Thinking, Fast and Slow - Daniel Kahneman

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actual damage to health appear not to have been substantiated. Kuran and Sunstein wrote up the Love Canal story almost as a pseudo-event, while on the other side of the debate, environmentalists still speak of the “Love Canal disaster.” Opinions are also divided on the second example Kuran and Sunstein used to illustrate their concept of an availability cascade, the Alar incident, known to detractors of environmental concerns as the “Alar scare” of 1989. Alar is a chemical that was sprayed on apples to regulate their growth and improve their appearance. The scare began with press stories that the chemical, when consumed in gigantic doses, caused cancerous tumors in rats and mice. The stories understandably frightened the public, and those fears encouraged more media coverage, the basic mechanism of an availability cascade. The topic dominated the news and produced dramatic media events such as the testimony of the actress Meryl Streep before Congress. The apple industry su ofstained large losses as apples and apple products became objects of fear. Kuran and Sunstein quote a citizen who called in to ask “whether it was safer to pour apple juice down the drain or to take it to a toxic waste dump.” The manufacturer withdrew the product and the FDA banned it. Subsequent research confirmed that the substance might pose a very small risk as a possible carcinogen, but the Alar incident was certainly an enormous overreaction to a minor problem. The net effect of the incident on public health was probably detrimental because fewer good apples were consumed. The Alar tale illustrates a basic limitation in the ability of our mind to deal with small risks: we either ignore them altogether or give them far too much weight—nothing in between. Every parent who has stayed up waiting for a teenage daughter who is late from a party will recognize the feeling. You may know that there is really (almost) nothing to worry about, but you cannot help images of disaster from coming to mind. As Slovic has argued, the amount of concern is not adequately sensitive to the probability of harm; you are imagining the numerator—the tragic story you saw on the news—and not thinking about the denominator. Sunstein has coined the phrase “probability neglect” to describe the pattern. The combination of probability neglect with the social mechanisms of availability cascades inevitably leads to gross exaggeration of minor threats, sometimes with important consequences. In today’s world, terrorists are the most significant practitioners of the art of inducing availability cascades. With a few horrible exceptions such as 9/11, the number of casualties from terror attacks is very small relative to other causes of death. Even in countries that have been targets of intensive terror campaigns, such as Israel, the weekly number of casualties almost never came close to the number of traffic deaths. The difference is in the availability of the two risks, the ease and the frequency with which they come to mind. Gruesome images, endlessly repeated in the media, cause everyone to be on edge. As I know from experience, it is difficult to reason oneself into a state of complete calm. Terrorism speaks directly to System 1. Where do I come down in the debate between my friends? Availability cascades are real and they undoubtedly distort priorities in the allocation of public resources. Cass Sunstein would seek mechanisms that insulate decision makers from public pressures, letting the allocation of resources be determined by impartial experts who have a broad view of all risks and of the resources available to reduce them. Paul Slovic trusts the experts much less and the public somewhat more than Sunstein does, and he points out that insulating the experts from the
emotions of the public produces policies that the public will reject—an impossible situation in a democracy. Both are eminently sensible, and I agree with both. I share Sunstein’s discomfort with the influence of irrational fears and availability cascades on public policy in the domain of risk. However, I also share Slovic’s belief that widespread fears, even if they are unreasonable, should not be ignored by policy makers. Rational or not, fear is painful and debilitating, and policy makers must endeavor to protect the public from fear, not only from real dangers. Slovic rightly stresses the resistance of the public to the idea of decisions being made by unelected and unaccountable experts. Furthermore, availability cascades may have a long-term benefit by calling attention to classes of risks and by increasing the overall size of the riskreduction budget. The Love Canal incident may have caused excessive resources to be allocated to the management of toxic betwaste, but it also had a more general effect in raising the priority level of environmental concerns. Democracy is inevitably messy, in part because the availability and affect heuristics that guide citizens’ beliefs and attitudes are inevitably biased, even if they generally point in the right direction. Psychology should inform the design of risk policies that combine the experts’ knowledge with the public’s emotions and intuitions. Speaking of Availability Cascades “She’s raving about an innovation that has large benefits and no costs. I suspect the affect heuristic.” “This is an availability cascade: a nonevent that is inflated by the media and the public until it fills our TV screens and becomes all anyone is talking about.” Tom W’s Specialty Have a look at a simple puzzle: Tom W is a graduate student at the main university in your state. Please rank the following nine fields of graduate specialization in order of the likelihood that Tom W is now a student in each of these fields. Use 1 for the most likely, 9 for the least likely.
