as determinants of preference—my hope is that readers of this book have acquired this sensitivity.
• “Charge the loss to your mental account of ‘general revenue’—you will feel better!”
• “This is a bad case of duration neglect. You are giving the good and the bad part of your experience equal weight, although the good part lasted ten times as long as the other.”
• “He is desperately trying to protect the narrative of a life of integrity, which is endangered by the latest episode.”
• the decision to get married reflects, for many people, a massive error of affective forecasting. On their wedding day, the bride and the groom know that the rate of divorce is high and that the incidence of marital disappointment is even higher, but they do not believe that these statistics apply to them.
• We can infer from the speed with which people respond to questions about their life, and from the effects of current mood on their responses, that they do not engage in a careful examination when they evaluate their life. They must be using heuristics, which are examples of both substitution and WYSIATI.
• Daniel Gilbert and Timothy Wilson introduced the word miswanting to describe bad choices that arise from errors of affective forecasting. This word deserves to be in everyday language. The focusing illusion (which Gilbert and Wilson call focalism) is a rich source of miswanting. In particular, it makes us prone to exaggerate the effect of significant purchases or changed circumstances on our future well-being. Compare two commitments that will change some aspects of your life: buying a comfortable new car and joining a group that meets weekly, perhaps a poker or book club. Both experiences will be novel and exciting at the start. The crucial difference is that you will eventually pay little attention to the car as you drive it, but you will always attend to the social interaction to which you committed yourself. By WYSIATI, you are likely to exaggerate the long-term benefits of the car, but you are not likely to make the same mistake for a social gathering or for inherently attention-demanding activities such as playing tennis or learning to play the cello. The focusing illusion creates a bias in favor of goods and experiences that are initially exciting, even if they will eventually lose their appeal. Time is neglected, causing experiences that will retain their attention value in the long term to be appreciated less than they deserve to be.
• The mistake that people make in the focusing illusion involves attention to selected moments and neglect of what happens at other times. The mind is good with stories, but it does not appear to be well designed for the processing of time.
• “Buying a larger house may not make us happier in the long term. We could be suffering from a focusing illusion.”
• Rationality is logical coherence—reasonable or not.
• Econs are rational by this definition, but there is overwhelming evidence that Humans cannot be. An Econ would not be susceptible to priming, WYSIATI, narrow framing, the inside view, or preference reversals, which Humans cannot consistently avoid.
• The attentive System 2 is who we think we are. System 2 articulates judgments and makes choices, but it often endorses or rationalizes ideas and feelings that were generated by System 1. You may not know that you are optimistic about a project because something about its leader reminds you of your beloved sister, or that you dislike a person who looks vaguely like your dentist. If asked for an explanation, however, you will search your memory for presentable reasons and will certainly find some. Moreover, you will believe the story you make up. But System 2 is not merely an apologist for System 1; it also prevents many foolish thoughts and inappropriate impulses from overt expression.
• the heuristic answer is not necessarily simpler or more frugal than the original question—it is only more accessible, computed more quickly and easily. The heuristic answers are not random, and they are often approximately correct. And sometimes they are quite wrong.
• There is no simple way for System 2 to distinguish between a skilled and a heuristic response. Its only recourse is to slow down and attempt to construct an answer on its own, which it is reluctant to do because it is indolent. Many suggestions of System 1 are casually endorsed with minimal checking, as in the bat-and-ball problem. This is how System 1 acquires its bad reputation as the source of errors and biases. Its operative features, which include WYSIATI, intensity matching, and associative coherence, among others, give rise to predictable biases and to cognitive illusions such as anchoring, nonregressive predictions, overconfidence, and numerous others.
• The way to block errors that originate in System 1 is simple in principle: recognize the signs that you are in a cognitive minefield, slow down, and ask for reinforcement from System 2.
• Observers are less cognitively busy and more open to information than actors. That was my reason for writing a book that is oriented to critics and gossipers rather than to decision makers.
• Ultimately, a richer language is essential to the skill of constructive criticism. Much like medicine, the identification of judgment errors is a diagnostic task, which requires a precise vocabulary. The name of a disease is a hook to which all that is known about the disease is attached, including vulnerabilities, environmental factors, symptoms, prognosis, and care. Similarly, labels such as “anchoring effects,” “narrow framing,” or “excessive coherence” bring together in memory everything we know about a bias, its causes, its effects, and what can be done about it.

Memory Formation and Recall

• Add-3, which is much more difficult, is the most demanding that I ever observed. In the first 5 seconds, the pupil dilates by about 50% of its original area and heart rate increases by about 7 beats per minute. This is as hard as people can work—they give up if more is asked of them. When we exposed our subjects to more digits than they could remember, their pupils stopped dilating or actually shrank.
• As you can experience, the request to retrieve and say aloud your phone number or your spouse’s birthday also requires a brief but significant effort, because the entire string must be held in memory as a response is organized. Mental multiplication of two-digit numbers and the Add-3 task are near the limit of what most people can do.
• Intelligence is not only the ability to reason; it is also the ability to find relevant material in memory and to deploy attention when needed. Memory function is an attribute of System 1. However, everyone has the option of slowing down to conduct an active search of memory for all possibly relevant facts—just
• In the 1980s, psychologists discovered that exposure to a word causes immediate and measurable changes in the ease with which many related words can be evoked. If you have recently seen or heard the word EAT, you are temporarily more likely to complete the word fragment SO_P as SOUP than as SOAP. The opposite would happen, of course, if you had just seen WASH. We call this a priming effect and say that the idea of EAT primes the idea of SOUP, and that WASH primes SOAP.
• Another major advance in our understanding of memory was the discovery that priming is not restricted to concepts and words. You cannot know this from conscious experience, of course, but you must accept the alien idea that your actions and your emotions can be primed by events of which you are not even aware. In an experiment that became an instant classic, the psychologist John Bargh and his collaborators asked students at New York University—most aged eighteen to twenty-two—to assemble four-word sentences from a set of five words (for example, “finds he it yellow instantly”). For one group of students, half the scrambled sentences contained words associated with the elderly, such as Florida, forgetful, bald, gray, or wrinkle. When they had completed that task, the young participants were sent out to do another experiment in an office down the hall. That short walk was what the experiment was about. The researchers unobtrusively measured the time it took people to get from one end of the corridor to the other. As Bargh had predicted, the young people who had fashioned a sentence from words with an elderly theme walked down the hallway significantly more slowly than the others. The “Florida effect” involves two stages of priming. First, the set of words primes thoughts of old age, though the word old is never mentioned; second, these thoughts prime a behavior, walking slowly, which is associated with old age. All this happens without any awareness. When they were questioned afterward, none of the students reported noticing that the words had had a common theme, and they all insisted that nothing they did after the first experiment could have been influenced by the words they had encountered. The idea of old age had not come to their conscious awareness, but their actions had changed nevertheless.
