Thinking, Fast and Slow

System 1 often overrides System 2, causing faulty judgments due to biases like anchoring and availability.

Understanding these systems’ interaction is critical for mitigating errors in decision-making.

Overconfidence arises from coherent but flawed narratives, ignoring luck or external factors.

Invalid intuitive judgments persist even when contrary evidence is presented.

The illusion of skill in financial markets and expert predictions.

Entrepreneurs often convince themselves that their visions will materialize without considering past failures.

The planning fallacy causes executives to underestimate the resources necessary for a project, often leading to budget overruns.

The first piece of information biases future judgments, even when irrelevant.

Decisions are influenced by how easily examples come to mind, leading to distortions from media coverage or vivid imagery.

Decisions change based on whether options are framed as gains or losses.