Decisive: How To Make Better Choices in Life and Work
Chip Heath and Dan Heath, Crown Business, 2013

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Narrow framing:
The tendency to define our choices too narrowly, to see them in binary terms.
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Confirmation bias:
To develop a quick belief about a situation and then seek out information that bolsters our belief.

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Short-term emotion:
We are governed in decision making by how we feel about a situation and not necessarily about the long-term effects of a decision.
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Overconfidence:
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People think they know more than they do about how the future will unfold.
Punditry is the perfect example.

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Widen your options: (overcome narrow framing)
– How can you expand your set of choices?
• Rather than “either/or” binary options, uncover new options and think “this and that.”
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Reality-test your assumptions: (overcome confirmation bias)
How can you get outside your head and collect information that you can trust?

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Attain distance before deciding: (overcome short-term emotion)
– Wait a couple of days—sleep on it. Use Ben
Franklin’s method of making a long pros and cons list over several days, and then analyzing it objectively.
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Prepare to be wrong: (overcome overconfidence)
Plan for an uncertain future – have a Plan B … and Plan C.

• W iden your options.
• R eality-test your assumptions.
• A ttain distance before deciding.
• P repare to be wrong.

The Ascent of Money: A Financial
History of the World
Niall Ferguson, Penguin Press, 2008

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Availability bias :
– Causes us to base decisions on information that is more readily available in our memories, rather than the data we really need.

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Hindsight bias:
– Causes us to attach higher probabilities to events after they have happened (ex post) than we did before they happened (ex ante).

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The problem of induction:
– Leads us to formulate general rules on the basis of insufficient information.
• The Polo Assumption

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The fallacy of conjunction (or disjunction)
– We tend to overestimate the probability that seven events of 90 percent probability will all occur, while underestimating that at least one of seven events of 10 percent probability will occur.

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Confirmation bias:
– Inclines us to look for confirming evidence of an initial hypothesis, rather than falsifying evidence that would disprove it.

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Contamination effects:
– We allow irrelevant but proximate information to influence a decision.

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The affect heuristic:
– Preconceived value judgments interfere with our assessments of costs and benefits.

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Scope neglect:
– Prevents us from proportionately adjusting what we should be willing to sacrifice to avoid harms of different orders of magnitude.
– Promotion focus versus a Prevention focus

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Overconfidence in calibration:
– Leads us to underestimate the confidence intervals with which our estimates will be robust (.e.g. to conflate the “best case” scenario with the “most probable” scenario).

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Bystander apathy :
– Inclines us to abdicate individual responsibility when in a crowd.
• Akin to Group Think