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A 1 E=mc 2 This eBook is provided b
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Contents Introduction Part I. Two S
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Part V. Two Selves 35. Two Selves 3
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So this is my aim for watercooler c
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participants in our experiments ign
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easy to identify a small change in
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From what we know about the accurac
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agents in classical economics and i
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Psychologists have been intensely i
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Brace for the starter gun in a race
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event is detected that violates the
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attention on a boring book, when we
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You have been invited to think of t
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Start beating a steady rhythm (or b
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main finding was that the ability t
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Another is the prefrontal area of t
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Accelerating beyond my strolling sp
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The list of indications of depletio
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answer have missed an obvious socia
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In one of the most famous experimen
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“Unfortunately, she tends to say
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notion that we have limited access
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Studies of priming effects have yie
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ox changed significantly. The poste
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strain is affected by both the curr
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legs in packages of four. System 2
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message want to stay away from anyt
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kadirga, saricik, biwonjni, nansoma
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These findings add to the growing e
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of circumstances, events, actions,
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understand that I mean a normal tab
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attributions: infants under one yea
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ut the middle items in both display
Page 68 and 69: Real evidence of generosity is miss
Page 70 and 71: This procedure makes good use of th
Page 72 and 73: WY SIATI to help explain a long and
Page 74 and 75: constantly evaluated as good or bad
Page 76 and 77: For another example, consider the q
Page 78 and 79: What level of income in your profes
Page 80 and 81: “The punishment won’t feel just
Page 82 and 83: How happy are you with your life th
Page 84 and 85: Figure 9 As printed on the page, is
Page 86 and 87: The results this time were complete
Page 88 and 89: “We are using last year’s perfo
Page 90 and 91: A study of the incidence of kidney
Page 92 and 93: Large samples are more precise than
Page 94 and 95: The message about the poll contains
Page 96 and 97: interviewing of the pilots should s
Page 98 and 99: “The sample of observations is to
Page 100 and 101: parent’s demand that it be played
Page 102 and 103: operation of System 1. Although I d
Page 104 and 105: Uses and Abuses of Anchors By now y
Page 106 and 107: “The firm we want to acquire sent
Page 108 and 109: A dramatic event temporarily increa
Page 110 and 111: instructed to contract the zygomati
Page 112 and 113: found it difficult to find eight in
Page 114 and 115: The most influential studies of ava
Page 116 and 117: Differences between experts and the
Page 120 and 121: usiness administration computer sci
Page 122 and 123: You probably ranked computer scienc
Page 124 and 125: epresentativeness when we judge the
Page 126 and 127: laziness. Some people ignore base r
Page 128 and 129: “They keep making the same mistak
Page 130 and 131: In the language of this book, we ha
Page 132 and 133: Which alternative is more probable?
Page 134 and 135: Björn Borg was the dominant tennis
Page 136 and 137: information was laid out in front o
Page 138 and 139: 85% of the cabs in the city are Gre
Page 140 and 141: Interest in cycling is widespread i
Page 142 and 143: not draw from base-rate information
Page 144 and 145: chosen another surprising psycholog
Page 146 and 147: officer in the room to turn his bac
Page 148 and 149: Now let us go against the time arro
Page 150 and 151: piano playing = age + weekly hours
Page 152 and 153: Our difficulties with the concept o
Page 154 and 155: “Perhaps his second interview was
Page 156 and 157: Intensity matching yields predictio
Page 158 and 159: their usual mission, which was to e
Page 160 and 161: A Defense of Extreme Predictions? I
Page 162 and 163: Perhaps the most valuable contribut
Page 164 and 165: Overconfidence The Illusion of Unde
Page 166 and 167: sentence about an intuition that tu
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Although hindsight and the outcome
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The basic message of Built to Last
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someone’s shoulders and jump acro
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In 1984, Amos and I and our friend
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Some years ago I had an unusual opp
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The idea that the future is unpredi
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Short-term trends can be forecast,
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unpredictability. We describe them
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the values to make them comparable
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Even after being informed that the
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only task was to elicit relevant fa
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Professional controversies bring ou
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Klein elaborated this description i
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Acquiring expertise in chess is har
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Feedback and Practice Some regulari
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It is difficult to reconstruct what
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within the optimistic consensus of
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about an individual case rarely fee
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The diagnosis of and the remedy for
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Seymour’s statistical summary. If
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The evidence suggests that an optim
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had failed. A common thread of bold
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The consequence of competition negl
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one’s self-image. In essence, the
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ut I can still recite its first sen
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most significant work we ever did,
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The expected value of the gamble an
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how the sure outcome differs from t
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for so long to see the obvious. Sti
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problem 4. Obviously, other example
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Loss Aversion Many of the options w
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Figure 10 shows an abrupt change in
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and the failure to acknowledge them
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Students learn in introductory econ
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Loss aversion implies only that cho
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would share a Nobel Prize many year
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The fundamental ideas of prospect t
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“He is a miser, and treats any do
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Some distinctions between good and
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Many of the messages that negotiato
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wage cut. The replacement worker ha
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The Fourfold Pattern Whenever you f
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probability leads to inconsistencie
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Table 4 You can see that the decisi
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Figure 13 The top row in each cel
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time to cut one’s losses. This is
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“We never let our vacations hang
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People overestimate the probabiliti
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depend only on probability, not on
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The new hypothesis is that there wi
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another: “1,000 Americans will di
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experiments on choice from experien
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combining the two decision problems
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You can see in the display that the
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detection. As expected, broad frami
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dollar, money is a proxy for points
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provide a strong incentive: realizi
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Regret is not the same as blame. Ot
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vaccine that is effective only befo
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with long-term consequences. Hindsi
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are absent, and of course WYSIATI.
