Chronique littéraire 12.2

This is the follow-up article of chronique littéraire 12.1 on Thinking, Fast and Slow by Daniel Kahneman.

–“If you visit a courtroom you will observe that lawyers apply two styles of criticism: to demolish a case they raise doubts about the strongest arguments that favor it; to discredit a witness, they focus on the weakest part of the testimony.”

-“Subjects' unwillingness to deduce the particular from the general is matched only by their willingness to infer the general from the particular”

–“Confidence is a feeling, which reflects the coherence of the information and the cognitive ease of processing it.”

-“Success = talent + luck / Great success = a little more talent + a lot of luck”

–“The idea that large historical events are determined by luck is profoundly shocking, although it is demonstrably true.”

-“The statement 'Hitler loved dogs and little children” is shocking no matter how many times you hear it, because any trace of kindness in someone so evil violates the expectations set up by the Halo effect”

–“Those who know more, forecast very slightly better than those who know less. But hose with the most knowledge are often less reliable. The reason is that the person who acquires more knowledge develops an enhanced illusion of her skill and becomes unrealistically confident”

–“Marital stability is well predicted by the formula : [frequency of lovemaking] – [frequency of quarrels]. You don't want your result to be a negative number”

–“The two basic conditions to acquire a skill are an environment that is sufficiently regular to be predictable, and an opportunity to learn those regularities through prolonged practice. When both these conditions are satisfied, intuitions are likely to be skilled.”

–“Overly optimistic forecasts of the outcome of projects are found everywhere”

–“a CFO who informs his/her colleagues that 'there is a good chance that the S&P returns will be between -10% and +30%' can expect to be laughed out of the room. The wide confidence interval is a confession of ignorance, which is not socially acceptable for someone who is paid to be knowledgeable in financial matters.[...] confidence is valued over uncertainty. An unbiased perception of uncertainty is a cornerstone of rationality. But it is not what people and organizations want”

–“Subjective confidence is determined by the coherence of the story one has constructed, not by the quality and amount of the information that supports it”

–“A risk-averse decision-maker will choose a sure thing that is less than expected value, in effect paying a premium to avoid the uncertainty.”