The World's Best Book Summaries
What is “System 2 thinking?” When should you use it? And why can it be more effective than System 1 thinking? System 2 thinking is thinking that allocates attention to the effortful mental activities that demand it, including complex computations. It’s often associated with the subjective experience of agency, choice and concentration. We’ll cover the properties of System 2 thinking and how to use it to make better decisions.
What are framing effects in psychology? How do framing effects affect decision making? The framing effect is a cognitive bias in which people make decisions based on whether the options are “framed,” or presented, as losses or gains. An outcome presented as a gain is much more favorable as the same outcome framed as a loss. We’ll cover how framing effects impact your decision making and look at framing effect examples.
What is narrative fallacy? When and why do you make this fallacy, and how can you avoid it? The narrative fallacy is the tendency to create a story with cause-and-effect explanations out of random details and events. We fall victim to the narrative fallacy because our brains want to make sense of a random world. Learn why your brain is so prone to falling for the narrative fallacy and how to counter it.
What is “System 1 Thinking,” from Daniel Kahneman’s Thinking, Fast and Slow? When should I use it, and when shouldn’t I? System 1 thinking is thinking that operates automatically and quickly. It takes little or no effort, and no sense of voluntary control. We’ll cover how Kahneman’s System 1 thinking is involved in making judgments and what biases System 1 thinking leaves you susceptible to.
What is the endowment effect? Am I affected by it? How does it function in my everyday life? The endowment effect is the theory that people keep an object and value it more highly once they own it. In essence, the endowment effect causes people to overvalue their belongings. We’ll look at three examples of the endowment effect and how you’re susceptible to it.
What is hindsight bias? How does it work, and how can you avoid it? Hindsight bias is the tendency to believe you have predicted events or outcomes that were unpredictable. Hindsight bias is a problem because it inflates our confidence about predicting the future. We’ll look at hindsight bias examples that make the above definition clearer. Learn why the hindsight bias in psychology is an issue and how to overcome it.
What is “fast thinking?” When should you use it, and when should you slow down? Fast thinking is thinking that is automatic and quick. It uses little or no effort, and no sense of voluntary control. Learn when to trust your fast thinking and why formulas usually beat intuitions.
What is expected utility theory? How is it used to predict human behavior? And what are its flaws? Expected utility theory is a theory of how people make choices and take risks when they don’t know the outcome. Traditional expected utility theory asserts that people are rational agents that calculate the utility of each situation and make the optimum choice each time. We’ll look at how expected utility theory for decision making works and cover some of its flaws.
What is outcome bias? How does it manifest in your everyday life, and how can you avoid it? Outcome bias is the tendency to evaluate the quality of a decision when the outcome is already known. People who succeeded are assumed to have made better decisions than people who failed. We’ll look at outcome bias examples and why we’re so vulnerable to outcome bias.
What is “slow thinking?” How can you use it to become a better thinker and make better decisions? Slow thinking is when you allocate attention to the effortful mental activities that demand it, including complex computations. It’s often associated with the subjective experience of agency, choice and concentration. We’ll cover what slow thinking is and how to use it to make better decisions.