A Bias Toward Complexity

A Bias Toward Complexity

When making predictions or decisions in the real world where there are many variables, high levels of uncertainty, and numerous alternative options to chose from, using a simple rule of thumb can be better than developing complex models for predictions. The intuitive sense is that the more complex our model the more accurately it will … Continue reading A Bias Toward Complexity

The Human Need for Certainty - Joe Abittan

The Human Need for Certainty

Throughout the book Risk Savvy, Gerd Gigerenzer discusses the challenges that people face with thinking statistically, assessing different probable outcomes, and understanding risk. Gigerenzer also discusses how important it is that people become risk literate, and how the future of humanity will require that people better understand risk and uncertainty. What this future requires, he … Continue reading The Human Need for Certainty

Asymmetric Paternalism

Asymmetric Paternalism

While writing about the book Nudge by Richard Thaler and Cass Sunstein, I have primarily focused on an idea that the authors call Libertarian Paternalism. The idea is to structure choices and use nudges (slight incentives and structural approaches) to guide people toward making the best possible decision as judged by themselves. Maintaining free choice … Continue reading Asymmetric Paternalism

Paternalistic Nudges - Joe Abittan

Paternalistic Nudges

In their book Nudge, Cass Sunstein and Richard Thaler argue in favor of libertarian paternalism. Their argument is that our world is complex and interconnected, and it is impossible for people to truly make decisions on their own. Not only is it impossible for people to simply make their own decisions, it is impossible for … Continue reading Paternalistic Nudges

Hindsight Bias and Accountability - Joe Abittan

Hindsight Bias and Accountability

"Increased accountability is a mixed blessing," writes Daniel Kahneman in his book Thinking Fast and Slow. This is an idea I came across in the past from books like Political Realism by Jonathan Rauch and The New Localism by Bruce Katz and  Jeremy Nowak. Our go-to answer to any challenges and problems tends to be … Continue reading Hindsight Bias and Accountability

Hindsight Bias and Misleading Headlines

Hindsight Bias and Misleading Headlines

I absolutely hate internet ads that have headlines along the lines of "Analyst Who Predicted Stock Market Crash Says Makes New Prediction." These headlines are always nothing but clickbait, and reading Daniel Kahneman's book Thinking Fast and Slow has given me even more reason to hate these types of headlines. They play on cognitive errors … Continue reading Hindsight Bias and Misleading Headlines

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