Ensayo

In memory of Amos Tversky

Contents
Introduction Part I. Two Systems 1. The Characters of the Story 2. Attention and Effort 3. The Lazy Controller 4. The Associative Machine 5. Cognitive Ease 6. Norms, Surprises, and Causes 7. A Machine for Jumping to Conclusions 8. How Judgments Happen 9. Answering an Easier Question Part II. Heuristics and Biases 10. The Law of Small Numbers 11. Anchors12. The Science of Availability 13. Availability, Emotion, and Risk 14. Tom W’s Specialty

15. Linda: Less is More 16. Causes Trump Statistics 17. Regression to the Mean 18. Taming Intuitive Predictions Part III. Overconfidence 19. The Illusion of Understanding 20. The Illusion of Validity 21. Intuitions Vs. Formulas 22. Expert Intuition: When Can We Trust It? 23. The Outside View 24. TheEngine of Capitalism Part IV. Choices 25. Bernoulli’s Errors 26. Prospect Theory 27. The Endowment Effect 28. Bad Events 29. The Fourfold Pattern 30. Rare Events 31. Risk Policies

32. Keeping Score 33. Reversals 34. Frames and Reality Part V. Two Selves 35. Two Selves 36. Life as a Story 37. Experienced Well-Being 38. Thinking About Life Conclusions

Appendix Uncertainty

A:

JudgmentUnder

Appendix B: Choices, Values, and Frames Acknowledgments Notes Index

Introduction
Every author, I suppose, has in mind a setting in which readers of his or her work could benefit from having read it. Mine is the proverbial office watercooler, where opinions are shared and gossip is exchanged. I hope to enrich the vocabulary that people use when they talk about the judgments and choices ofothers, the company’s new policies, or a colleague’s investment decisions. Why be concerned with gossip? Because it is much easier, as well as far more enjoyable, to identify and label the mistakes of others than to recognize our own. Questioning what we believe and want is difficult at the best of times, and especially difficult when we most need to do it, but we can benefit from the informedopinions of others. Many of us spontaneously anticipate how friends and colleagues will evaluate our choices; the quality and content of these anticipated judgments therefore matters. The expectation of intelligent gossip is a powerful motive for serious self-criticism, more powerful than New Y ear resolutions to improve one’s decision making at work and at home. To be a good diagnostician, aphysician 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 richervocabulary 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 hedeserves. 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. Y believe you know what goes on in your mind, which often ou consists of one conscious thought leading in an orderly way to another. But that is not the only way the mind works, nor indeed isthat the typical way. Most impressions and thoughts arise in your conscious experience without your knowing how they got there. Y cannot tracryd>e how you came to ou 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...