From Daniel Kahneman "Thinking, Fast and Slow" Be careful not to over appraise or under appraise someone due to the Halo Effect. If you like someone, you will probably over appraise them. If you hate someone, you probably dislike them more than they deserve. This is...
Decision Making Articles
How to conduct an interview with less bias
From Daniel Kahnehman "Thinking, fast and slow" If you are interviewing someone for a job, you probably will over weigh your personal impressions from the interview and under weigh the facts about the candidate. This is bad because the Halo Effect affects your...
Be careful when looking at results because you must factor in Regression to the Mean.
From Daniel Kahneman "Thinking, fast and slow" What is Regression to the Mean? Outcomes are a combination of skill and luck. If someone performs unusually well, it was due to luck. So next time they perform, they will do a lot worse. If someone performs unusually bad,...
Beware of Base Rate Neglect!
From Daniel Kahneman "Thinking, fast and slow" Beware of of Base Rate Neglect! When people make a prediction of something, they underweight Base Rates or even neglect them. This is an illusion called Base Rate Neglect. "There are two ideas to keep in mind about...
When can you trust Intuition?
From Daniel Kahneman "Thinking, fast and slow" Some people claim to have great intuition. Should you trust their intuition? What is Intuition and When Can You Trust it? First of all, what is intuition? Is it mysterious? Is it magic? No. Intuition is simply information...
Munger’s Overoptimism Tendency
From Charlie Munger "Poor Charlie's Almanack" "What a man wishes, that also will he believe." "The Greek orator as clearly right about an excess of optimism being the normal human condition, even when pain or the threat of pain is absent." "One standard antidote to...
Munger’s Excessive Self-Regard Tendency
From Charlie Munger's "Poor Charlie's Almanack" "We all commonly observe the excessive self-regard of man. He mostly misappraises himself on the high side, like the ninety percent of Swedish drivers that judge themselves to be above average." (p.473) One spouse...
Munger’s Social Proof Tendency
From Charlie Munger's "Poor Charlie's Almanack" "The otherwise complex behavior of man is much simplified when he automatically thinks and does what he observes to be thought and done around him." (p. 480) "This make it wise for parents to rely more on manipulating...
Munger’s Authority-Misinfluence Tendency
From Charlie Munger's "Poor Charlie's Almanack" "Living in dominance hierarchies as he does, like all his ancestors before him, man was born mostly to follow leaders, with only a few people doing the leading. And so, human society is formally organized into dominance...
Munger’s Availability-Misweighing Tendency
From Charlie Munger's "Poor Charlie's Almanack" "Man's imperfect, limited-capacity brain easily drifts into working with what's easily available to it." (p. 486) "The main antidote to miscues from Availablity-Misweighing Tendency often involves procedures, including...