# [[Thinking, Fast and Slow - reference]] ![[Thinking, Fast and Slow - reference.svg]] ## Shortform 1-page summary Two systems of the mind - System 1 or [[Fast Thinking]]: operational, intuitive, effortless, sometimes involuntary - System 2 or [[Slow Thinking]]: methodical, systematic, analytical, effortful When Fast Thinking's intuitions are supported by Slow Thinking, the intuitions are turned into beliefs, and then later actions. [[Cognitive Biases]] occur when Fast Thinking substitutes a hard question (that it can't answer) with an easier one (that it can). - [[Confirmation bias]]: Looking for information that supports your hypothesis, rather than leaving your search open-ended - [[Ignoring reversion to the mean]]: Seeking explanations for why things change without remembering that over time, things gravitate towards the mean outcome just because of statistics - [[Anchoring bias]]: When a question is presented with a number, that number tends to influence our response even if it's completely irrelevant. - [[Representativeness]]: Creating and believing in stereotypes of people and ideas instead of trying to understand them in their entirety. - [[Availability bias]]: Weighing vivid, emotional, and recent experiences more heavily than others [[Prospect theory]] - Prospect theory states that an evaluation of [[Utility]] depends not just on the current state but also on the *changes* from the current state. The utility of a change is judged not in absolute terms, but in relative terms based on your current perspective. - In opposition to traditional [[Expected Utility Theory]], which treats people as rational agents that seek to maximize utility absolutely. 1. *When you evaluate a situation, you compare it to a neutral reference point.* : The neutral reference point is usually the status quo but sometimes it's also an expected status quo. 2. *Diminishing marginal utility applies to changes in wealth (and to sensory inputs).* The more you have, the less significant the change feels. 3. *Losses hurt more than gains.* A loss of a certain amount is more painful to contemplate than a gain of the same amount is pleasurable. Cognitive biases that arise from prospect theory: - [[Possibility Effect]]: We irrationally prefer the possibility of gaining something and avoid the possibility of losing something, no matter how small the possibility is. - [[Status quo bias]]: We try to preserve what we already have, even if it isn't actually so important to us. - [[Framing Effects]]: Losses and gains can't be looked at logically. The circumstances and the stories we tell about the reasons behind those losses and gains affect how we feel about them. [[Happiness]] can occur to one of two selves: - [[The Experiencing Self]]: the part of us that is living fully in the moment - [[The Remembering Self]]: the part of us that reflects on past experiences and thinks about how happy (or not) they've made us The Remembering Self evaluates things differently from the Experiencing Self in two ways: 1. [[Peak-end rule]]: Peak intensity of the experience and the end of the experience 2. [[Duration neglect]]: How long something lasts is irrelevant to the Remembering Self's memory of the experience We tend to prioritize the Remember Self over the Experiencing Self, but Kahneman suggests we should weight the Experiencing Self more by: - Maximising things that give us momentary pleasures and minimising things that give us momentary pain (ex: reduce our commutes) - Spend more time in active pleasure activities like socialising and exercising When we forecast our future happiness, we