"Laziness is built deep into our nature."

"law of least effort"

"Let’s not dismiss their business plan just because the font makes it hard to read."

"We must be inclined to believe it because it has been repeated so often, but let’s think it through again."

"Familiarity breeds liking. This is a mere exposure effect."

"I’m in a very good mood today, and my System 2 is weaker than usual. I should be extra careful."

"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."

"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."

"The sequence in which we observe characteristics of a person is often determined by chance. Sequence matters, however, because the halo effect increases the weight of first impressions, sometimes to the point that subsequent information is mostly wasted."

"This is just what you would expect if the confidence that people experience is determined by the coherence of the story they manage to construct from available information. 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."

"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."

"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."

"Statistics produce many observations that appear to beg for causal explanations but do not lend themselves to such explanations. Many facts of the world are due to chance, including accidents of sampling. Causal explanations of chance events are inevitably wrong."

"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 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 most coherent stories are not necessarily the most probable, but they are plausible, and the notions of coherence, plausibility, and probability are easily confused by the unwary."

"This is a trap for forecasters and their clients: adding detail to scenarios makes them more persuasive, but less likely to come true."

"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. Reliance on the affect heuristic is common in politically charged arguments. The positions we favor have no cost and those we oppose have no benefits. We should be able to do better."

"There is a deep gap between our thinking about statistics and our thinking about individual cases. Statistical results with a causal interpretation have a stronger effect on our thinking than noncausal information. But even compelling causal statistics will not change long-held beliefs or beliefs rooted in personal experience."

"No need to worry about this statistical information being ignored. On the contrary, it will immediately be used to feed a stereotype."

"The fact that you observe regression when you predict an early event from a later event should help convince you that regression does not have a causal explanation."

"The commentator had obviously detected regression to the mean and had invented a causal story for which there was no evidence."

"the statistician David Freedman used to say that if the topic of regression comes up in a criminal or civil trial, the side that must explain regression to the jury will lose the case."

"our mind is strongly biased toward causal explanations and does not deal well with “mere statistics."

"Causal explanations will be evoked when regression is detected, but they will be wrong because the truth is that regression to the mean has an explanation but does not have a cause."

"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 graduates 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."

"A characteristic of unbiased predictions is that they permit the prediction of rare or extreme events only when the information is very good."

"extreme outcomes are much more likely to be observed in small samples."

"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."

"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."

"we humans constantly fool ourselves by constructing flimsy accounts of the past and believing they are true."

"The halo effect helps keep explanatory narratives simple and coherent by exaggerating the consistency of evaluations: good people do only good things and bad people are all bad."

"The human mind does not deal well with nonevents. The fact that many of the important events that did occur involve choices further tempts you to exaggerate the role of skill and underestimate the part that luck played in the outcome. Because every critical decision turned out well, the record suggests almost flawless prescience—but bad luck could have disrupted any one of the successful steps. The halo effect adds the final touches, lending an aura of invincibility to the heroes of the story."

"You cannot help dealing with the limited information you have as if it were all there is to know. You build the best possible story from the information available to you, and if it is a good story, you believe it. Paradoxically, it is easier to construct a coherent story when you know little, when there are fewer pieces to fit into the puzzle. Our comforting conviction that the world makes sense rests on a secure foundation: our almost unlimited ability to ignore our ignorance."

"The mind that makes up narratives about the past is a sense-making organ. When an unpredicted event occurs, we immediately adjust our view of the world to accommodate the surprise."

"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."

statistical fact of life: regression to the mean"

"System 1 is designed to jump to conclusions from little evidence—and it is not designed to know the size of its jumps. Because of WYSIATI, only the evidence at hand counts."

"The illusion that we understand the past fosters overconfidence in our ability to predict the future."

"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."

"An unbiased appreciation of uncertainty is a cornerstone of rationality—but it is not what people and organizations want."

"The main virtue of the premortem is that it legitimizes doubts."

- Daniel Kahneman, Thinking, Fast and Slow