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Why Smart People Are Stupid
Mental shortcuts
We’re not nearly as rational as we like to believe. When we face an uncertain situation, we fail to evaluate the information or to look up relevant statistics carefully.
Instead, we depend on our mental shortcuts which may lead us to make rash decisions.
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Mental shortcuts
We’re not nearly as rational as we like to believe. When we face an uncertain situation, we fail to evaluate the information or to look up relevant statistics carefully.
Instead, we depend on our mental shortcuts which may lead us to make rash decisions.
Smart people and biases
We often assume that intelligence guards against bias. Its why those with higher S.A.T. scores think they are less likely to make universal thinking mistakes.
However, smarter people are more vulnerable to these thinking errors.
Biases and human intelligence
- People who are aware of their own biases are not better able to overcome them. Our intuitive thinking is just as prone to overconfidence, extreme predictions, and the planning fallacy.
- According to scientists, intelligent people have a larger bias blind spot. They can spot systematic flaws in others, but not in themselves. They will excuse their own minds but harshly judge the minds of other people.
The root causes of our irrationality
When we assess ourselves for biases, we tend to engage in elaborate introspection. The problem with the introspection approach is that the driving forces behind biases remain largely invisible to self-analysis and t is also impermeable to intelligence.
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The conjunctive events bias
We often overestimate the likelihood of events that must happen in conjunction with one another.
We are optimistic in our estimation of the cost and schedule and surprised when somethi...
Conjunctive events
- Broader categories are always more probable than their subsets. It's more likely someone has a pet than they have a cat. It's more likely someone likes coffee than they like cappuccinos. The extension rule in probability theory thus states that if B is a subset of A, B cannot be more probable than A.
- Likewise, the probability of A and B cannot be higher than the probability of A or B. It is more probable that Linda is a bank teller than that she is a bank teller and active in the feminist movement.
The best plans often fail
A plan is like a system. A change in one component of a system will likely impact the functionality of other parts of the system.
The more steps involved in a plan, the higher the chance that something will go wrong and cause delays and setbacks. For this reason, home remodeling and new product ventures seldom finish on time.
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Distinction bias
Is the tendency to over-value the effect of small quantitative differences when comparing options.
For example: we think a 1,200 square foot home will make us happier than a 1,000 squa...
Overcome distinction bias
- Don’t compare options side by side: In comparison mode, we end up spending too much time playing “spot the difference.” Instead, evaluate each choice individually and on their own merit.
- Know your “Must-Haves” before you look for something to buy: that way, you won't get suckered into features you don’t really need.
- Optimize for things you can’t get used to: your happiness will adjust back to anything that is stable and certain like your income, the size of your house, or the quality of your TV.
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Biases...
... specifically cognitive biases, are your unchecked tendencies to make decisions or take actions in an irrational way.
Instead of making decisions based on facts and data, you ...
Biases = shortcuts for processing information
The brain creates shortcuts in order to make fast decisions when it hits information or inspiration overload.
These shortcuts form unconscious biases so it’s easier for your brain to categorize information and make quick judgments over and over again.
Self-serving Bias
This means that when something good happens, you take the credit, but when something bad happens, you blame it on external factors.
Self-serving bias may manifest at work when you receive critical feedback. Instead of keeping an open mind, you may put up a defense when your manager or team member is sharing feedback or constructive criticism.
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