• Under some conditions, passive expectations quickly turn active, as we found in another coincidence. On a Sunday evening some years ago, we were driving from New York City to Princeton, as we had been doing every week for a long time. We saw an unusual sight: a car on fire by the side of the road. When we reached the same stretch of road the following Sunday, another car was burning there. Here again, we found that we were distinctly less surprised on the second occasion than we had been on the first. This was now “the place where cars catch fire.” Because the circumstances of the recurrence were the same, the second incident was sufficient to create an active expectation: for months, perhaps for years, after the event we were reminded of burning cars whenever we reached that spot of the road and were quite prepared to see another one (but of course we never did).
• 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.
• Imagine yourself before a football game between two teams that have the same record of wins and losses. Now the game is over, and one team trashed the other. In your revised model of the world, the winning team is much stronger than the loser, and your view of the past as well as of the future has been altered be fрy that new perception. Learning from surprises is a reasonable thing to do, but it can have some dangerous consequences. A general limitation of the human mind is its imperfect ability to reconstruct past states of knowledge, or beliefs that have changed. Once you adopt a new view of the world (or of any part of it), you immediately lose much of your ability to recall what you used to believe before your mind changed.
• A moment can also gain importance by altering the experience of subsequent moments. For example, an hour spent practicing the violin may enhance the experience of many hours of playing or listening to music years later. Similarly, a brief awful event that causes PTSD should be weighted by the total duration of the long-term misery it causes. In the duration-weighted perspective, we can determine only after the fact that a moment is memorable or meaningful. The statements “I will always remember…” or “this is a meaningful moment” should be taken as promises or predictions, which can be false—and often are—even when uttered with complete sincerity. It is a good bet that many of the things we say we will always remember will be long forgotten ten years later.

Experience vs Remembering Self

• 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. How two selves within a single body can pursue happiness raises some difficult questions, both for individuals and for societies that view the well-being of the population as a policy objective.
• Accelerating beyond my strolling speed completely changes the experience of walking, because the transition to a faster walk brings about a sharp deterioration in my ability to think coherently. As I speed up, my attention is drawn with increasing frequency to the experience of walking and to the deliberate maintenance of the faster pace. My ability to bring a train of thought to a conclusion is impaired accordingly. At the highest speed I can sustain on the hills, about 14 minutes for a mile, I do not even try to think of anything else. In addition to the physical effort of moving my body rapidly along the path, a mental effort of self-control is needed to resist the urge to slow down. Self-control and deliberate thought apparently draw on the same limited budget of effort.
• Personal experiences, pictures, and vivid examples are more available than incidents that happened to others, or mere words, or statistics. A judicial error that affects you will undermine your faith in the justice system more than a similar incident you read about in a newspaper.
• Imagine yourself a subject in that experiment: First, list six instances in which you behaved assertively. Next, evaluate how assertive you are. Imagine that you had been asked for twelve instances of assertive behavior (a number most people find difficult). Would your view of your own assertiveness be different?
• This is a profoundly important conclusion. People who are taught surprising statistical facts about human behavior may be impressed to the point of telling their friends about what they have heard, but this does not mean that their understanding of the world has really changed. The test of learning psychology is whether your understanding of situations you encounter has changed, not whether you have learned a new fact.
• When the procedure was over, all participants were asked to rate “the total amount of pain” they had experienced during the procedure. The wording was intended to encourage them to think of the integral of the pain they had reported, reproducing the hedonimeter totals. Surprisingly, the patients did nothing of the kind. The statistical analysis revealed two findings, which illustrate a pattern we have observed in other experiments: Peak-end rule: The global retrospective rating was well predicted by the average of the level of pain reported at the worst moment of the experience and at its end. Duration neglect: The duration of the procedure had no effect whatsoever on the ratings of total pain.
• However, the findings of this experiment and others show that the retrospective assessments are insensitive to duration and weight two singular moments, the peak and the end, much more than others. So which should matter? What should the physician do? The choice has implications for medical practice. We noted that: If the objective is to reduce patients’ memory of pain, lowering the peak intensity of pain could be more important than minimizing the duration of the procedure. By the same reasoning, gradual relief may be preferable to abrupt relief if patients retain a better memory when the pain at the end of the procedure is relatively mild. If the objective is to reduce the amount of pain actually experienced, conducting the procedure swiftly may be appropriate even if doing so increases the peak pain intensity and leaves patients with an awful memory. Which of the two objectives did you find most compelling? I have not conducted a proper survey, but my impression is that a strong majority will come down in favor of reducing the memory of pain. I find it helpful to think of this dilemma as a conflict of interests between two selves (which do not correspond to the two familiar systems). The experiencing self is the one that answers the question: “Does it hurt now?” The remembering self is the one that answers the question: “How was it, on the whole?” Memories are all we get to keep from our experience of living, and the only perspective that we can adopt as we think about our lives is therefore that of the remembering self.
• To demonstrate the decision-making power of the remembering self, my colleagues and I designed an experiment, using a mild form of torture that I will call the cold-hand situation (its ugly technical name is cold-pressor). Participants are asked to hold their hand up to the wrist in painfully cold water until they are invited to remove it and are offered a warm towel. The subjects in our experiment used their free hand to control arrows on a keyboard to provide a continuous record of the pain they were enduring, a direct communication from their experiencing self. We chose a temperature that caused moderate but tolerable pain: the volunteer participants were of course free to remove their hand at any time, but none chose to do so. Each participant endured two cold-hand episodes: The short episode consisted of 60 seconds of immersion in water at 14° Celsius, which is experienced as painfully cold, but not intolerable. At the end of the 60 seconds, the experimenter instructed the participant to remove his hand from the water and offered a warm towel. The long episode lasted 90 seconds. Its first 60 seconds were identical to the short episode. The experimenter said nothing at all at the end of the 60 seconds. Instead he opened a valve that allowed slightly warmer water to flow into the tub. During the additional 30 seconds, the temperature of the water rose by roughly 1°, just enough for most subjects to detect a slight decrease in the intensity of pain. Our participants were told that they would have three cold-hand trials, but in fact they experienced only the short and the long episodes, each with a different hand. The trials were separated by seven minutes. Seven minutes after the second trial, the participants were given a choice about the third trial. They were told that one of their experiences would be repeated exactly, and were free to choose whether to repeat the experience they had had with their left hand or with their right hand. Of course, half the participants had the short trial with the left hand, half with the right; half had the short trial first, half began with the long, etc. This was a carefully controlled experiment. The experiment was designed to create a conflict between the interests of the experiencing and the remembering selves, and also between experienced utility and decision utility. From the perspective of the experiencing self, the long trial was obviously worse. We expected the remembering self to have another opinion. The peak-end rule predicts a worse memory for the short than for the long trial, and duration neglect predicts that the difference between 90 seconds and 60 seconds of pain will be ignored. We therefore predicted that the participants would have a more favorable (or less unfavorable) memory of the long trial and choose to repeat it. They did. Fully 80% of the participants who reported that their pain diminished during the final phase of the longer episode opted to repeat it, thereby declaring themselves willing to suffer 30 seconds of needless pain in the anticipated third trial. The subjects who preferred the long episode were not masochists and did not deliberately choose to expose themselves to the worse experience; they simply Jon the heigmade a mistake. If we had asked them, “Would you prefer a 90-second immersion or only the first part of it?” they would certainly have selected the short option. We did not use these words, however, and the subjects did what came naturally: they chose to repeat the episode of which they had the less aversive memory. The subjects knew quite well which of the two exposures was longer—we asked them—but they did not use that knowledge. Their decision was governed by a simple rule of intuitive choice: pick the option you like the most, or dislike the least. Rules of memory determined how much they disliked the two options, which in turn determined their choice. The cold-hand experiment, like my old injections puzzle, revealed a discrepancy between decision utility and experienced utility.
