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Why Smart People Are Stupid
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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Key Ideas
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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Key Ideas
Your brain is the biggest obstacle.
What’s hard for human beings is letting go...
The most common biases
- You’re focused on the time and energy you’ve already invested, or the sunk cost fallacy.
- Your eyes are trained on positive cues -being overly optimistic and loss averse. Always trying harder and for longer.
- When we realize we’re likely to fail at a job or other endeavor, we begin to see that goal as even more valuable than it was initially.
- FOMO—and the fear of making a mistake.
Do this if you want to quit
- Get a bead on your emotions. Don’t set yourself up for a “straw-that-broke-the-camel’s back” moment.
Motivate yourself. Quitting isn’t an end in and of itself; it’s a pathway to a new destination.
Make a plan that not only sets your new goal but anticipates possible setbacks and pitfalls along the way.
Prepare for the stress of transition. The best defence is knowing ahead of time how you’re likely to react.
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Key Ideas
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.