Unlikely Optimism: The Conjunctive Events Bias
When certain events need to take place to achieve a desired outcome, we’re overly optimistic that those events will happen. Here’s why we should temper those expectations. *** Why are we so optimistic …
Daniel Kahneman
The Inner Game: Why Trying Too Hard Can Be Counterproductive
The standard way of learning is far from being the fastest or most enjoyable. It’s slow, makes us second guess ourselves, and interferes with our natural learning process. Here we explore a better way …
Survivorship Bias: The Tale of Forgotten Failures
Survivorship bias is a common logical error that distorts our understanding of the world. It happens when we assume that success tells the whole story and when we don’t adequately consider past …
The Lies We Tell
We make up stories in our minds and then against all evidence, defend them tooth and nail. Understanding why we do this is the key to discovering truth and making wiser decisions. *** Our brains are …
Complexity Bias: Why We Prefer Complicated to Simple
Complexity bias is a logical fallacy that leads us to give undue credence to complex concepts. Faced with two competing hypotheses, we are likely to choose the most complex one. That’s usually the …
Do Algorithms Beat Us at Complex Decision Making?
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 …
Blog Posts, Book Reviews, and Abstracts: On Shallowness
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 …
Daniel Kahneman on Human Gullibility
“The premise of this book is that it is easier to recognize other people’s mistakes than our own.” *** A simple article connecting two ideas from Daniel Kahneman’s Thinking …
Mental Model: Bias from Conjunction Fallacy
The bias from conjunction fallacy is a common reasoning error in which we believe that two events happening in conjunction is more probable than one of those events happening alone. Here’s why this …
Avoiding Falling Victim to The Narrative Fallacy
The narrative fallacy leads us to see events as stories, with logical chains of cause and effect. Stories help us make sense of the world. However, if we’re not aware of the narrative fallacy it can …
Confidence and Validity
Santa Fe Institute Board of Trustees Chair Michael Mauboussin interviewed Nobel Prize winner Daniel Kahneman. The wide-ranging conversation talks about disciplined intuition, causality, base rates, …
How Analogies Reveal Connections, Spark Innovation, and Sell Our Greatest Ideas
Analogies are a means of drawing a parallel between two different things which we often use to convey complex ideas and to communicate effectively. We often use analogies to aid our reasoning. In this …
The Psychology of Risk and Reward
An excerpt from The Aspirational Investor: Taming the Markets to Achieve Your Life’s Goals that I think you’d enjoy. Most of us have a healthy understanding of risk in the short term. When …
Focusing Illusions
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 …
Mental Model: Misconceptions of Chance
We expect the immediate outcome of events to represent the broader outcomes expected from a large number of trials. We believe that chance events will immediately self-correct and that small sample …
Regression Toward the Mean: An Introduction with Examples
Regression to the mean is a common statistical phenomenon that can mislead us when we observe the world. Learning to recognize when regression to the mean is at play can help us avoid misinterpreting …