• Of course, evolution could have designed animals’ memory to store integrals, as it surely does in some cases. It is important for a squirrel to “know” the total amount of food it has stored, and a representation of the average size of the nuts would not be a good substitute. However, the integral of pain or pleasure over time may be less biologically significant. We know, for example, that rats show duration neglect for both pleasure and pain. In one experiment, rats were consistently exposed to a sequence in which the onset of a light signals that an electric shock will soon be delivered. The rats quickly learned to fear the light, and the intensity of their fear could be measured by several physiological responses. The main finding was that the duration of the shock has little or no effect on fear—all that matters is the painful intensity of the stimulus.
• Other classic studies showed that electrical stimulation of specific areas in the rat brain (and of corresponding areas in the human brain) produce a sensation of intense pleasure, so intense in some cases that rats who can stimulate their brain by pressing a lever will die of starvation without taking a break to feed themselves. Pleasurable electric stimulation can be delivered in bursts that vary in intensity and duration. Here again, only intensity matters. Up to a point, increasing the duration of a burst of stimulation does not appear to increase the eagerness of the animal to obtain it. The rules that govern the remembering self of humans have a long evolutionary history.
• We have strong preferences about the duration of our experiences of pain and pleasure. We want pain to be brief and pleasure to last. But our memory, a function of System 1, has evolved to represent the most intense moment of an episode of pain or pleasure (the peak) and the feelings when the episode was at its end. A memory that neglects duration will not serve our preference for long pleasure and short pains.
• “You are thinking of your failed marriage entirely from the perspective of the remembering self. A divorce is like a symphony with a screeching sound at the end—the fact that it ended badly does not mean it was all bad.”
• When we hear about the death of a woman who had been estranged from her daughter for many years, we want to know whether they were reconciled as death approached. We do not care only about the daughter’s feelings—it is the narrative of the mother’s life that we wish to improve. Caring for people often takes the form of concern for the quality of their stories, not for their feelings. Indeed, we can be deeply moved even by events that change the stories of people who are already dead. We feel pity for a man who died believing in his wife’s love for him, when we hear that she had a lover for many years and stayed with her husband only for his money. We pity the husband although he had lived a happy life. We feel the humiliation of a scientist who made an important discovery that was proved false after she died, although she did not experience the humiliation. Most important, of course, we all care intensely for the narrative of our own life and very much want it to be a good story, with a decent hero.
• The frenetic picture taking of many tourists suggests that storing memories is often an important goal, which shapes both the plans for the vacation and the experience of it. The photographer does not view the scene as a moment to be savored but as a future memory to be designed. Pictures may be useful to the remembering self—though we rarely look at them for very long, or as often as we expected, or even at all—but picture taking is not necessarily the best way for the tourist’s experiencing self to enjoy a view. In many cases we evaluate touristic vacations by the story and the memories that we expect to store. The word memorable is often used to describe vacation highlights, explicitly revealing the goal of the experience. In other situations—love comes to mind—the declaration that the present moment will never be forgotten, though not always accurate, changes the character of the moment.
• I am my remembering self, and the experiencing self, who does my living, is like a stranger to me.
• “You seem to be devoting your entire vacation to the construction of memories. Perhaps you should put away the camera and enjoy the moment, even if it is not very memorable?”
• “She is an Alzheimer’s patient. She no longer maintains a narrative of her life, but her experiencing self is still sensitive to beauty and gentleness.”
• “Beyond the satiation level of income, you can buy more pleasurable experiences, but you will lose some of your ability to enjoy the less expensive ones.”
• The possibility of conflicts between the remembering self and the interests of the experiencing self turned out to be a harder problem than I initially thought. In an early experiment, the cold-hand study, the combination of duration neglect and the peak-end rule led to choices that were manifestly absurd. Why would people willingly expose themselves to unnecessary pain? Our subjects left the choice to their remembering self, preferring to repeat the trial that left the better memory, although it involved more pain. Choosing by the quality of the memory may be justified in extreme cases, for example when post-traumatic stress is a possibility, but the cold-hand experience was not traumatic. An objective observer making the choice for someone else would undoubtedly choose the short exposure, favoring the sufferer’s experiencing self. The choices that people made on their own behalf are fairly described as mistakes. Duration neglect and the peak-end rule in the evaluation of stories, both at the opera and in judgments of Jen’s life, are equally indefensible. It does not make sense to evaluate an entire life by its last moments, or to give no weight to duration in deciding which life is more desirable.
• Duration neglect and the peak-end rule originate in System 1 and do not necessarily correspond to the values of System 2. We believe that duration is important, but our memory tells us it is not. The rules that govern the evaluation of the past are poor guides for decision making, because time does matter. The central fact of our existence is that time is the ultimate finite resource, but the remembering self ignores that reality. The neglect of duration combined with the peak-end rule causes a bias that favors a short period of intense joy over a long period of moderate happiness. The mirror image of the same bias makes us fear a short period of intense but tolerable suffering more than we fear a much longer period of moderate pain. Duration neglect also makes us prone to accept a long period of mild unpleasantness because the end will be better, and it favors giving up an opportunity for a long happy period if it is likely to have a poor ending. To drive the same idea to the point of discomfort, consider the common admonition, “Don’t do it, you will regret it.” The advice sounds wise because anticipated regret is the verdict of the remembering self and we are inclined to accept such judgments as final and conclusive. We should not forget, however, that the perspective of the remembering self is not always correct. An objective observer of the hedonimeter profile, with the interests of the experiencing self in mind, might well offer different advice. The remembering self’s neglect of duration, its exaggerated emphasis on peaks and ends, and its susceptibility to hindsight combine to yield distorted reflections of our actual experience.
