Endowment Effects Joe Abittan

Endowment Effects

In his book Thinking Fast and Slow, Daniel Kahneman discusses an experiment he helped run to explore the endowment effect. The endowment effect is a cognitive fallacy that helps explain our attachment to things and our unwillingness to part with objects, even when we are offered something greater than the objective value of the the … Continue reading Endowment Effects

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

Anchoring Effects

Anchoring Effects

Anchoring effects were one of the psychological phenomenon that I found the most interesting in Daniel Kahneman's book Thinking Fast and Slow. In many situations in our lives, random numbers seem to be able to influence other numbers that we consciously think about, even when there is no reasonable connection between the random number we … Continue reading Anchoring Effects

Guided by Impressions of System 1

Guided by Impressions of System 1

In Thinking Fast and Slow Daniel Kahneman shares research showing how easily people can be tricked or influenced by factors that seem to be completely irrelevant to the mental task that the people are asked to carry out. People will remember rhyming proverbs better than non-rhyming proverbs. People will trust a cited research source with … Continue reading Guided by Impressions of System 1

Thoughts on Biases

Thoughts on Biases

"Anything that makes it easier for the associative machine to run smoothly will also bias beliefs," writes Daniel Kahneman in his book Thinking Fast and Slow. Biases are an unavoidable part of our thinking. They can lead to terrible prejudices, habits, and meaningless preferences, but they can also help save us a lot of time, … Continue reading Thoughts on Biases

Detecting Simple Relationships

Detecting Simple Relationships

System 1, in Daniel Kahneman's picture of the mind, is the part of our brain that is always on. It is the automatic part of our brain that detects simple relationships in the world, makes quick assumptions and associations, and reacts to the world before we are even consciously aware of anything. It is contrasted … Continue reading Detecting Simple Relationships

We Think of Ourselves as Rational

We Think of Ourselves as Rational

In Daniel Kahneman's book Thinking Fast and Slow, Kahneman lays out two ideas for thinking about our thought processing. Kahneman calles the two ways of thinking about our thought processing System 1 and System 2. System 1 is fast, automatic, often subconscious, and usually pretty accurate in terms of making quick judgments, assumptions, and estimations … Continue reading We Think of Ourselves as Rational

Thinking Statistically

Thinking Statistically

In Thinking Fast and Slow, Daniel Kahneman personifies two modes of thought as System 1 and System 2. System 1 is fast. It takes in information, processes it rapidly, and doesn't always make us cognizant of the information we took in. It reacts to the world around us on an intuitive level, isn't good at … Continue reading Thinking Statistically

Answering the Easy Question

Answering the Easy Question

One of my favorite pieces from Daniel Kahneman's book Thinking Fast and Slow, was the research Kahneman presented on mental substitution. Our brains work very quickly, and we don't always recognize the times when our thinking has moved in a direction we didn't intend. Our thinking seems to flow logically and naturally from one thought … Continue reading Answering the Easy Question

Expert Intuition

Expert Intuition

Much of Daniel Kahneman's book Thinking Fast and Slow is about the breakdowns in our thinking processes, especially regarding the mental shortcuts we use to make decisions. The reality of the world is that there is too much information, too many stimuli, too many things that we could focus on and consider at any given … Continue reading Expert Intuition