System I System II associative networks: association carried out subconsciously by System I primed for particular decision or action by system I familiarity illusion: if name was seen before, it is considered familiar and elicits positive response system one is good at detecting abnormalcy and alerting system 2 system one can detect averages and deviation from average system I is quick at recognizing friend/foe based on facial characteristics system I is good at supplying causality or context where there may be none and building a "story" which is approved by system II system II is associated with conscious self, ego system II is usually lazy and relaxed, engaging it, requires significant resource consumption. it can be "depleted": ego depletion system I seeks patterns and constructs them even if none present, quick to jump to conclusions on insufficient data, looks for causes and causal dependency politicians are judged not so much on likability of a face but on strength and trustworthiness this correlation is stronger among people who watch a lot of television - intensity relation: system I task: relating intensity on one scale to another: how much I like the guy --> how effective he is going to be as a leader - halo effect: if one characteristic is good, other are judged better - affect heuristic: one characteristic may affect others, not necessarily related if a product has positive qualities, its negative qualities are diminished - resemblance heuristic: people judge suitably by comparing the individual to the stereotypical person belonging to a particular group - availability heuristic: the event is judged more likely if similar events are easily recalled by memory - availability cascade: sensational events are reported by media, then talked about by people further reported by media until saturation - people tend to focus and demand coverage of events that have emotional resonance, not necessarily most likely or most relevant (media complies) -- then demand government to deal with them - hindsight bias - people tend to form an opinion on the basis of the event and discount the uncertainty about the event as it happen. People tend to not remember their opinions before the event, or rather they assume that their current opinion (colored by the event) was the same all along -- history is a lot messier than it appears afterwards -- studying history to predict the future is a fools errand -- pundits are bad at what they do, especially longer term - outcome bias - the, positive or negative, outcome affects people's judgement of the decision/precedure botched operation is always bad, winers are never wrong - regression to mean: if luck has a significant factor in outcome, then on repeated attempt the outlier is likely to be closer to average: outstandingly bad or good perfromances are unlikely to be repeated. This is checked by correlation between repeated perfromrances - executive competence is only moderately correlated with success of the company (correlation is 0.31) yet, outcome bias tends to ascribe significatly greater degree of dependency - picking stocks is nearly random. Beating markets is nearly impossible. Individual investors are pretty bad at it. - planning fallacy: predicting that a complex project would develop according to plan. Plans tend to be optimistic. Complext construction projects is an example: cost overruns and delays are common. inside/outside view. better idea of project cost/time estimate: consider comparable projects - optimism fallacy: people tend to assume favorable outcomes. CEOs that win awards tend to become over-confident/reckless - there is a resistance to status quo change due to people's try to avoid losses harder than to achieve gains - possibility effect: people value higher the possibility of pleasant (or unpleasant) event however improbable. Hence lotteries - certainty effect: people are willing to pay more than it deserves to completely eliminate the possbility of an unpleasant event. Hence insurance - entitlement effect: -- people are risk seeking when they are choices leading to loss of what (they think) they have -- people are risk averse when the choices are leading to gains: sure thing is preferred - habitual under-exposure to risk, makes one poorer: take a gamble, do not buy insurance - regret - counterfactual interpretation similar to planning, people often act to minimize regret -- system I often supplies alterantive (proved to be better) choices that you have considered and rejected - when regretting, fantacizing, what is being removed/regretted is atypical occurence, substituted by typical by System I - certain gambles are taboo: as in health, children's wellbeing example: -- how much do you pay to cure (a small chance of) a fatal disease you might have contracted -- how much do you need to be paid for work where you may get (a small chance of) a fatal diseast - peak-end effect: humans remember experience (both negative and positive) on the basis of the peak feeling and the ending of it. The duration is not important Due to system 2 which recall typical (representative) state and not got at accummulating experience -- duration neglect - experiential and remembering self -- system I associates itself with remembering self -- experiental self is ignored and even treated as stranger - worthiness of life and life enjoyment are two distinct characteristics - life enjoyment seems to be genetic - after $75K yearly additional money does not add to like enjoyment. Theory: with more things that can be bought, stoped enjoying little things - research on 17 yolds and 20 years afterwards. at 17yo state goals, if money is importan state so. Re-evalute late. If achieve money, greater worthiness of life, if not greater misery. In general, life worthiness is evaluated according to goals set earlier in life. If goals hard to achieve, such as success in perfromance arts, less life worthiness