Daniel Kahneman

Part IV of Thinking, Fast and Slow

NOT BASEBALL This section focuses on two ideas.  Behavior depends on starting state as well as change.  Prospect theory summarizes this.  You can not use mathematical expected value to predict how people will value wagers and risks.  Basically people will take risks to avoid losses.  They will also pay a cost to get a sure […]

More

Chapter 24: TFS

NOT BASEBALL Chapter 24 is titled The Engine of Capitalism. Business leaders are optimists. As with most people they feel their skills are above average.  They have a tendency to ignore external factors like competition.  They are overconfident in the success of a typical enterprise. To balance this Kahneman suggests a premortem on new ideas.  Ask […]

More

TFS: Chapter 23

NOT BASEBALL Chapter 23 is titled The Outside View. The focus is on a planning fallacy and how to mitigate it using reference class forecasting. People with information about a case rarely look at information about the class to which the case belongs. If the case is a building project that can lead people to […]

More

Chapters 16 and 17 in Thinking, Fast and Slow

NOT BASEBALL Cause Trumps Statisitics gives examples of statitistical effects related to false positives in medical tests, although that is not an example Kahneman used.  He does mention that eyewitness testimony, even when probably in error, will overwhelm statistical probabilities in most people’s minds.  He uses an example about the color of a cab involved in […]

More