• A theory of well-being that ignores what people want cannot be sustained. On the other hand, a theory that ignores what actually happens in people’s lives and focuses exclusively on what they think about their life is not tenable either. The remembering self and the experiencing self must both be considered, because their interests do not always coincide. Philosophers could struggle with these questions for a long time.

Statistical Thinking and Probability

• A recurrent theme of this book is that luck plays a large role in every story of success; it is almost always easy to identify a small change in the story that would have turned a remarkable achievement into a mediocre outcome. Our story was no exception.
• You have long known that the results of large samples deserve more trust than smaller samples, and even people who are innocent of statistical knowledge have heard about this law of large numbers.
• Unless you are a professional, however, you may not react very differently to a sample of 150 and to a sample of 3,000. That is the meaning of the statement that “people are not adequately sensitive to sample size.”
• Are the sequences equally likely? The intuitive answer—“of course not!”—is false. Because the events are independent and because the outcomes B and G are (approximately) equally likely, then any possible sequence of six births is as likely as any other. Even now that you know this conclusion is true, it remains counterintuitive, because only the third sequence appears random. As expected, BGBBGB is judged much more likely than the other two sequences. We are pattern seekers, believers in a coherent world, in which regularities (such as a sequence of six girls) appear not by accident but as a result of mechanical causality or of someone’s intention.
• A careful statistical analysis revealed that the distribution of hits was typical of a random process—and typical as well in evoking a strong impression that it was not random. “To the untrained eye,” Feller remarks, “randomness appears as regularity or tendency to cluster.”
• Many facts of the world are due to chance, including accidents of sampling. Causal explanations of chance events are inevitably wrong.
• “I won’t believe that the new trader is a genius before consulting a statistician who could estimate the likelihood of his streak being a chance event.”
• “The sample of observations is too small to make any inferences. Let’s not follow the law of small numbers.”
• Logicians and statisticians have developed competing definitions of probability, all very precise. For laypeople, however, probability (a synonym of likelihood in everyday language) is a vague notion, related to uncertainty, propensity, plausibility, and surprise. The vagueness is not particular to this concept, nor is it especially troublesome. We know, more or less, what we mean when we use a word such as democracy or beauty and the people we are talking to understand, more or less, what we intended to say.
• “This start-up looks as if it could not fail, but the base rate of success in the industry is extremely low. How do we know this case is different?”
• “They keep making the same mistake: predicting rare events from weak evidence. When the evidence is weak, one should stick with the base rates.”
• The uncritical substitution of plausibility for probability has pernicious effects on judgments when scenarios are used as tools of forecasting. Consider these two scenarios, which were presented to different groups, with a request to evaluate their probability: A massive flood somewhere in North America next year, in which more than 1,000 people drown An earthquake in California sometime next year, causing a flood in which more than 1,000 people drown The California earthquake scenario is more plausible than the North America scenario, although its probability is certainly smaller. As expected, probability judgments were higher for the richer and more entdetailed scenario, contrary to logic. This is a trap for forecasters and their clients: adding detail to scenarios makes them more persuasive, but less likely to come true. To appreciate the role of plausibility, consider the following questions: Which alternative is more probable? Mark has hair. Mark has blond hair. and Which alternative is more probable? Jane is a teacher. Jane is a teacher and walks to work. The two questions have the same logical structure as the Linda problem, but they cause no fallacy, because the more detailed outcome is only more detailed—it is not more plausible, or more coherent, or a better story. The evaluation of plausibility and coherence does not suggest and answer to the probability question. In the absence of a competing intuition, logic prevails.
• “They constructed a very complicated scenario and insisted on calling it highly probable. It is not—it is only a plausible story.”
• I had one of the most satisfying eureka experiences of my career while teaching flight instructors in the Israeli Air Force about the psychology of effective training. I was telling them about an important principle of skill training: rewards for improved performance work better than punishment of mistakes. This proposition is supported by much evidence from research on pigeons, rats, humans, and other animals. When I finished my enthusiastic speech, one of the most seasoned instructors in the group raised his hand and made a short speech of his own. He began by conceding that rewarding improved performance might be good for the birds, but he denied that it was optimal for flight cadets. This is what he said: “On many occasions I have praised flight cadets for clean execution of some aerobatic maneuver. The next time they try the same maneuver they usually do worse. On the other hand, I have often screamed into a cadet’s earphone for bad execution, and in general he does better t t ask yry abr two repon his next try. So please don’t tell us that reward works and punishment does not, because the opposite is the case.” This was a joyous moment of insight, when I saw in a new light a principle of statistics that I had been teaching for years. The instructor was right—but he was also completely wrong! 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 to the mean, which in that case was due to random fluctuations in the quality of performance. Naturally, he praised only a cadet whose performance was far better than average. But the cadet was probably just lucky on that particular attempt and therefore likely to deteriorate regardless of whether or not he was praised. Similarly, the instructor would shout into a cadet’s earphones only when the cadet’s performance was unusually bad and therefore likely to improve regardless of what the instructor did. The instructor had attached a causal interpretation to the inevitable fluctuations of a random process.
• The more extreme the original score, the more regression we expect, because an extremely good score suggests a very lucky day. The regressive prediction is reasonable, but its accuracy is not guaranteed.
• My most optimistic guess is about 30%. Assuming this estimate, we have all we need to produce an unbiased prediction. Here are the directions for how to get there in four simple steps: Start with an estimate of average GPA. Determine the GPA that matches your impression of the evidence. Estimate the correlation between your evidence and GPA. If the correlation is .30, move 30% of the distance from the average to the matching GPA. Step 1 gets you the baseline, the GPA you would have predicted if you were told nothing about Julie beyond the fact that she is a graduating senior. In the absence of information, you would have predicted the average. (This is similar to assigning the base-rate probability of business administration grahavрduates when you are told nothing about Tom W.) Step 2 is your intuitive prediction, which matches your evaluation of the evidence. Step 3 moves you from the baseline toward your intuition, but the distance you are allowed to move depends on your estimate of the correlation. You end up, at step 4, with a prediction that is influenced by your intuition but is far more moderate. This approach to prediction is general. You can apply it whenever you need to predict a quantitative variable, such as GPA, profit from an investment, or the growth of a company. The approach builds on your intuition, but it moderates it, regresses it toward the mean. When you have good reasons to trust the accuracy of your intuitive prediction—a strong correlation between the evidence and the prediction—the adjustment will be small.
