fast and slow - how our mind jumps to conclusions

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Dangerously Fast How our mind jumps to conclusions2016-01-15

Kris Lohmann, Olaf Kummer


System 1 and System 2

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System 1


System 1

Immediate

Effortless

Simple

Confident

Associative

Gullible

Lazy


System 2

Kingdom: AnimaliaPhylum: ChordataClass: MammaliaSubclass: TheriaInfraclass: EutheriaOrder: ArtiodactylaFamily: BovidaeSubfamily:BovinaeGenus: BosSpecies: Taurus


System 2

Formal

Deductive

Complex

Slow

Tiring

Lazy

Kingdom: AnimaliaPhylum: ChordataClass: MammaliaSubclass: TheriaInfraclass: EutheriaOrder: ArtiodactylaFamily: BovidaeSubfamily:BovinaeGenus: BosSpecies: Taurus


Falacies

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Exercise 1

Estimation


Anchoring

Answer Luxembourg 550000,

France 67000000 Nobody knows.

Numbers influence even if unrelated even if aware of the influence

The mind likes to reuse.

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Exercise 2

Likelihood


Conjunction Falacy

Estimate plausbility instead of likelihood

More details more plausible less likely

The minds likes associations, stories, plausibility.

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Exercise 3

Prognosis


Substitution

The question:Will Facebook make profit by offering the messenger as separate solution?

Substitute questions: Do I like Facebook? Do I use messengers? ...

The mind likes simplicity.

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Exercise 4

Choice


Endowment

Losses loom higher than gains. Unflexible Risk averse Fearful Status quo is kept

The mind dislikes losses.


Endowment

Homo economicus: It is possible to assign a fixed value to a day of vacation. Meeting this value, the indifference point, selling and buying does not need additional incentives.

A vaction day should have the same value in Euros regardless of whether it is given or taken.

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Exercise 5

Big problems


Availability Bias

Answer: ebola: about 30000 infections dengue fever: about 300000000

infections

WYSIATI: What you see it all there is.

Ease of retrieving an example

Emotional effect

The mind likes availability, drama.

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Exercise 6

Looking back


Unlikely Events

Answer: There is no recordin modern times of any person being killed by a meteorite.

Small probabilities are almost impossible to get right.

The mind likes known unknowns.

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Exercise 7

Looking forward


Unlikely Events

Nobody knows. Did you?

Keep in mind that big asteroids hitearth every few thousand years, possibly near a shore, killing thousands or millions.

The mind does not like large numbers either.

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Exercise 8

Looking at yourself


Overconfidence

The median person drives betterthan 50% of the people.

Fallacy applies to simple tasks.

The mind likes itself.

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Exercise 9

Looking at others

https://www.youtube.com/watch?v=E3h-T3KQNxU


WYSIATI

What you see is all there is.

Information that has not been retrieved from memory might as well not exist.

System 1 excels at constructing the best story with the information currently activated, but does not regard information that it currently does not have.


Miscellanea


Other Effects

Regret

Hindsight

Base rates

Ego depletion

Halo effect

Ignoring regression to the mean

Two selves

Overestimate of validity

To name but a few.


The Book


Daniel Kahneman:Thinking, Fast and Slow

Penguin Books512 pages

ISBN-10: 0141033576ISBN-13: 978-0141033570

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It‘scoffee

machine time.

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fast and slow - how our mind jumps to conclusions

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