I enjoy being active, but I look forward to the day when I can retire to the Internet.
— Daniel Kahneman
Human beings cannot comprehend very large or very small numbers. It would be useful for us to acknowledge that fact.
Most successful pundits are selected for being opinionated, because it's interesting, and the penalties for incorrect predictions are negligible. You can make predictions, and a year later people won't remember them.
Employers who violate rules of fairness are punished by reduced productivity, and merchants who follow unfair pricing policies can expect to lose sales.
Organizations may be better able to tame optimism than individuals are.
Optimism is normal, but some fortunate people are more optimistic than the rest of us. If you are genetically endowed with an optimistic bias, you hardly need to be told that you are a lucky person - you already feel fortunate.
Divorced women, compared to married women, are less satisfied with their lives, which is not surprising. But they're actually more cheerful, when you look at the average mood they're in in the course of the day.
Although professionals are able to extract a considerable amount of wealth from amateurs, few stock pickers, if any, have the skill needed to beat the market consistently, year after year.
Adaptation seems to be, to a substantial extent, a process of reallocating your attention.
Courage is willingness to take the risk once you know the odds. Optimistic overconfidence means you are taking the risk because you don't know the odds. It's a big difference.
Psychologists really aim to be scientists, white-coat stuff, with elaborate statistics, running experiments.
In a rising market, enough of your bad ideas will pay off so that you'll never learn that you should have fewer ideas.
Many ideas happen to us. We have intuition, we have feeling, we have emotion, all of that happens, we don't decide to do it. We don't control it.
People should be conscious of the large contribution made by anything that gets people together easily in the reduction of loneliness and emotional well-being.
It's nonsense to say money doesn't buy happiness, but people exaggerate the extent to which more money can buy more happiness.
Economists think about what people ought to do. Psychologists watch what they actually do.
Yes, there is a burden of financial insecurity. I don't think you find it in mood. Income is correlated with life satisfaction, so maybe you do find it in life satisfaction. You don't find it in mood, and I think it is very important.
After a crisis we tell ourselves we understand why it happened and maintain the illusion that the world is understandable. In fact, we should accept the world is incomprehensible much of the time.
I'm not a great believer in self-help.
Political columnists and sports pundits are rewarded for being overconfident.
Negotiations over a shrinking pie are especially difficult because they require an allocation of losses. People tend to be much more easygoing when they bargain over an expanding pie.
In essence, the optimistic style involves taking credit for successes but little blame for failures.
My impression is that the elimination of memories greatly reduces the value of the experience.
There's a very good reason for why economics developed the way it did, and that is that in many situations, the assumption that people will exploit the opportunities available to them is very plausible, and it simplifies the analysis of how markets will behave.
You know, the standard state for people is 'mildly pleasant.' Negative emotions are quite rare, and extremely positive emotions are rare. But people are mildly pleased most of the time, they're mildly tired a lot of the time, and they wish they were somewhere else a substantial part of the time - but mostly they're mildly pleased.
We know that the French are very different from the Americans in their satisfaction with life. They're much less satisfied. Americans are pretty high up there, while the French are quite low - the world champions in life satisfaction are actually the Danes.
It's a wonderful thing to be optimistic. It keeps you healthy and it keeps you resilient.
We're beautiful devices. The devices work well; we're all experts in what we do. But when the mechanism fails, those failures can tell you a lot about how the mind works.
It doesn't take many observations to think you've spotted a trend, and it's probably not a trend at all.
Banks are run by executives, and executives protect themselves, and that does not always mean that banks are going to behave rationally.
For many people, commuting is the worst part of the day, and policies that can make commuting shorter and more convenient would be a straightforward way to reduce minor but widespread suffering.
Happiness is determined by factors like your health, your family relationships and friendships, and above all by feeling that you are in control of how you spend your time.
We have associations to things. We have, you know, we have associations to tables and to - and to dogs and to cats and to Harvard professors, and that's the way the mind works. It's an association machine.
There is research on the effects of 9/11, and you know, compared to the enormity of it, it didn't have a huge effect on people's mood. They were going about their business, mostly.
It was always assumed I would be a professor. I grew up thinking it.
We're blind to our blindness. We have very little idea of how little we know. We're not designed to know how little we know.
I have always emphasized the willingness to discard.
The brains of humans contain a mechanism that is designed to give priority to bad news.
Optimistic people play a disproportionate role in shaping our lives. Their decisions make a difference; they are inventors, entrepreneurs, political and military leaders - not average people. They got to where they are by seeking challenges and taking risks.
People are really happier with friends than they are with their families or their spouse or their child.
True intuitive expertise is learned from prolonged experience with good feedback on mistakes.
There's a lot of randomness in the decisions that people make.
Except for some effects that I attribute mostly to age, my intuitive thinking is just as prone to overconfidence, extreme predictions, and the planning fallacy as it was before I made a study of these issues.
If you think in terms of major losses, because losses loom much larger than gains - that's a very well-established finding - you tend to be very risk-averse. When you think in terms of wealth, you tend to be much less risk-averse.
If owning stocks is a long-term project for you, following their changes constantly is a very, very bad idea. It's the worst possible thing you can do, because people are so sensitive to short-term losses. If you count your money every day, you'll be miserable.
We think, each of us, that we're much more rational than we are. And we think that we make our decisions because we have good reasons to make them. Even when it's the other way around. We believe in the reasons, because we've already made the decision.
I think one of the major results of the psychology of decision making is that people's attitudes and feelings about losses and gains are really not symmetric. So we really feel more pain when we lose $10,000 than we feel pleasure when we get $10,000.
Poverty is clearly one source of emotional suffering, but there are others, like loneliness. A policy to reduce the loneliness of the elderly would certainly reduce suffering.
An investment said to have an 80% chance of success sounds far more attractive than one with a 20% chance of failure. The mind can't easily recognize that they are the same.
Most of the time, we think fast. And most of the time we're really expert at what we're doing, and most of the time, what we do is right.