• “Our intuitive prediction is very favorable, but it is probably too high. Let’s take into account the strength of our evidence and regress the prediction toward the mean.”
• In a well-ordered and predictable world, the correlation would be perfect (1), and the stronger CEO would be found to lead the more successful firm in 100% of the pairs. If the relative success of similar firms was determined entirely by factors that the CEO does not control (call them luck, if you wish), you would find the more successful firm led by the weaker CEO 50% of the time. A correlation of .30 implies that you would find the stronger CEO leading the stronger firm in about 60% of the pairs—an improvement of a mere 10 percentage points over random guessing, hardly grist for the hero worship of CEOs we so often witness.
• In the presence of randomness, regular patterns can only be mirages.
• Although professionals are able to extract a considerable amount of wealth from amateurs, few stock pickers, if any, have the skill needed to beat the market consistently, year after year. Professional investors, including fund managers, fail a basic test of skill: persistent achievement. The diagnostic for the existence of any skill is the consistency of individual differences in achievement. The logic is simple: if individual differences in any one year are due entirely to luck, the ranking of investors and funds will vary erratically and the year-to-year correlation will be zero. Where there is skill, however, the rankings will be more stable. The persistence of individual differences is the measure by which we confirm the existence of skill among golfers, car salespeople, orthodontists, or speedy toll collectors on the turnpike.
• Typically at least two out of every three mutual funds underperform the overall market in any given year.
• Some years ago I had an unusual opportunity to examine the illusion of financial skill up close. I had been invited to speak to a group of investment advisers in a firm that provided financial advice and other services to very wealthy clients. I asked for some data to prepare my presentation and was granted a small treasure: a spreadsheet summarizing the investment outcomes of some twenty-five anonymous wealth advisers, for each of eight consecutive years. Each adviser’s scoof ဆre for each year was his (most of them were men) main determinant of his year-end bonus. It was a simple matter to rank the advisers by their performance in each year and to determine whether there were persistent differences in skill among them and whether the same advisers consistently achieved better returns for their clients year after year. To answer the question, I computed correlation coefficients between the rankings in each pair of years: year 1 with year 2, year 1 with year 3, and so on up through year 7 with year 8. That yielded 28 correlation coefficients, one for each pair of years. I knew the theory and was prepared to find weak evidence of persistence of skill. Still, I was surprised to find that the average of the 28 correlations was .01. In other words, zero. The consistent correlations that would indicate differences in skill were not to be found. The results resembled what you would expect from a dice-rolling contest, not a game of skill.
• The next morning, we reported the findings to the advisers, and their response was equally bland. Their own experience of exercising careful judgment on complex problems was far more compelling to them than an obscure statistical fact. When we were done, one of the executives I had dined with the previous evening drove me to the airport. He told me, with a trace of defensiveness, “I have done very well for the firm and no one can take that away from me.” I smiled and said nothing. But I thought, “Well, I took it away from you this morning. If your success was due mostly to chance, how much credit are you entitled to take for it?”
• The main point of this chapter is not that people who attempt to predict the future make many errors; that goes without saying. The first lesson is that errors of prediction are inevitable because the world is unpredictable.
• Remove one highly assertive member from a group of eight candidates and everyone else’s personalities will appear to change. Let a sniper’s bullet move by a few centimeters and the performance of an officer will be transformed. I do not deny the validity of all tests—if a test predicts an important outcome with a validity of .20 or .30, the test should be used. But you should not expect more. You should expect little or nothing from Wall Street stock pickers who hope to be more accurate than the market in predicting the future of prices. And you should not expect much from pundits making long-term forecasts—although they may have valuable insights into the near future. The line that separates the possibly predictable future from the unpredictable distant future is inဆ yet to be drawn.
• The important conclusion from this research is that an algorithm that is constructed on the back of an envelope is often good enough to compete with an optimally weighted formula, and certainly good enough to outdo expert judgment. This logic can be applied in many domains, ranging from the selection of stocks by portfolio managers to the choices of medical treatments by doctors or patients.
• “Does he really believe that the environment of start-ups is sufficiently regular to justify an intuition that goes against the base rates?”
• There are many ways for any plan to fail, and although most of them are too improbable to be anticipated, the likelihood that something will go wrong in a big project is high.
• The prevalent tendency to underweight or ignore distributional information is perhaps the major source of error in forecasting. Planners should therefore make every effort to frame the forecasting problem so as to facilitate utilizing all the distributional information that is available.
• Possibility and certainty have similarly powerful effects in the domain of losses. When a loved one is wheeled into surgery, a 5% risk that an amputation will be necessary is very bad—much more than half as bad as a 10% risk.
• A cancer risk of 0.001% is not easily distinguished from a risk of 0.00001%, although the former would translate to 3,000 cancers for the population of the United States, and the latter to 30.
• “He is tempted to settle this frivolous claim to avoid a freak loss, however unlikely. That’s overweighting of small probabilities. Since he is likely to face many similar problems, he would be better off not yielding.”
• “They know the risk of a gas explosion is minuscule, but they want it mitigated. It’s a possibility effect, and they want peace of mind.”
• The thrilling possibility of winning the big prize is shared by the community and reinforced by conversations at work and at home. Buying a ticket is immediately rewarded by pleasant fantasies, just as avoiding a bus was immediately rewarded by relief from fear. In both cases, the actual probability is inconsequential; only possibility matters. The original formulation of prospect theory included the argument that “highly unlikely events are either ignored or overweighted,” but it did not specify the conditions under which one or the other will occur, nor did it propose a psychological interpretation of it.
• When it comes to rare probabilities, our mind is not designed to get things quite right. For the residents of a planet that may be exposed to events no one has yet experienced, this is not good news.
• “They want people to be worried by the risk. That’s why they describe it as 1 death per 1,000. They’re counting on denominator neglect.”

Economic Decision Making

• We see the same strategy at work in the negotiation over the price of a home, when the seller makes the first move by setting the list price. As in many other games, moving first is an advantage in single-issue negotiations—for example, when price is the only issue to be settled between a buyer and a seller. As you may have experienced when negotiating for the first time in a bazaar, the initial anchor has a powerful effect. My advice to students when I taught negotiations was that if you think the other side has made an outrageous proposal, you should not come back with an equally outrageous counteroffer, creating a gap that will be difficult to bridge in further negotiations. Instead you should make a scene, storm out or threaten to do so, and make it clear—to yourself as well as to the other side—that you will not continue the negotiation with that number on the table.
