Money does not buy you happiness, but lack of money certainly buys you misery.
Many unfortunate human situations unfold [. . .] where people who face bad options take desperate gambles, accepting a high probability of making things worse in exchange for a small hope of avoiding a large loss. The thought of accepting the large sure loss is too painful, and the hope of complete relief is too enticing, to make the sensible decision that it is time to cut one's losses.
A reliable way to make people believe in falsehoods is frequent repetition, because familiarity is not easily distinguished from truth. Authoritarian institutions and marketers have always known this fact.
Adaptation seems to be, to a substantial extent, a process of reallocating your attention.
People just hate the idea of losing. Any loss, even a small one, is just so terrible to contemplate that they compensate by buying insurance, including totally absurd policies like air travel.
Negotiations over a shrinking pie are especially difficult because they require an allocation of losses. People tend to be much more easygoing when they bargain over an expanding pie.
We think of our future as anticipated memories.
By their very nature, heuristic shortcuts will produce biases, and that is true for both humans and artificial intelligence, but the heuristics of AI are not necessarily the human ones.
Alternative descriptions of the same reality evoke different emotions and different associations.
We have associations to things. We have, you know, we have associations to tables and to - and to dogs and to cats and to Harvard professors, and that's the way the mind works. It's an association machine.
We don't see very far in the future, we are very focused on one idea at a time, one problem at a time, and all these are incompatible with rationality as economic theory assumes it.
We are very influenced by completely automatic things that we have no control over, and we don't know we're doing it.
Optimistic people play a disproportionate role in shaping our lives. Their decisions make a difference; they are inventors, entrepreneurs, political and military leaders - not average people. They got to where they are by seeking challenges and taking risks.
If owning stocks is a long-term project for you, following their changes constantly is a very, very bad idea. It's the worst possible thing you can do, because people are so sensitive to short-term losses. If you count your money every day, you'll be miserable.
In a rising market, enough of your bad ideas will pay off so that you'll never learn that you should have fewer ideas.
The brains of humans contain a mechanism that is designed to give priority to bad news.
When people talk of the economy being strong, they don't seem to feel that they, too, are better off.
Hindsight bias makes surprises vanish.
Optimism is normal, but some fortunate people are more optimistic than the rest of us. If you are genetically endowed with an optimistic bias, you hardly need to be told that you are a lucky person - you already feel fortunate.
Suppose you like someone very much. Then, by a familiar halo effect, you will also be prone to believe many good things about that person - you will be biased in their favor. Most of us like ourselves very much, and that suffices to explain self-assessments that are biased in a particular direction.
