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Misbehaving: The Making of Behavioral Economics

Book by Richard H. Thaler · 2 quotes · Behavioral Economics, Bets, Betting

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AllBehavioral EconomicsBetsBettingConfirmation BiasData Driven DecisionsDecision MakingOrganizational BehaviorOrganizational CultureOverconfidence

Misbehaving: The Making of Behavioral Economics Quotes

“But if it is crazy to turn down the 100 bets, the logic of Samuelson's argument is just reversed; you should not turn down one! Shlomo and I called this phenomenon "myopic loss aversion". The only way you can ever take 100 attractive bets is by first taking the first one, and it is only thinking about the bet in isolation that fools you into turning it down.”

Decision MakingBettingBehavioral EconomicsBets
Book:Misbehaving: The Making of Behavioral Economics
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“Stories are powerful and memorable. That is why I have told so many in this book. But an individual anecdote can only serve as an illustration. To really convince yourself, much less others, we need to change the way we do things: we need data, and lots of it. [...] People become overconfident because they never bother to document their past track record of wrong predictions, and then they make things worse by falling victim to the dreaded confirmation bias - they only look for evidence that confirms their preconceived hypotheses. The only protection against overconfidence is to systematically collect data, especially data that can prove you wrong. [...] "If you don't write it down, it doesn't exist". In addition, most organizations have an urgent need to learn how to learn, and then commit to this learning in order to accumulate knowledge over time. At the very least this means trying new things and keeping track of what happens. Even better would be to run actual experiments. [...] The ideal organizational environment encourages everyone to observe, collect data, and speak up.”

Organizational CultureOverconfidenceConfirmation BiasOrganizational BehaviorData Driven Decisions
Book:Misbehaving: The Making of Behavioral Economics
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