Farnam Street
Mastering the best of what other people have already figured out
You don’t have to look hard to find quotes expounding the need for more empathy in society. As with Barack Obama’s quote above, we are encouraged to actively build empathy with others — especially those who are different from us. The …
Decision-making algorithms are undoubtedly controversial. If a decision is being made that will have a major influence on your life, most people would prefer a human make it. But what if algorithms really can make better decisions? *** …
We’re quite glad that you read Farnam Street, and we hope we’re always offering you a massive amount of value. (If not, email us and tell us what we can do more effectively.) But there’s a message all of our readers should appreciate: Blog …
Most of the book Simple Rules by Donald Sull and Kathleen Eisenhardt talks about identifying a problem area (or an area ripe for “simple rules”) and then walks you through creating your own set of rules. It’s a useful …
The book Simple Rules by Donald Sull and Kathleen Eisenhardt has a very interesting chapter on strategy, which tries to answer the following question: How do you translate your broad objectives into a strategy that can provide guidelines …
“Nothing will ever be attempted if all possible objections must first be overcome.” — Samuel Johnson *** In the book Nudge by Richard Thaler and Cass Sunstein they coin the terms ‘Choice Architecture’ and ‘Choice Architect’. For …
On Monday October 28, 1929, the stock market took one of the worst single-day tumbles anyone alive might have seen, with the Dow Jones averages falling about 13%. The next day, October 29th, the market dropped yet again, a decline of 12%. …
In Part 1 of our series on the best-selling negotiation book Getting to Yes, we covered Roger Fisher’s four-part framework on Principled Negotiation — his “way out” of highly contentious negotiation. To review, the four parts were as …
The Federal Aviation Administration had a meeting with Elon Musk they won’t forget. Musk met with them to discuss some approvals for the work one of his companies, SpaceX, was doing. The meeting reads like an episode of Dilbert. The …
One of the best parts of Garrett Hardin‘s wonderful Filters Against Folly is when he explores the three filters that help us interpret reality. No matter how much we’d like it to, the world does not only operate in our circle of …
You would be hard pressed to come across a reading list on behavioral economics that doesn’t mention Nudge: Improving Decisions About Health, Wealth, and Happiness by Richard Thaler and Cass Sunstein. It is a fascinating look at how we can …
We all go through psychological steps when we make big decisions. Some people call this the “existential cycle,” which really has four stages: doing, contemplating, preparing, and experimenting. *** Echoing Tolstoy on regret avoidance, …
In Stronger: Develop the Resilience You Need to Succeed there is a section on the Biological Bases of Human Resilience that is fascinating. It turns out the key to developing resilience at the biological level is to interpret experience in …
Keeping things simple makes a huge difference and yet we are drawn to the sexiness of complexity. Einstein was a master of sifting the essential from the non-essential. And consider this from Charlie Munger: The Complete Investor: Peter …
My favorite chapter in the book Rapt: Attention and the Focused Life by Winifred Gallagher is called ‘Decisions: Focusing Illusions.’ It’s a really great summary of how focusing on the wrong things affects the weights we use to make …
Charlie Munger, the billionaire business partner of Warren Buffett and a major inspiration behind this site, is not only one of the best investors the world has witnessed, but he’s also one of the best thinkers. A quick recap is in …
Charlie Munger, the billionaire business partner of Warren Buffett, frequently tells the story below to illustrate how to distinguish between the two types of knowledge: real knowledge and pretend knowledge. At the 2007 Commencement to the …
In Think Twice: Harnessing the Power of Counterintuition, Mauboussin does a good job adding to the work we’ve already done on complex adaptive systems: You can think of a complex adaptive system in three parts (see the image at the …
Billy Beane was put in the spotlight when Brad Pitt played him in the movie rendition of Moneyball: The Art of Winning an Unfair Game. Sports fans, however, knew long before Moneyball that Beane was special. He’s the guy credited with …
Michael Mauboussin, the first guest on our podcast, The Knowledge Project, explains how our situations influence our decisions enormously in Think Twice: Harnessing the Power of Counterintuition. Mistakes born out of situations are …
“Simple rules are shortcut strategies that save time and effort by focusing our attention and simplifying the way we process information. The rules aren’t universal— they’re tailored to the particular situation and the person using …
As networks harness the wisdom of crowds, the ability of experts to add value in their predictions is steadily declining. This is the expert squeeze. *** In Think Twice: Harnessing the Power of Counterintuition, Michael Mauboussin, the …
This article is a collaboration between Mark Steed and myself. He did most of the work. Mark was a participant at the last Re:Think Decision Making event as well as a member of the Good Judgment Project. I asked him to put together …
Who can you ask for book recommendations on decision making? At Re:Think Decision Making, I asked a crowd that one former ivy league professor called “the best public crowd he’s ever seen” what they would recommend …