POS-4206 Lecture Notes - Lecture 8: Daniel Kahneman
14 Oct 2017
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We jump to conclusions rather than carefully calculate. System 1 uses heuristics, shortcut alternative to full information processing. Heuristics can be useful (think of party id), but can also lead to mistakes. We are quick to assume a pattern, and causation. Gates foundation investing . 7bil to study successful schools. Findings were just due to small samples being more extreme. Anchoring e ect: tendency for the rst piece of information to anchor subsequent responses. The more readily available a similar event is in our memory, the more likely we think the event is. Overestimate probability of plane crashed, underestimate probability of car crashed. Plane crashes get more media than car crashes. How likely is x to occur? is a di cult question. We answer it by thinking how readily examples of x come to mind.
