Terms
Answering an easier question than the one asked
What is Substitution?
True or False: When making investment decisions it makes sense to take your time and allow your System 2 thought process to kick in and help you make more informed decisions.
What is true?
This term is used to describe the tendency to assess the quality of a decision based on its outcome rather than its process.
What is outcome bias?
This book explores the ______ and ______ that influence our judgment, the impact of our emotions on decision-making, and the ways in which we can make better choices in our personal and professional lives.
What is biases and Heuristics?
This system's predictions are based on precise calculation and skilled intuitions rooted in expertise and experiences
What is system 2?
System 1 uses stereotypes, not statistical thinking
What is base rate neglect?
This man discovered the Regression to the Mean theory.
Who is Francis Galton?
According to the text, physicians, financial advisers, third-base coaches, CEOs, social workers, diplomats, &politicians are some examples of decision-makers prone to this type of cognitive bias.
What is outcome bias?
Relying too much on easily information comes to mind?
What is availability bias?
A cognitive bias takes place when someone overestimates their skill and knowledge, leading to them making mistakes.
What is Overconfidence bias?
How we feel shapes what we think
What is the affect of Heuristic?
The statistical phenomenon is observed when dealing with random variables where extreme values move toward the average over time
What is regression to the mean?
What cognitive bias leads individuals to overstate the accuracy of their original predictions based on what actually happened.
What is Hindsight bias?
System 1 is fast, instinctive, and _____
What is emotional?
According to the test, this systems predictions tend to be over confident and heavily influences by the coherence of the story constructed from available evidence.
What is system 1?
Simple formulas usually beat expert judgements
What is Algorithms?
Success= some talent+ luck
Great success= some talent + a lot of luck
What is Daniel Kahneman's success equation?
The phenomenon describes the tendency to create flawed stories of the past that shape our views of the world and expectations for the future?
What is narrative fallacy?
System 2 thinking is more ____________.
What is logical?
This type of investor seeks to call extreme cases correctly, prioritizing the identification of potential blockbuster successes
Who is venture capitalist?
Assuming something is true if it seems familiar
What is cognitive ease
True or False: Using System 1 and making quick decisions is helpful in certain situations but not necessarily when making long-term financial decisions.
What is True?
System 1 thinking makes us see the world as simple and ________
What is predictable?
Kahneman helps improve your ________-_________ abilities.
What is decision making?
These types of predictions tend to be biased, ignore regression, and lead to over confident, and overly extreme results.
What are non-regressive predictions?