Intuition is very good — provided that you have [first] gone through the exercise of systematically and independently evaluating, the constituents of the problem. Then when you close your eyes and generate an intuitive, comprehensive image of the case, you will actually add information.
Content: Quotation | Author: Daniel Kahneman | Source: Knowledge@Wharton | Subjects: Decision Making, Management, Thought
Much of human error is not even attributable to a systematic cause, but to “noise.” When people think about error, we tend to think about biases. […] But in fact, a lot of the errors that people make is simply noise, in the sense that it’s random, unpredictable, it cannot be explained.
Content: Quotation | Author: Daniel Kahneman | Source: Knowledge@Wharton | Subjects: Organizational Behavior, Personality / Behavior, Thought
Figuring out how to make the act of decision-making “commensurate with the complexity and importance of the stakes” is a huge problem, in Daniel Kahneman’s view, to which the business world does not devote much thought. At a Wharton conference he described how significant progress can be made in making organizations “more intelligent.”
Content: Article | Author: Daniel Kahneman | Source: Knowledge@Wharton | Subjects: Organizational Behavior, Personal Development
In Thinking, Fast and Slow, the Nobel Prize-winning founder of behavioral economics Daniel Kahneman … writes of two fictitious mental processes that he calls System 1 (“thinking fast”) and System 2 (“thinking slow”). System 1 mental operations are rapid and automatic; they are biased toward belief and confirmation rather than analysis and skepticism; they tend to jump to conclusions and infer causal relations based on … [ Read more ]
Content: Quotation | Authors: Daniel Kahneman, James Guszcza | Source: Deloitte Review | Subjects: Analysis, Decision Making, Organizational Behavior, Thought
Daniel Kahneman, the renowned psychologist and winner of the Nobel Prize in Economics, takes us on a groundbreaking tour of the mind and explains the two systems that drive the way we think. System 1 is fast, intuitive, and emotional; System 2 is slower, more deliberative, and more logical. The impact of overconfidence on corporate strategies, the difficulties of predicting what will make us happy … [ Read more ]
Content: Book | Author: Daniel Kahneman | Subjects: Organizational Behavior, Personal Development
We’re all prey to cognitive mistakes, says Nobel Laureate Daniel Kahneman. But knowing that can help you avoid them.
Content: Thought Leader | Author: Daniel Kahneman | Source: Gallup Management Journal | Subjects: Organizational Behavior, Personal Development
[The hubris] hypothesis was proposed by a famous professor of finance to explain why so many mergers and acquisitions among large firms fail. The idea is that you look at the other firm, and it seems to be floundering. So you think, “Oh, those managers are inept — I could do better.” That motivates you to buy their company, usually at an inflated price, because … [ Read more ]
Content: Quotation | Author: Daniel Kahneman | Source: Gallup Management Journal | Subjects: Organizational Behavior, Personality / Behavior
In an excerpt from his new book, Thinking, Fast and Slow, the Nobel laureate recalls how an inwardly focused forecasting approach once led him astray, and why an external perspective can help executives do better.
Content: Article | Author: Daniel Kahneman | Source: McKinsey Quarterly | Subject: Organizational Behavior
Nobel laureate Daniel Kahneman and psychologist Gary Klein debate the power and perils of intuition for senior executives.
Content: Article | Authors: Daniel Kahneman, Gary Klein | Source: McKinsey Quarterly | Subject: Organizational Behavior
Lucky risk takers use hindsight to reinforce their feeling that their gut is very wise. Hindsight also reinforces others’ trust in that individual’s gut. That’s one of the real dangers of leader selection in many organizations: leaders are selected for overconfidence. We associate leadership with decisiveness. That perception of leadership pushes people to make decisions fairly quickly, lest they be seen as dithering and indecisive. … [ Read more ]
Content: Quotation | Author: Daniel Kahneman | Source: McKinsey Quarterly | Subjects: Confidence, Decision Making, Leadership, Organizational Behavior
A plan is only a scenario, and almost by definition, it is optimistic. Any complex undertaking is subject to myriad problems — from technology failures to shifts in exchange rates to bad weather — and it is beyond the reach of the human imagination to foresee all of them at the outset. Although the probability of any one of these events could be low, the … [ Read more ]
Content: Quotation | Author: Daniel Kahneman | Source: Rotman Magazine | Subjects: Personality / Behavior, Planning, Risk Management
In many cases, what looks like risk-taking doesn’t take courage at all; it’s just unrealistic optimism. Courage is a willingness to take the risk once you know the odds; optimistic overconfidence means you are taking the risk because you don’t know the odds. There’s a big difference.
Content: Quotation | Author: Daniel Kahneman | Source: Rotman Magazine | Subjects: Optimism, Personality / Behavior, Risk Management
Organizations are out there every day, making tons of decisions, but they aren’t keeping track of them. There are many factors within organizations that make them reluctant to learn from experience, so it’s a forlorn hope, but the goal would be to have dispassionate evaluations of past decisions, and to spend some effort in figuring out why each decision did or did not pan out. … [ Read more ]
Content: Quotation | Author: Daniel Kahneman | Source: Rotman Magazine | Subjects: Decision Making, Learning, Organizational Behavior
Many M&A decisions may be the result of hubris, say Dan Lovallo and Daniel Kahneman. Heres a technique to help executives avoid the bad kind of optimism.
Content: Article | Authors: Dan P. Lovallo, Daniel Kahneman | Source: Harvard Business School (HBS) Working Knowledge | Subjects: Leadership, Management