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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.

Daniel Kahneman

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Daniel Kahneman
Age: 90
Born: 1934
Born: March 5
Economist
Psychologist
University Teacher
Tel Aviv
Israel
D Kahneman
Available
Markets
Situation
Assumption
Opportunity
Situations
Reason
Developed
Simplifies
Many
Analysis
Exploit
Way
Behave
Plausible
Good
Opportunities
Exploits
People
Economics
Simplify

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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.
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It doesn't take many observations to think you've spotted a trend, and it's probably not a trend at all.
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Hindsight bias makes surprises vanish.
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Overconfidence is a powerful source of illusions, primarily determined by the quality and coherence of the story that you can construct, not by its validity.
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The dominance of conclusions over arguments is most pronounced where emotions are involved.
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We can be blind to the obvious, and we are also blind to our blindness.
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It's clear that policymakers and economists are going to be interested in the measurement of well-being primarily as it correlates with health they also want to know whether researchers can validate subjective responses with physiological indices.
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You are more likely to learn something by finding surprises in your own behavior than by hearing surprising facts about people in general.
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A person who has not made peace with his losses is likely to accept gambles that would be unacceptable to him otherwise.
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The illusion that we understand the past fosters overconfidence in our ability to predict the future.
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People just hate the idea of losing. Any loss, even a small one, is just so terrible to contemplate that they compensate by buying insurance, including totally absurd policies like air travel.
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People like leaders who look like they are dominant, optimistic, friendly to their friends, and quick on the trigger when it comes to enemies. They like boldness and despise the appearance of timidity and protracted doubt.
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Intelligence is not only the ability to reason it is also the ability to find relevant material in memory and to deploy attention when needed.
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We can't live in a state of perpetual doubt, so we make up the best story possible and we live as if the story were true.
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This is the essence of intuitive heuristics: when faced with a difficult question, we often answer an easier one instead, usually without noticing the substitution.
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Political columnists and sports pundits are rewarded for being overconfident.
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If you're going to be unreligious, it's likely going to be due to reflecting on it and finding some things that are hard to believe.
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People exaggerate their confidence in their plans - something we call the planning fallacy... The existence of the plan tends to induce overconfidence.
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Psychologists really aim to be scientists, white-coat stuff, with elaborate statistics, running experiments.
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What happens with fear is that probability doesn't matter very much. That is, once I have raised the possibility that something terrible can happen to your child, even though the possibility is remote, you may find it very difficult to think of anything else. Emotion becomes dominant.
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