Thinking, fast and slow - Part III

The name of this part is Overconfidence. Needless to say, its a must read.

Few excerpts:

"Once you adopt a new world, you immediately lose much of your ability to recall what you used to believe before your mind changed."

"We all have a need for the reassuring message that actions have appropriate consequences, and that success will reward wisdom and courage. Many business books are tailor-made to satisfy this need."

"In a memorable example, Dawes showed that martial stability is well predicted by a formula:

        frequency of lovemaking minus frequency of quarrels

 You don't want your result to be a negative number."

"When action is needed, optimism, even of the mildly delusional variety, may be a good thing."

"They felt no need to explain why they expected to succeed where six or seven others had failed. A common thread of boldness and optimism links businesspeople, from motel owners to superstar CEOs"

"President Truman famously asked for a "one-armed economist" who would take a clear stand; he was sick and tired of economists who kept saying, "On the other hand..."

"An unbiased appreciation of uncertainty is a cornerstone of rationality - but it is not what people and organizations want."

Notes from previous parts: 1 2