Quotes by Daniel Kahneman

“The brains scientists are the wave of the future in the financial world. Youd better pay very serious attention to them.”

“The brain scientists are the wave of the future in the financial world. If you seek to maximize understanding, whether youre in academia or in the investment community, youd better pay serious attention to them.”

Money does not buy you happiness, but lack of money certainly buys you misery.

A reliable way to make people believe in falsehoods is frequent repetition, because familiarity is not easily distinguished from truth. Authoritarian institutions and marketers have always known this fact.

We all care intensely for the narrative of our own life and very much want it to be a good story, with a decent hero.

The world makes much less sense than you think. The coherence comes mostly from the way your mind works.

...the characters are useful because of some quirks of our minds, yours and mine. A sentence is understood more easily if it describes what an agent (system 2) does than if it describes what something is, what properties it has.

The premise of this book is that it is easier to recognize other peoples mistakes than our own.

Characteristics of System 1: • generates impressions, feelings, and inclinations; when endorsed by System 2 these become beliefs, attitudes, and intentions • operates automatically and quickly, with little or no effort, and no sense of voluntary control • can be programmed by System 2 to mobilize attention when a particular pattern is detected (search) • executes skilled responses and generates skilled intuitions, after adequate training • creates a coherent pattern of activated ideas in associative memory • links a sense of cognitive ease to illusions of truth, pleasant feelings, and reduced vigilance • distinguishes the surprising from the normal • infers and invents causes and intentions • neglects ambiguity and suppresses doubt • is biased to believe and confirm • exaggerates emotional consistency (halo effect) • focuses on existing evidence and ignores absent evidence (WYSIATI)• generates a limited set of basic assessments • represents sets by norms and prototypes, does not integrate• matches intensities across scales (e.g., size to loudness) • computes more than intended (mental shotgun) • sometimes substitutes an easier question for a difficult one (heuristics) • is more sensitive to changes than to states (prospect theory)* • overweights low probabilities* • shows diminishing sensitivity to quantity (psychophysics)* • responds more strongly to losses than to gains (loss aversion)* • frames decision problems narrowly, in isolation from one another*

You think with your body, not with your brain.

If you care about being thought credible and intelligent, do not use complex language where simpler language will do. My Princeton colleague Danny Oppenheimer refuted a myth prevalent among undergraduates about the vocabulary that professors find most impressive. In an article titled Consequences of Erudite Vernacular Utilized Irrespective of Necessity: Problems with Using Long Words Needlessly, he showed that couching familiar ideas in pretentious language is taken as a sign of poor intelligence and low credibility.

The law (of least effort) asserts that if there are several ways of achieving the same goal, people will eventually gravitate to the least demanding course of action. In the economy of action, effort is a cost, and the acquisition of skill is driven by the balance of benefits and costs. Laziness is built deep into our nature.

Jumping to conclusions is efficient if the conclusions are likely to be correct and the costs of an occasional mistake acceptable. Jumping to conclusions is risky when the situation is unfamiliar, the stakes are high and there is no time to collect more information.

The test of learning psychology is whether your understanding of situations you encounter has changed, not whether you have learned a new fact.

The idea that the future is unpredictable is undermined every day by the ease with which the past is explained.

Mood evidently affects the operation of System 1: when we are uncomfortable and unhappy, we lose touch with our intuition. These findings add to the growing evidence that good mood, intuition, creativity, gullibility, and increased reliance on System 1 form a cluster. At the other pole, sadness, vigilance, suspicion, an analytic approach, and increased effort also go together. A happy mood loosens the control of System 2 over performance: when in a good mood, people become more intuitive and more creative but also less vigilant and more prone to logical errors.

The Instagram Generation now experiences the present as an anticipated memory.

Odd as it may seem, I am my remembering self, and the experiencing self, who does my living, is like a stranger to me.

Most important, of course, we all care intensely for the narrative of our own life and very much want it to be a good story, with a decent hero.

Nothing in life is as important as you think it is when you are thinking about it.