think our Remembering Self will think or remember an experience more negatively than it actually does. In reality, we are more adaptable than that-- our Remembering Self often actually cares less about it than we think. ## Introduction > This is the essence of intuitive heuristics: when faced with a difficult question, we often answer an easier one instead, usually without noticing the substitution. ## Part 1: Two Systems ### Chapter 1: The Characters of the Story ![[thinking fast and slow - chapter 1.excalidraw]] ![[vn-2025-06-26 Understanding System 1 and System 2 thinking]] ### Chapter 2: Attention and Effort ![[Thinking, Fast and Slow - chapter 2.excalidraw]] ![[vn-2025-06-30 Effort and energy in system two thinking]] Engaging System 2 is preferable, but it takes a lot of attention and effort, both of which we have a limited budget of. When we are already spending our attention and effort elsewhere, it's difficult to participate in System 2 thinking and we fall back to System 1. The effort could be: - physical (we're sick or have engaged in strenuous physical activity) - emotional (we're stressed from other intense issues in our life) - cognitive (we're already thinking about a hard problem) - self-control (if we're already resisting temptation on something, we find it hard to resist temptation in other things) ### Chapter 3: The Lazy Controller [[Ego depletion]] occurs when we run out of our effort budget and can no longer spend effort on a new task, so we engage our System 1 instead. We can avoid ego depletion by: - Getting more skilled at the task. - Entering a [[Flow state]]. - Setting incentives or rewards for ourselves - Eating: System 2 requires more [[Glucose]] than System 1. - Playing computer games requiring attention and control [[Cognitive Ease]] is an internal measure of our mental effort. When we have high cognitive ease, we're able to engage System 2. These are things that can increase cognitive ease: - *Repeated experience*: Exposing yourself to something makes you like it more. - *Clear display*: Making sure the message is readable and well-formatted will make it more convincing. Rhymes and mnemonic devices also help things stick. - *Primed idea*: [[Priming]] yourself with a smaller, simpler idea helps you digest similar but slightly more complicated ones. - *Good mood*: Being in a positive emotional state makes it easier for you to learn something. [[Intelligence]] is not just rational ability; it's the ability to switch between intuition (System 1) and rationality (System 2) based on the requirements of the task and the available effort to spend on it. ### Chapter 4: The Associative Machine ### Chapter 5: Cognitive Ease ### Chapter 6: Norms, Surprises, and Causes ### Chapter 7: A Machine for Jumping to Conclusions ### Chapter 8: How Judgments Happen ### Chapter 9: Answering an Easier Question ## Part II: Heuristics and Biases ### Chapter 10: The Law of Small Numbers ![[vn-2025-07-18 The law of small numbers and its implications]] ### Chapter 11: Anchors ![[vn-2025-07-22 Anchoring effect and effortful adjustment in decision making]] ### Chapter 12: The Science of Availability ### Chapter 13: Availability, Emotion, and Risk ### Chapter 14: Tom W's Specialty ### Chapter 15: Linda: Less is More ### Chapter 16: Causes Trump Statistics ### Chapter 17: Regression to the Mean ### Chapter 18: Taming Intuitive Predictions ## Part III: Overconfidence ### Chapter 19: The Illusion of Understanding ### Chapter 20: The Illusion of Validity ### Chapter 21: Intuitions vs. Formulas ### Chapter 22: Expert Intuition: When Can We Trust It? ### Chapter 