Reading List · Decision-Making
Thinking, Fast and Slow
The two systems of thought and the systematic biases that affect decision-making
"A reliable way to make people believe in falsehoods is frequent repetition, because familiarity is not easily distinguished from truth."
- Daniel Kahneman
Why It Matters
Kahneman's research explains why organizations make predictable errors. The biases he documents - survivorship bias, confirmation bias, overconfidence - are exactly what the Biology of Business framework helps counteract by providing an external reference frame (biological patterns) for evaluating business decisions.
Key Ideas
- System 1 (fast, intuitive) and System 2 (slow, deliberate) thinking
- Cognitive biases are systematic, not random errors
- Loss aversion: losses feel about twice as powerful as equivalent gains
- WYSIATI: What You See Is All There Is - we don't account for what we don't know
How It Connects to This Framework
The framework's emphasis on avoiding anecdotal reasoning and survivorship bias is directly informed by Kahneman's work. The decision frameworks throughout are designed to counteract cognitive biases.