Key take aways from “Gut Feelings”

  • Gut feelings definition
    • appears quickly in consciousness
    • underlying reasons we are not fully aware of
    • strong enough to act upon
  • Laws in the real world are different from those in the logical idealized world
  • Benjamin Franklin’s Moral Algebra
    • when in doubt weigh out the pros and cons of each side by cancelling out the pros that might weigh the same
  • Our brain
    • adaptive forgetting: data is destroyed with the aggregation of information into actionable insights
    • We can only decipher the output generated by our brain (a neural network) but cannot decipher the series of logical steps taken to derive this output
    • Deliberate thinking about reasons seems to lead to decisions that make us less happy
    • Thinking too much can slow down and disrupt performance
      • The gaze heuristics for catching baseball
    • the more complex a species the longer the period of infancy
    • The short term memory rule of 7 +/- 2
    • Intelligence means making bets, taking risk seeing more than what the eye sees
  • Satisfisers versus Maximizers
    • former is reported to be more optimistic, higher self-esteem and life satisfaction
  • Rule: Create scarcity and develop systematically
    • is a viable alternative in human and organizational development
  • Less is more
    • Stock picking of familiar stocks (partial ignorance) still out perform complex analysis (extensive knowledge)
  • Man and his environment
    • Herbert Simon: A man, viewed as a behaving system, is quite simple. The apparent complexity of his behavior over time is largely a reflection of the complexity in the environment he finds himself
    • ┬áSteve Jobs, structured work place to maximize chance conversations
    • In an uncertain environment good intuitions must ignore information
    • Quality heuristics: we equate recognition to quality – Goldstein and Gigerenzer, 2002
      • why marketing might work in short run despite shitting products
    • One-reason decision making – a short cut people use despite official guidelines
      • implies a fast and frugal decision tree

References

  • Simple rules for a complex world, Epstein

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