23: The Outside View ### Chapter 24: The Engine of Capitalism ## Part IV: Choices ### Chapter 25: Bernoulli's Errors ### Chapter 26: Prospect Theory ### Chapter 27: The Endowment Effect ### Chapter 28: Bad Events ### Chapter 29: The Fourfold Pattern ### Chapter 30: Rare Events ### Chapter 31: Risk Policies ### Chapter 32: Keeping Score ### Chapter 33: Reversals ### Chapter 34: Frames and Reality ## Part V: Two Selves ### Chapter 35: Two Selves ### Chapter 36: Life as a Story ### Chapter 37: Experienced Well-Being ### Chapter 38: Thinking About Life ## Conclusions ## Related - [[Thinking, Fast and Slow]] - My raw highlights on Readwise - %% # Excalidraw Data ## Text Elements ## Embedded Files a7ad8e6fd7b0d1be47ac12a10d200b07fabc6549: [[thinking fast and slow - chapter 1.excalidraw.svg]] ada23ecf481a7583ba5d3a7c0aa4614fa37428e8: [[Thinking, Fast and Slow - chapter 2.excalidraw.svg]] ## Drawing ```compressed-json N4KAkARALgngDgUwgLgAQQQDwMYEMA2AlgCYBOuA7hADTgQBuCpAzoQPYB2KqATLZMzYBXUtiRoIACyhQ4zZAHoFAc0JRJQgEYA6bGwC2CgF7N6hbEcK4OCtptbErHALRY8RMpWdx8Q1TdIEfARcZgRmBShcZQUebQBGOIAWGjoghH0EDihmbgBtcDBQMBKIEm4IAGULfAAhbAA1SVSSyFhECsJ9aKR+UsxuZx54gFZtAGYeAA4p+IA2JPjxqYB2 AE4kvsgYQdntFbmVkamRo6TxjZHxrYgKEnVuEYAGJ+0X94+PuZvJBEJlaTceJJNbaEZJHjDFYrF5rUbfQqQazKYLcJ43ZhQUhsADWCAAwmx8GxSBUsdZmHBcIFsi1SppcNgccpsUIOMRCcTSRJyRxKdSslA6ZAAGaEfD4SqwVESSSMjSBYUQTHYvEAdXuzTQ8QxWNxCClMBl6EEHiVrIBHHCuW1NzYVOwah22peN1Z7KtzBtqA4QglGIQCGI3BOx zWN0YLHYXDQcxGEaYrE4ADlOGIgU85i9ZnNITchHBiLgoEGgUdEtD5kknuN44iyswACLpEvBtAighhG4s4RwACSxG9eQAujdNMJ2QBRYKZbJD0f1ogcHHcX3+xdsJml9udhA3MXBAcVXArXDEKYIOYi4grTRPYjxTQIJKn7CJXDxe88F53lYdzTYHGIJKsw7jiKgBStGAOqItBiILq0ZTslgx5PBAhQAL59MUpTlBI+h9pUAAqzAjJUADiCDkfoS QAIKNoQACqPBGAAEgAjnASrtOBECBNgUQcCivT1gMaBDDwoJPPMaw8IcQGLOG9bOqgzhrCs+xPM8JxnBcSRXDcdzEA8aDgmM6kWSs4xzJMsx8PWvz/IC2pTKCKwzBC8zjE8JxrMsNzIsa6L1iq+qciSFQAMTxAgMUxUqDJMj2bIckSEU8uQfJUjSQr7uKkrSrxprlLqqoIBqxlarwpX6oaxrKkSJX1hakiet6MGIfajJOhmwWIcl/aDvkCGlCK5C ZEeaBrvgNyEMhYnoB+5oTsQbXcDhpQ8dw4yIlhIWBm2qCJGs0njGdeb1pGSYxqgMIJlGKZpuBIxzPEsmSeCs1Ni226oB2+BdvW44pdOGSCt6035oWxa/fE5Y8JWcyrCMHWlEuK5TX6M0bluh3/WEmHYfWeGLbRhArAAMgACvEbDcfAvFdD0SoLc4b1xKs8Rw0kdnjDJNwqcC8QJC8PAQq9L5JK9hmao8roOX8AJCmgYtxHMaynFc6xTN+UxPPZiG BeBfWlKFeLhdy6C8vyOUJYyzLuqlXJkplNuCkqB4FUavFytgCoiYhZvlbLtohXqeJ1UVjXBm6wiWtaQJ2g6PUuibkCO2tmProHB0hiMawnPd11AocRfRqmHDpmgGwXH5IKbPWBZFq2ZYowjKzfsMclfc2wQtzuAN7vWA0DvOY4raDs45MNNzo6uWOz5ueJ47ueWHodEBnrgPDjAg2Aijz8Qnsc4wMiMxDjCe2BPLguBS8CHbjCsEIXlMIFgfksGo yU8TwbN83Hh4OhEoe0SgbTKBvG8pAABKjYeAAA1Jz4gAFpwCeGqAA+mweglR9ArGgSMemHQJD8UEsJFmgwd7CzWAXA4MxMz6SOAbUogs3r7A2HCCE+kszghWDLSqjxDhgghJMdyetfIN0Qo5JW3AEZJAmEjKWslljTESHWQ2Qkgo1XNmlS2EBoqxUMXbJKjsLYuwpNld2a8vb1WKjHMOZUKomWqg42qhUKh2OWn4VqCdQ6dWTrAXq3ZWSDTHvWMa uAJqHUhsTABEhcDjC8R6XxqANptAZttXaAZYbuThMMNODBEzRiBN+Muj1K7gRsqLV6Bce4/RXoPceIMZzg3ntnUoTcYaHThm3aEndEgIkQnPLO2MhlL1+vjBAmFwAIU3nAOAUoYbrUKNAX4mQKhEBkX0BghAEAUFqPbZK7IzESEiiKc5Fy6QQGwCIHKfYSz6ClGVE56ADFxQDpAG5pA7kPIOSYlaLzoCu0sbSbZXyfkZAAGL5Ujh46OVzwWCnuRk J5+onFVWYdc25SKHmooju4iQniwXYuyMi/Q0C44+K9InFZiLSUPIAPIBMFvLUodKoBkshZwKAkLInihUuoz5JKOUPK5dkSohAjDgVKbS4VZKiJYCgLRTZN0IDBBFLlWV3ycUoqiKQJV3y2AUF+GeNpoyhXavpRkSc7JaKGuNSEDe1JsRUGJZakVGQ7UuqIhkkhK0rmgWxBKeB3AX7sJ3ifAu5wjjbMDUSfAABNWRcltAvlkrMRIPARgn0FRAIwbA DDLMQvQAgQhwK/xAW6iF5KVqZ3QI7K5LISASqlbIk2EAm3EClAgLipltmdoALJsGIAgG1uBNDBAaYDUonaXngNqESDepBlAMgABRQmoLwOGm6N2oFeCMAAlEqaBCBlB+mpBUZda6d7ol4N5Hd9691giPYTLVOU8UICZVAaMEMF4rIiZkE9yFSBzWUEW0oWRx2Tu4FiMtNxsBEF7agWDQ9EIcEieBFDdohBQCXJh0gZbX2lDsAAKz3jkSo6G4BDpH WOidEzV4rMZN+xgREC34HA+k4hJp0gCWKfBoQmIDA+u4zEsZuNuCTP3NiR5vHv2cEk4xoZoQlV8dY+xs10ywCgIgAecI60MIgAwkAA== ``` %%