• The objections to the principle of moderating intuitive predictions must be taken seriously, because absence of bias is not always what matters most. A preference for unbiased predictions is justified if all errors of prediction are treated alike, regardless of their direction. But there are situations in which one type of error is much worse than another. When a venture capitalist looks for “the next big thing,” the risk of missing the next Google or Facebook is far more important than the risk of making a modest investment in a start-up that ultimately fails. The goal of venture capitalists is to call the extreme cases correctly, even at the cost of overestimating the prospects of many other ventures. For a conservative banker making large loans, the risk of a single borrower going bankrupt may outweigh the risk of turning down several would-be clients who would fulfill their obligations. In such cases, the use of extreme language (“very good prospect,” “serious risk of default”) may have some justification for the comfort it provides, even if the information on which these judgments are based is of only modest validity.
• That was odd: What made one person buy and the other sell? What did the sellers think they knew that the buyers did not? Since then, my questions about the stock market have hardened into a larger puzzle: a major industry appears to be built largely on an illusion of skill. Billions of shares are traded every day, with many people buying each stock and others selling it to them. It is not unusual for more than 100 million shares of a single stock to change hands in one day. Most of the buyers and sellers know that they have the same information; they exchange the stocks primarily because they have different opinions. The buyers think the price is too low and likely to rise, while the sellers think the price is high and likely to drop. The puzzle is why buyers and sellers alike think that the current price is wrong. What makes them believe they know more about what the price should be than the market does? For most of them, that belief is an illusion.
• on average, the most active traders had the poorest results, while the investors who traded the least earned the highest returns.
• The authors write, “We find that firms with award-winning CEOs subsequently underperform, in terms both of stock and of operating performance. At the same time, CEO compensation increases, CEOs spend more time on activities outside the company such as writing books and sitting on outside boards, and they are more likely to engage in earnings management.”
• Bernoulli was right, of course: we normally speak of changes of income in terms of percentages, as when we say “she got a 30% raise.” The idea is that a 30% raise may evoke a fairly similar psychological response for the rich and for the poor, which an increase of $100 will not do. As in Fechner’s law, the psychological response to a change of wealth is inversely proportional to the initial amount of wealth, leading to the conclusion that utility is a logarithmic function of wealth. If this function is accurate, the same psychological distance separates $100,000 from $1 million, and $10 million from $100 million.
• Prior to Bernoulli, mathematicians had assumed that gambles are assessed by their expected value: a weighted average of the possible outcomes, where each outcome is weighted by its probability. For example, the expected value of: 80% chance to win $100 and 20% chance to win $10 is $82 (0.8 × 100 + 0.2 × 10). Now ask yourself this question: Which would you prefer to receive as a gift, this gamble or $80 for sure? Almost everyone prefers the sure thing. If people valued uncertain prospects by their expected value, they would prefer the gamble, because $82 is more than $80. Bernoulli pointed out that people do not in fact evaluate gambles in this way. Bernoulli observed that most people dislike risk (the chance of receiving the lowest possible outcome), and if they are offered a choice between a gamble and an amount equal to its expected value they will pick the sure thing. In fact a risk-averse decision maker will choose a sure thing that is less than expected value, in effect paying a premium to avoid the uncertainty.
• “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.”
• You know something about your preferences that utility theorists do not—that your attitudes to risk would not be different if your net worth were higher or lower by a few thousand dollars (unless you are abjectly poor). And you also know that your attitudes to gains and losses are not derived from your evaluation of your wealth. The reason you like the idea of gaining $100 and dislike the idea of losing $100 is not that these amounts change your wealth. You just like winning and dislike losing—and you almost certainly dislike losing more than you like winning.
• Outcomes that are better than the reference points are gains. Below the reference point they are losses.
• Evidence from brain imaging confirms the difference. Selling goods that one would normally use activates regions of the brain that are associated with disgust and pain.
• The experimental economist John List, who has studied trading at baseball card conventions, found that novice traders were reluctant to part with the cards they owned, but that this reluctance eventually disappeared with trading experience.
• “They would find it easier to renegotiate the agreement if they realized the pie was actually expanding. They’re not allocating losses; they are allocating gains.”
• “My clients don’t resent the price hike because they know my costs have gone up, too. They accept my right to stay profitable.”
• When you take the long view of many similar decisions, you can see that paying a premium to avoid a small risk of a large loss is costly.
• I sympathize with your aversion to losing any gamble, but it is costing you a lot of money. Please consider this question: Are you on your deathbed? Is this the last offer of a small favorable gamble that you will ever consider? Of course, you are unlikely to be offered exactly this gamble again, but you will have many opportunities to consider attractive gambles with stakes that are very small relative to your wealth. You will do yourself a large financial favor if you are able to see each of these gambles as part of a bundle of small gambles and rehearse the mantra that will get you significantly closer to economic rationality: you win a few, you lose a few. The main purpose of the mantra is to control your emotional response when you do lose. If you can trust it to be effective, you should remind yourself of it when deciding whether or not to accept a small risk with positive expected value.
• Familiar examples of risk policies are “always take the highest possible deductible when purchasing insurance” and “never buy extended warranties.” A risk policy is a broad frame. In the insurance examples, you expect the occasional loss of the entire deductible, or the occasional failure of an uninsured product.
• Except for the very poor, for whom income coincides with survival, the main motivators of money-seeking are not necessarily economic. For the billionaire looking for the extra billion, and indeed for the participant in an experimental economics project looking for the extra dollar, money is a proxy for points on a scale of self-regard and achievement.
• “He has separate mental accounts for cash and credit purchases. I constantly remind him that money is money.”
• Of course, the two concepts of utility will coincide if people want what they will enjoy, and enjoy what they chose for themselves—and this assumption of coincidence is implicit in the general idea that economic agents are rational. Rational agents are expected to know their tastes, both present and future, and they are supposed to make good decisions that will maximize these interests.
• In everyday speech, we call people reasonable if it is possible to reason with them, if their beliefs are generally in tune with reality, and if their preferences are in line with their interests and their values. The word rational conveys an image of greater deliberation, more calculation, and less warmth, but in common language a rational person is certainly reasonable. For economists and decision theorists, the adjective has an altogether different meaning. The only test of rationality is not whether a person’s beliefs and preferences are reasonable, but whether they are internally consistent.
• A famous example of the Chicago approach is titled A Theory of Rational Addiction; it explains how a rational agent with a strong preference for intense and immediate gratification may make the rational decision to accept future addiction as a consequence.
