Sunday, December 8, 2013

Thinking, Fast and Slow, A Catalog of Fallacies: Part 3

Alrighty, stuff from part three of the book.  This part of the book focuses on biases that result in overconfidence about the outcome of future events.

Narrative Fallacy
This occurs when we use flawed stories to construct causal narratives of events, which we use in turn to shape our expectations of the future.  Examples include Horatio Alger-style rags-to-riches stories that have us believe that hard work and indomitable character lead inevitably to success.

Hindsight Bias
When asked to reconstruct their past beliefs, people retrieve their current ones instead, and many cannot believe that they ever believed differently.

Outcome Bias
When outcomes are bad, people often blame decision-makers for not seeing what they took to be the obvious.  However, the obvious only appears after the fact.

Illusion of Validity
Self-explanatory.  There are processes of inference and decisions-making that have been empirically shown to be unreliable, but they still "feel" like they are valid forms of inference.

Illusion of Skill
Derivative of illusion of validity.  It looks like certain jobs and positions are highly skilled, when in fact they do marginally better than decisions made by a computer algorithm.

The Inside View
The perspective taken from within an objective oriented group.  This leads to the planning fallacy.

Planning Fallacy
Committed when forecasts are unrealistically close to best case scenarios.

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