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“How tall is John?” If John is
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the threat of skin cancer in farmwo
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As we have seen, rationality is gen
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Would you pay $5 to participate in
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thousands of such experiments, and
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If program B is adopted, there is a
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point, and they are not about the r
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large print, but the move is in the
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The term utility has had two distin
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Figure 15 When the procedure was ov
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not have a voice. The remembering s
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Other classic studies showed that e
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we want to know whether they were r
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How would this prospect affect your
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welcome in any of these situations.
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exposure to loud noise, time pressu
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The satiation level beyond which ex
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the exact question they were asked,
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didn’t get it were significantly
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thinks much about. Thoughts of any
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stories and makes choices, and neit
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The mirror image of the same bias m
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explains how a rational agent with
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The example of a regulation about t
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The way to block errors that origin
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For an illustration of judgment by
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The values in parentheses are the n
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The illusion of validity. As we hav
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elementary demonstration of this ef
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imagine than unlikely ones; and tha
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event. The chain-like structure of
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lines or pages. Thus, people do not
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W. Edwards, “Conservatism in Huma
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Daniel Kahneman and Amos Tversky AB
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Figure 1. A Hypothetical Value Func
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If Program B is adopted, there is a
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same cd Cce f pattern of results wa
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In Figure 2, decision weights are l
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attractive if it is described as ef
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making, play a role analogous to th
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disadvantages as losses. Because lo
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The concepts of utility and value a
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McNeil, B., S. Pauker, H. Sox Jr.,
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editor could do as much as Eric did
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Us (New York: Guilford Press, 1999)
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working memory: Baddeley, Working M
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think with your body: Paula M. Nied
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engaged and analytic mode: Adam L.
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descriptions of two people: Solomon
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“Assimilation and Contrast Effect
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self-assessed contributions: Michae
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always weighted more: Jonathan St.
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inequality of income (measured by s
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outsiders, recruiting CEOs from com
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moderated by an arbiter: Mellers, H
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admiration of others: Entrepreneurs
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“history of one’s wealth”: Ot
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half of the tokens will change hand
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“acceptable/unacceptable”: Jos
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Samuel R. Gross and Kent D. Syverud
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“a sinking feeling”: Marcel Zee
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one embarrassing finding: Kuhn famo
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life as a whole these days: Another
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Los Angeles, Graduate School of Edu
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The index that appeared in the prin
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availability; affect and; and aware
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oken-leg rule budget forecasts Buil
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cognitive illusions; confusing expe
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default options denominator neglect
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Epley, Nick Epstein, Seymour equal-
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forecasts, see predictions and fore
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grades and grade point averages (GP
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inheritances injection puzzle In Se
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labor negotiations Lady Macbeth eff
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Mednick, Sarnoff Meehl, Paul meetin
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novelty Nudge (Thaler and Sunstein)
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t="-5%"> post-traumatic stress pove
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Rationality and the Reflective Mind
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Savage, Jimmie Save More Tomorrow S
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Steiger, James H. stereotypes; caus
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threats; possibility effect and 3-D
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wealth, see money and wealth weathe
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Grateful acknowledgment is made for
Page 457 and 458:
Table of Contents Introduction 1. T
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Thank You W ant More Books? W e hop
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