Monday, February 20, 2012

Thinking, fast and slow - Part IV

 [Image Courtesy: www.alexwhittaker.org]

This was perhaps the most interesting part. It dealt with choices.

Few excerpts:

"But of course the main reason that decision theorists study simple gambles is that this is what other decision theorists do."

"I call it theory-induced blindness: once you have accepted a theory and used it as a tool in your thinking, it is extraordinarily difficult to notice its flaws."

"Your leisure time and the standard of living that your income supports are also not intended for sale or exchange"

"The high price that Sellers set reflects the reluctance to give up an object that they already own, a reluctance that can be seen in babies who hold on fiercely to a toy and show great agitation when it is taken away. Loss aversion is built into the automatic evaluations of System I."

 "For the poor, costs are losses."

"The brains of humans and other animals contain a mechanism that is designed to give priority to bad news. By shaving a few hundredths of a second from the time needed to detect detect a predator,  this circuit improves the animals odds of living long enough to reproduce. No comparably rapid mechanism for recognizing good news has been detected."

"We are driven more strongly to avoid losses than to achieve gains."

"People often adopt short-term goals that they strive to achieve but not necessarily to exceed. They are likely to reduce their efforts when they have reached an immediate goal."

"Altruistic punishment could well be the glue that holds societies together. However, our brains are not designed to reward generosity as reliably as they punish meanness. Here again, we find marked asymmetry between losses and gains."

"Many unfortunate human situations unfold in the top right cell. This is where people who face very bad options take desperate gambles, accepting a high probability of making things worse in exchange for a small hope of avoiding a large loss."

"For one thing, it helps us see the logical consistency of Human preferences for what it is - a hopeless mirage."

 "The suck-cost fallacy keeps people for too long in poor jobs, unhappy marriages, and unpromising research projects."

"This short example illustrated a broad story: people expect to have stronger emotional reactions (including regret) to an outcome when it is produced by action than to the same outcome when it is produced by inaction."

"My personal hindsight-avoiding policy is to be either very thorough or completely causal when making a decision with long-term consequences. Hindsight is worse when you think a little, just enough to tell yourself later, "I almost made a better choice."

"Do those statements have the same meaning? The answer depends entirely on what you mean by meaning."

"A bad outcome is much more acceptable if it is framed as the cost of a lottery ticket that did not win than if it is simply described as losing a gamble. Losses evokes stronger negative feelings than costs."

Notes on previous parts: 1 2 3

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