- cuando contratamos seguros: “individuals pay large multiples of actuarially fair value to buy insurance against small losses, as well as to reduce their deductibles… such choices imply astronomical levels of risk aversion
- la publicidad es efectiva a pesar de que the standard economic view that persuasion is conveyance of information seems to run into a rather basic problem that advertising is typically emotional, associative, and misleading
- los fondos de inversión simples (los que invierten en índices bursátiles) producen más rendimientos que los gestionados activamente (esos por los que pagamos comisiones muy altas porque se supone que hay unos tíos listísimos comprando y vendiendo lo que más interesa – se supone – a los inversores) y, sin embargo, solo una minoría invierte en los primeros
“Dozens of empirical studies confirm that, even in markets with relatively inexpensive arbitrage, identical, or nearly identical, securities trade at different prices. With costlier arbitrage, pricing is even less efficient”.
Kahneman recalls a magnificent story of Israeli Air Force officers explaining to him that being tough with pilots worked miracles, because when pilots had a poor landing and got yelled at, their next landing was better, but when they had a great landing and got praised, their next landing was worse. To these officers, the role of chance and consequent mean reversion in landing quality did not come to mind as an explanation.
In one effort that sought to stay close to Kahneman’s System 1 reasoning, Gennaioli and I (2010) argued that individuals solve decision problems by representing them – automatically but incompletely -- in ways that focus on features that are statistically more associated with the object being assessed (en el famoso ejemplo de Linda, la cajera de banco feminista y radical en sus años de estudiante que constituye un caso de falacia por conjunción, “The decision maker thus compares the likelihoods not of bank teller vs feminist bank teller, but rather of the stereotypical (representative) non-feminist bank teller vs feminist bank teller, and concludes that Linda the college radical is more likely to be the latter, lo que nos parece rarísimo (que Linda haya decidido trabajar como cajera en un banco). Pero es obvio que es más probable que Linda sea una cajera a que sea una cajera que, además, milita en movimientos feministas.
Tversky and Kahneman argue, correctly I think, that our minds are not built (for whatever reason) to work by the rules of probability, though these rules clearly govern our universe. We do something else that usually serves us well, but fails in crucial instances: we “match to type.” We abstract what we consider the “essence” of an entity, and then arrange our judgments by their degree of similarity to this assumed type. Since we are given a “type” for Linda that implies feminism, but definitely not a bank job, we rank any statement matching the type AS MORE PROBABLE than another that only contains material contrary to the type. This propensity may help us to understand an entire range of human preferences, from Plato’s theory of form to modern stereotyping of race or gender.
the main lesson I learned from the book is that we represent problems in our minds, quickly and automatically, before we solve them. the fundamental feature of System 1 is that what our attention is drawn to, what we focus on, and what we recall, is not always what is most necessary or needed for optimal decision making. Some critical information is ignored; other -- less relevant – information receives undue attention because it stands out. System 1 is automatic and reactive, not optimizing. As a consequence, when we make a judgment or choice, we do that on the basis of incomplete and selected data … Even if the decisions are optimal at this point given what we have in mind, they might not be optimal given the information potentially available to us both from the outside world and from memory. By governing what we are thinking about, System 1 shapes what we conclude, even when we are thinking hard.
The history of a species, or any natural phenomenon that requires unbroken continuity in a world of trouble, works like a batting streak. All are games of a gambler playing with a limited stake against a house with infinite resources. The gambler must eventually go bust. His aim can only be to stick around as long as possible, to have some fun while he’s at it, and, if he happens to be a moral agent as well, to worry about staying the course with honor. The best of us will try to live by a few simple rules: do justly, love mercy, walk humbly with thy God, and never draw to an inside straight.