Scared Before You Even Know It

Scared Before You Even Know It

In Thinking Fast and Slow, Daniel Kahneman demonstrates how quick our minds are and how fast they react to potential dangers and threats by showing us two very simple pictures of eyes. The pictures are black squares, with a little bit of white space that our brains immediately perceive as eyes, and beyond that immediate … Continue reading Scared Before You Even Know It

Ignore Our Ignorance

Ignore Our Ignorance

There is a quote that is attributed to Harry Truman along the lines of, "give me a one-handed economist." The quote references the frustrations that any key decision-maker might have when faced with challenging and sometimes conflicting information and choices. On the one hand is a decision with a predicted set of outcomes, but on … Continue reading Ignore Our Ignorance

Narratives and Halos

Narratives and Halos

Yesterday I wrote about narrative fallacies and how our brains' desires to create coherent stories can lead to cognitive errors. One error, which I wrote about previously, is the halo effect, and in some ways it is a direct consequence of narrative thinking. Our brains don't do well with conflicting information that doesn't fit a … Continue reading Narratives and Halos

Narrative Fallacies #NarrativePolicyFramework

Narrative Fallacies

With perhaps the exception of professional accountants and actuaries, we think in narratives. How we understand important aspects of our lives, such as who we are, the opportunities we have had in life, the decisions we have made, and how our society works is shaped by the narratives we create in our minds. We use … Continue reading Narrative Fallacies

Intensity Matching and Intuitive Predictions

Intuitive Predictions and Intensity Matching

"Intuitive predictions are almost completely insensitive to the actual predictive quality of the evidence," writes Daniel Kahneman in Thinking Fast and Slow. A lot of our thinking takes place in the part of our brain which is good at making quick connections, quickly detecting patterns, and making fast judgments. The deeper and more thoughtful part … Continue reading Intuitive Predictions and Intensity Matching

Regression to the Mean Versus Causal Thinking

Regression to the Mean Versus Causal Thinking

Regression to the mean, the idea that there is an average outcome that can be expected and that overtime individual outliers from the average will revert back toward that average, is a boring phenomenon on its own. If you think about it in the context of driving to work and counting your red lights, you … Continue reading Regression to the Mean Versus Causal Thinking

Regression to the Mean

Praise, Punishment, & Regression to the Mean

Regression to the mean is seriously underrated. In sports, stock market funds, and biological trends like generational height differences, regression to the mean is a powerful, yet misunderstood phenomenon. A rookie athlete may have a standout first year, only to perform less spectacularly the following year. An index fund may outperform all others one year, … Continue reading Praise, Punishment, & Regression to the Mean

Valid Stereotypes

Valid Stereotypes?

Arguments about stereotypes are common in the world today. In the United States we have worked very hard to push back against stereotypes by bringing them into view so that we can address them directly to dispel incorrect and harmful prejudices. In the circles I am usually a part of, eliminating stereotypes is universally applauded, … Continue reading Valid Stereotypes?

Base Rates Joe Abittan

Base Rates

When we think about individual outcomes we usually think about independent causal structures. A car accident happened because a person was switching their Spotify playlist and accidently ran a red light. A person stole from a grocery store because they had poor moral character which came from a poor cultural upbringing. A build-up of electrical … Continue reading Base Rates