STANWOOD insights

Book review: Thinking, Fast and Slow - Daniel Kahneman

Sep 19, 2019 3:37:16 PM / by Hannes Kleist

Our head of catering Hannes, reviews his favorite books.

This week Hannes read a a book on how our mind works and where it fails us.

Daniel Kahneman received a Nobel price 2002 for having integrated insights from psychological research into economic science, especially concerning human judgment and decision-making under uncertainty

Part I. Two Systems

We can be blind to the obvious, and we are also blind to our blindness. The best we can do is a compromise: learn to recognize situations in which mistakes are likely and try harder to avoid significant mistakes when the stakes are high. The premise of this book is that it is easier to recognize other people’s mistakes than our own.

That's why you should read this book.

Indeed, I suspect that the mild physical arousal of the walk may spill over. My experience is that I can think while strolling but cannot engage in mental work that imposes a heavy load on short-term memory.

Another fan of walking and thinking ;-)

If I must construct an intricate argument under time pressure, I would rather be still, and I would prefer sitting to standing.

I like mindmapping for deep thinking.

People who experience flow describe it as “a state of effortless concentration so deep that they lose their sense of time, of themselves, of their problems.”

Beautiful put. This is what we should strive towards.

When you are actively involved in difficult cognitive reasoning or engaged in a task that requires self-control, your blood glucose level drops. Restoring the level of available sugar in the brain had prevented the deterioration of performance.

I wonder how intermittend fasting folds into this.

Children who had shown more self-control as four-year-olds had substantially higher scores on tests of intelligence.

I wonder if I can train my boys in this?

A reliable way to make people believe in falsehoods is frequent repetition, because familiarity is not easily distinguished from truth.

That's why I repeat stuff 22 times :-)))))

A simple rule can help: before an issue is discussed, all members of the committee should be asked to write a very brief summary of their position.

Or discuss in 1:1 before. I also asked the participants in Performance Review meetings to rate people before the meeting.

Part II. Heuristics and Biases

My advice to students when I taught negotiations was that if you think the other side has made an outrageous proposal, you should not come back with an equally outrageous counteroffer, creating a gap that will be difficult to bridge in further negotiations. Instead you should make a scene, storm out or threaten to do so, and make it clear—to yourself as well as to the other side—that you will not continue the negotiation with that number on the table.

Oh, I will so try this.

The explanation is a simple availability bias: both spouses remember their own individual efforts and contributions much more clearly than those of the other, and the difference in availability leads to a difference in judged frequency.

This is good to know to keep your marriage happy

The same bias contributes to the common observation that many members of a collaborative team feel they have done more than their share and also feel that the others are not adequately grateful for their individual contributions.

That's why we say: That for every critisim you need to praise a person 7 times.

First, list six instances in which you behaved assertively. Next, evaluate how assertive you are.

Nice trick to get people out of there biases. I use this whenever I get feedback. Most people cannot remember more than one or two instances.

There is a deep gap between our thinking about statistics and our thinking about individual cases. Statistical results with a causal interpretation have a stronger effect on our thinking than noncausal information.

Thats why you should teach with exaples ad not with numbrs

Part III. Overconfidence

The mind that makes up narratives about the past is a sense-making organ.

That's why you should never trust ex-post cause-and-effect theories.

Formulas that assign equal weights to all the predictors are often superior, because they are not affected by accidents of sampling.

Learning: Do not weight predictors.

Don’t overdo it—six dimensions is a good number.

Roger that.

Part IV. Choices

His utility function explained why poor people buy insurance and why richer people sell it to them.

:-)))))))))))

The “loss aversion ratio” has been estimated in several experiments and is usually in the range of 1.5 to 2.5.

Interesting...

“These negotiations are going nowhere because both sides find it difficult to make concessions, even when they can get something in return. Losses loom larger than gains.”

I used this in a price negotiation the other day: A 10% price decrease would have meant just that for the client. But for us it is 50% of our profits.

Gottman estimated that a stable relationship requires that good interactions outnumber bad interactions by at least 5 to 1.

That's why we say: That for every criticism you need to praise a person 7 times.

The entitlement is personal: the current worker has a right to retain

You cannot take stuff away from people. So be careful giving in the first place.

Buy the book here