• Humans, more than Econs, also need protection from others who deliberately exploit their weaknesses—and especially the quirks of System 1 and the laziness of System 2. Rational agents are assumed to make important decisions carefully, and to use all the information that is provided to them.

Professional Expertise Development

• We have all heard such stories of expert intuition: the chess master who walks past a street game and announces “White mates in three” without stopping, or the physician who makes a complex diagnosis after a single glance at a patient. Expert intuition strikes us as magical, but it is not. Indeed, each of us performs feats of intuitive expertise many times each day. Most of us are pitch-perfect in detecting anger in the first word of a telephone call, recognize as we enter a room that we were the subject of the conversation, and quickly react to subtle signs that the driver of the car in the next lane is dangerous.
• You can feel Simon’s impatience with the mythologizing of expert intuition when he writes: “The situation has provided a cue; this cue has given the expert access to information stored in memory, and the information provides the answer. Intuition is nothing more and nothing less than recognition.”
• As you become skilled in a task, its demand for energy diminishes. Studies of the brain have shown that the pattern of activity associated with an action changes as skill increases, with fewer brain regions involved. Talent has similar effects. Highly intelligent individuals need less effort to solve the same problems, as indicated by both pupil size and brain activity.
• Modern tests of working memory require the individual to switch repeatedly between two demanding tasks, retaining the results of one operation while performing the other. People who do well on these tests tend to do well on tests of general intelligence. However, the ability to control attention is not simply a measure of intelligence; measures of efficiency in the control of attention predict performance of air traffic controllers and of Israeli Air Force pilots beyond the effects of intelligence.
• To derive the most useful information from multiple sources of evidence, you should always try to make these sources independent of each other. This rule is part of good police procedure. When there are multiple witnesses to an event, they are not allowed to discuss it before giving their testimony. The goal is not only to prevent collusion by hostile witnesses, it is also to prevent unbiased witnesses from influencing each other. Witnesses who exchange their experiences will tend to make similar errors in their testimony, reducing the total value of the information they provide. Eliminating redundancy from your sources of information is always a good idea.
• an important principle of skill training: rewards for improved performance work better than punishment of mistakes. This proposition is supported by much evidence from research on pigeons, rats, humans, and other animals.
• “The question is not whether these experts are well trained. It is whether their world is predictable.”
• learned from this finding a lesson that I have never forgotten: 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. I set a formula that gave the “close your eyes” evaluation the same weight as the sum of the six trait ratings. A more general lesson that I learned from this episode was do not simply trust intuitive judgment—your own or that of others—but do not dismiss it, either.
• 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 a good number. The traits you choose should be as independent as possible from each other, and you should feel that you can assess them reliably by asking a few factual questions. Next, make a list of those questions for each trait and think about how you will score it, say on a 1–5 scale. You should have an idea of what you will caleigl “very weak” or “very strong.” These preparations should take you half an hour or so, a small investment that can make a significant difference in the quality of the people you hire. To avoid halo effects, you must collect the information on one trait at a time, scoring each before you move on to the next one. Do not skip around. To evaluate each candidate, add up the six scores. Because you are in charge of the final decision, you should not do a “close your eyes.” Firmly resolve that you will hire the candidate whose final score is the highest, even if there is another one whom you like better—try to resist your wish to invent broken legs to change the ranking. A vast amount of research offers a promise: you are much more likely to find the best candidate if you use this procedure than if you do what people normally do in such situations, which is to go into the interview unprepared and to make choices by an overall intuitive judgment such as “I looked into his eyes and liked what I saw.”
• “The situation has provided a cue; this cue has given the expert access to information stored in memory, and the information provides the answer. Intuition is nothing more and nothing less than recognition.”
• Chess is a good example. An expert player can understand a complex position at a glance, but it takes years to develop that level of ability. Studies of chess masters have shown that at least 10,000 hours of dedicated practice (about 6 years of playing chess 5 hours a day) are required to attain the highest levels of performance. During those hours of intense concentration, a serious chess player becomes familiar with thousands of configurations, each consisting of an arrangement of related pieces that can threaten or defend each other.
• Psychotherapists have many opportunities to observe the immediate reactions of patients to what they say. The feedback enables them to develop the intuitive skill to find the words and the tone that will calm anger, forge confidence, or focus the patient’s attention. On the other hand, therapists do not have a chance to identify which general treatment approach is most suitable for different patients. The feedback they receive from their patients’ long-term outcomes is sparse, delayed, or (usually) nonexistent, and in any case too ambiguous to support learning from experience.
• You may be asking, Why didn’t Gary Klein and I come up immediately with the idea of evaluating an expert’s intuition by assessing the regularity of the environment and the expert’s learning history—mostly setting aside the expert’s confidence? And what did we think the answer could be? These are good questions because the contours of the solution were apparent from the beginning. We knew at the outset that fireground commanders and pediatric nurses would end up on one side of the boundary of valid intuitions and that the specialties studied by Meehl would be on the other, along with stock pickers and pundits. It is difficult to reconstruct what it was that took us years, long hours of discussion, endless exchanges of draft s and hundreds of e-mails negotiating over words, and more than once almost giving up. But this is what always happens when a project ends reasonably well: once you understand the main conclusion, it seems it was always obvious.
• Here again, expert overconfidence is encouraged by their clients: “Generally, it is considered a weakness and a sign of vulnerability for clinicians to appear unsure. Confidence is valued over uncertainty and there is a prevailing censure against disclosing uncertainty to patients.” Experts who acknowledge the full extent of their ignorance may expect to be replaced by more confident competitors, who are better able to gain the trust of clients. An unbiased appreciation of uncertainty is a cornerstone of rationality—but it is not what people and organizations want.
• You know you have made a theoretical advance when you can no longer reconstruct why you failed for so long to see the obvious.

Happiness and Life Satisfaction

• The psychologist Mihaly Csikszentmihalyi (pronounced six-cent-mihaly) has done more than anyone else to study this state of effortless attending, and the name he proposed for it, flow, has become part of the language. People who experience flow describe it as “a state of effortless concentration so deep that they lose their sense of time, of themselves, of their problems,” and their descriptions of the joy of that state are so compelling that Csikszentmihalyi has called it an “optimal experience.” Many activities can induce a sense of flow, from painting to racing motorcycles—and for some fortunate authors I know, even writing a book is often an optimal experience.
• 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.
