Thinking, Fast and Slow. 30. Rare Events

Following the schedule of our Reading Calendar

Well, here we are again dealing again with a real bias. And by that I mean a psychological characteristic of humans that provokes decisions that can be harming to themselves. We are talking here about the tendency to overestimate and overweight very unlikely events.

This is a natural tendency difficult to overcome even when we are perfectly conscious of its presence and of the absurdity of our behavior. Kahneman explains his experience with buses in Israel but I am sure that everyone of us can come up with similar stories in their private lives.

The central point of the chapter is that this probability insensibility (by overestimating or neglecting) is the result of the general biases of our system 1: cognitive ease, availability bias and confirmatory bias. Particularly, the most important point is the vividness that we attribute to the image of the rare event than we are judging. Events that can be clearly and vividly presented generate a response of our system 1 that contributes to the overweighting of that event. That is the case, for example, of the “denominator neglect”, because system 1 understands cases and individuals much better that percentages and statistics.

This knowledge creates tools for manipulation and deceptiveness. The way how a case is presented has a big influence in generating or not an overreaction to a rare event.

Its interesting the different response of subject studies to what is called here “choice from experience” and “choice from description”. Once again it goes to the question, that we have commented previously, of how much of this problems and biases are real problems in decision making or are artefacts that appear only when a verbal interpretation of the choices mediates in the decision process.

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One thought on “Thinking, Fast and Slow. 30. Rare Events

  1. In the book there is a peculiar mix of real biases as a result of misunderstanding of probability and statistics and pseudo-biases in which people make a rational choice but not the one that a mathematician would expect.
    The flaw here is that Kahneman doesn’t offer us a way to tell one from the other. When it is really critical to use probabilities and statistics to make a decision and when our system 1 is good enough to make a decision based on simple heuristics?
    There is also the lack of novelty issue. I have the impression that most of the interesting stuff has already been said. These last chapters are re-elaborations of things already discussed, and are here because some sort of systematic approach that evades me. I’m starting to look forward to finish the book.

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