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In memory of Amos Tversky

Contents

Introduction

Part I. Two Systems

1. The Characters of the Story

2. Attention and Effort

3. The Lazy Controller

4. The Associative Machine

5. Cognitive Ease

6. Norms, Surprises, and Causes

7. A Machine for Jumping to Conclusions

8. How Judgments Happen

9. Answering an Easier Question

Part II. Heuristics and Biases

10. The Law of Small Numbers

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11. Anchors

12. The Science of Availability

13. Availability, Emotion, and Risk

14. Tom W’s Specialty

15. Linda: Less is More

16. Causes Trump Statistics

17. Regression to the Mean

18. Taming Intuitive Predictions

Part III. Overconfidence

19. The Illusion of Understanding

20. The Illusion of Validity

21. Intuitions Vs. Formulas

22. Expert Intuition: When Can We Trust It?

23. The Outside View

24. The Engine of Capitalism

Part IV. Choices

25. Bernoulli’s Errors

26. Prospect Theory

27. The Endowment Effect

28. Bad Events

29. The Fourfold Pattern

30. Rare Events

31. Risk Policies

32. Keeping Score

33. Reversals

34. Frames and Reality

Part V. Two Selves

35. Two Selves

36. Life as a Story

37. Experienced Well-Being

38. Thinking About Life

Conclusions

Appendix

Uncertainty

A:

Judgment

Appendix B: Choices, Values, and Frames

Acknowledgments

Notes

Index

Under

Introduction

Every author, I suppose, has in mind a setting in which readers of his or her

work could benefit from having read it. Mine is the proverbial office

watercooler, where opinions are shared and gossip is exchanged. I hope

to enrich the vocabulary that people use when they talk about the

judgments and choices of others, the company’s new policies, or a

colleague’s investment decisions. Why be concerned with gossip?

Because it is much easier, as well as far more enjoyable, to identify and

label the mistakes of others than to recognize our own. Questioning what

we believe and want is difficult at the best of times, and especially difficult

when we most need to do it, but we can benefit from the informed opinions

of others....