• A few years ago, John Brockman, who edits the online magazine Edge, asked a number of scientists to report their “favorite equation.” These were my offerings: success = talent + luck great success = a little more talent + a lot of luck
• Our emotional state is largely determined by what we attend to, and we are normally focused on our current activity and immediate environment. There are exceptions, where the quality of subjective experience is dominated by recurrent thoughts rather than by the events of the moment. When happily in love, we may feel joy even when caught in traffic, and if grieving, we may remain depressed when watching a funny movie. In normal circumstances, however, we draw pleasure and pain from what is happening at the moment, if we attend to it. To get pleasure from eating, for example, you must notice that you are doing it. We found that French and American women spent about the same amount of time eating, but for Frenchwomen, eating was twice as likely to be focal as it was for American women. The Americans were far more prone to combine eating with other activities, and their pleasure from eating was correspondingly diluted.
• Not surprisingly, a headache will make a person miserable, and the second best predictor of the feelings of a day is whether a person did or did not have contacts with friends or relatives. It is only a slight exaggeration to say that happiness is the experience of spending time with people you love and who love you.
• Some aspects of life have more effect on the evaluation of one’s life than on the experience of living. Educational attainment is an example. More education is associated with higher evaluation of one’s life, but not with greater experienced well-being. Indeed, at least in the United States, the more educated tend to report higher stress. On the other hand, ill health has a much stronger adverse effect on experienced well-being than on life evaluation. Living with children also imposes a significant cost in the currency of daily feelings—reports of stress and anger are common among parents, but the adverse effects on life evaluation are smaller. Religious participation also has relatively greater favorable impact on both positive affect and stress reduction than on life evaluation.
• Can money buy happiness? The conclusion is that being poor makes one miserable, and that being rich may enhance one’s life satisfaction, but does not (on average) improve experienced well-being. Severe poverty amplifies the experienced effects of other misfortunes of life. In particular, illness is much worse for the very poor than for those who are more comfortable. A headache increases the proportion reporting sadness and worry from 19% to 38% for individuals in the top two-thirds of the income distribution. The corresponding numbers for the poorest tenth are 38% and 70%—a higher baseline level and a much larger increase. Significant differences between the very poor and others are also found for the effects of divorce and loneliness. Furthermore, the beneficial effects of the weekend on experienced well-being are significantly smaller for the very poor than for most everyone else.
• “The objective of policy should be to reduce human suffering. We aim for a lower U-index in society. Dealing with depression and extreme poverty should be a priority.”
• “The easiest way to increase happiness is to control your use of time. Can you find more time to do the things you enjoy doing?”
• Experienced well-being is on average unaffected by marriage, not because marriage makes no difference to happiness but because it changes some aspects of life for the better and others for the worse.
• During the last ten years we have learned many new facts about happiness. But we have also learned that the word happiness does not have a simple meaning and should not be used as if it does. Sometimes scientific progress leaves us more puzzled than we were before.
• “She looks quite cheerful most of the time, but when she is asked she says she is very unhappy. The question must make her think of her recent divorce.”

Social and Environmental Influences

• Everyone has some awareness of the limited capacity of attention, and our social behavior makes allowances for these limitations. When the driver of a car is overtaking a truck on a narrow road, for example, adult passengers quite sensibly stop talking. They know that distracting the driver is not a good idea, and they also suspect that he is temporarily deaf and will not hear what they say.
• The general theme of these findings is that the idea of money primes individualism: a reluctance to be involved with others, to depend on others, or to accept demands from others. The psychologist who has done this remarkable research, Kathleen Vohs, has been laudably restrained in discussing the implications of her findings, leaving the task to her readers. Her experiments are profound—her findings suggest that living in a culture that surrounds us with reminders of money may shape our behavior and our attitudes in ways that we do not know about and of which we may not be proud.
• The consequences of repeated exposures benefit the organism in its relations to the immediate animate and inanimate environment. They allow the organism to distinguish objects and habitats that are safe from those that are not, and they are the most primitive basis of social attachments. Therefore, they form the basis for social organization and cohesion—the basic sources of psychological and social stability.
• We are able to communicate with each other because our knowledge of the world and our use of words are largely shared. When I mention a table, without specifying further, you understand that I mean a normal table. You know with certainty that its surface is approximately level and that it has far fewer than 25 legs. We have norms for a vast number of categories, and these norms provide the background for the immediate detection of anomalies such as pregnant men and tattooed aristocrats.
• Earlier I discussed the bewildering variety of priming effects, in which your thoughts and behavior may be influenced by stimuli to which you pay no attention at all, and even by stimuli of which you are completely unaware. The main moral of priming research is that our thoughts and our behavior are influenced, much more than we know or want, by the environment of the moment. Many people find the priming results unbelievable, because they do not correspond to subjective experience. Many others find the results upsetting, because they threaten the subjective sense of agency and autonomy.
• An availability cascade is a self-sustaining chain of events, which may start from media reports of a relatively minor event and lead up to public panic and large-scale government action. On some occasions, a media story about a risk catches the attention of a segment of the public, which becomes aroused and worried. This emotional reaction becomes a story in itself, prompting additional coverage in the media, which in turn produces greater concern and involvement. The cycle is sometimes sped along deliberately by “availability entrepreneurs,” individuals or organizations who work to ensure a continuous flow of worrying news. The danger is increasingly exaggerated as the media compete for attention-grabbing headlines. Scientists and others who try to dampen the increasing fear and revulsion attract little attention, most of it hostile: anyone who claims that the danger is overstated is suspected of association with a “heinous cover-up.” The issue becomes politically important because it is on everyone’s mind, and the response of the political system is guided by the intensity of public sentiment. The availability cascade has now reset priorities. Other risks, and other ways that resources could be applied for the public good, all have faded into the background.
• The social norm against stereotyping, including the opposition to profiling, has been highly beneficial in creating a more civilized and more equal society. It is useful to remember, however, that neglecting valid stereotypes inevitably results in suboptimal judgments. Resistance to stereotyping is a laudable moral position, but the simplistic idea that the resistance is costless is wrong. The costs are worth paying to achieve a better society, but denying that the costs exist, while satisfying to the soul and politically correct, is not scientifically defensible.
• These were the results: only four of the fifteen participants responded immediately to the appeal for help. Six never got out of their booth, and five others came out only well after the “seizure victim” apparently choked. The experiment shows that individuals feel relieved of responsibility when they know that others have heard the same request for help.
• For some of our most important beliefs we have no evidence at all, except that people we love and trust hold these beliefs.
• They cite John Gottman, the well-known expert in marital relations, who observed that the long-term success of a relationship depends far more on avoiding the negative than on seeking the positive. Gottman estimated that a stable relationship requires Brro Qres Brrthat good interactions outnumber bad interactions by at least 5 to 1. Other asymmetries in the social domain are even more striking. We all know that a friendship that may take years to develop can be ruined by a single action.
• “His car broke down on the way to work this morning and he’s in a foul mood. This is not a good day to ask him about his job satisfaction!”