Thinking, Fast and Slow - Daniel Kahneman

inequality of income (measured by standard deviation) would be reduced only by about 9%.
The relevant formula is v (1–r 2 ), where r is the correlation.
correlation and regression: This is true when both variables are measured in standard scores—
that is, where each score is transformed by removing the mean and dividing the result by the
standard deviation.
confusing mere correlation with causation: Howard Wainer, “The Most Dangerous Equation,”
American Scientist 95 (2007): 249–56.
18: Taming Intuitive Predictions
far more moderate: The proof of the standard regression as the optimal solution to the
prediction problem assumes that errors are weighted by the squared deviation from the correct
value. This is the least-squares criterion, which is commonly accepted. Other loss functions
lead to different solutions.
19: The Illusion of Understanding
narrative fallacy: Nassim Nicholas Taleb, The Black Swan: The Impact of the Highly
Improbable (New York: Random House, 2007).
one attribute that is particularly significant:.
throwing the ball: Michael Lewis, Moneyball: The Art of Winning an Unfair Game (New
York: Norton, 2003).
sell their company: Seth Weintraub, “Excite Passed Up Buying Google for $750,000 in 1999,”
Fortune, September 29, 2011.
ever felt differently: Richard E. Nisbett and Timothy D. Wilson, “Telling More Than We Can
Know: Verbal Reports on Mental Processes,” Psychological Review 84 (1977): 231–59.
United States and the Soviet Union: Baruch Fischhoff and Ruth Beyth, “I Knew It Would
Happen: Remembered Probabilities of Once Future Things,” Organizational Behavior and
Human Performance 13 (1975): 1–16.
quality of a decision: Jonathan Baron and John C. Hershey, “Outcome Bias in Decision {s iiv>
Evaluation,” Journal of Personality and Social Psychology 54 (1988): 569–79.
should have hired the monitor: Kim A. Kamin and Jeffrey Rachlinski, “Ex Post? Ex Ante:
Determining Liability in Hindsight,” Law and Human Behavior 19 (1995): 89–104. Jeffrey J.