Cognitive Errors - Thinking Fast and Slow Flashcards
Cognitive Ease
Makes us feel more favorable toward things that are familiar, easy to understand, and easy to see or read. Our mind’s look for the easy way, and don’t trigger our system 2 thinking.
Thinking Fast and Slow
Confirmation Bias
The easy acceptance of information that validates what we already believe. It causes us to selectively notice and pay attention to what confirms our beliefs and to ignore what doesn’t.
Thinking Fast and Slow
The Halo Effect
The tendency to view other people as all good (or all bad) based on a snippet of information. We ignore evidence that contradicts our general impression of the person.
Thinking Fast and Slow
Hindsight Bias
The hindsight bias makes us think the world is more predictable than it actually is. In retrospect, everything seems inevitable.
Thinking Fast and Slow
Outcome Bias
The outcome bias leads us to evaluate a decision based on the eventual RESULTS OR OUTCOME of the decision rather than on the SOUNDNESS OR QUALITY of the decision at the time it was made.
Example: People tend to think that if something goes wrong during a low-risk surgical procedure, the decision to do the procedure was a bad one.
Thinking Fast and Slow
Prospect Theory
Humans dislike losses more than equivalent gains, we are more willing to take risks in order to avoid a loss than to take a risk in order to obtain an equivalent gain.
Prospect Theory highlights the reference point (as opposed to Utility Theory). Where you come from makes a difference in happiness.
Thinking Fast and Slow
Endowment Effect
People ascribe more value to things merely because they own them.
Example: You could buy wine for $35 but only be willing to sell it for $100. The rational thing to do would be willing to buy below the value setpoint ($100) and sell above the value setpoint.
Thinking Fast and Slow
Anchoring Effect
Our tendency to be influenced by irrelevant numbers.
Example: shown higher/lower numbers, experimental subjects gave higher/lower responses.
Thinking Fast and Slow
Availability Effect
A mental shortcut that occurs when people make judgements about the probability of events on the basis of how easy it is to think of examples.
Example: “If you can think of it, it must be important”
Thinking Fast and Slow
Substitution Effect
System 1 is prone to substituting a difficult question with a simpler one.
Thinking Fast and Slow
Optimistic Bias
Humans fail to take into account complexity and that their understanding of the world consists of a small and necessarily un-representative set of observations.
Thinking Fast and Slow
Framing
Framing is the context in which choices are presented.
Example: subjects were asked whether they would opt for surgery if the “survival” rate is 90 percent, while others were told that the mortality rate is 10 percent. The first raming increased acceptance, even though the situation was no different.
Thinking Fast and Slow
Possibility Effect
Improbable outcomes are overweighted.
Example: 5% chance you lose a million dollar court case. People will do a lot to change 5% to 0 %.
Certainty Effect
Outcomes that are considered almost certain argument and less weight than their probability suggests.
Denominator Neglect
People tend their ignore the denominator and overweight examples when specific figures are used.
Example: 1 man out of every 1,000 man get in a car accident here. 0.1% of men get in a car accident here.
