Definition: People determine what they think by consulting their feelings.
Example: We like most things about the politicians we favour.
Insight: On particular topics, we have already made prejudgements based on how we feel, rather than what we think.
Insight: The affect heuristic is one of the reasons why 'brand' is so valuable - people have emotional connections to products and companies.
Reference: Paul Slovic proposed the affect heuristic.
Definition: The anchoring effect is what happens when arbitrary numbers impact quantitative judgements.
Example: Social security number as an anchor for how much a bottle of wine is worth.
Insight: Anchoring has a powerful effect in negotiations.
Insight: In negotiations, going first is likely to provide an advantage.
Definition: When we substitute a judgement of how easily examples come to mind for an assessment of frequency.
Insight: Theoretically, judgements of risk should be based on long term averages. In reality, recent incidents are given more weight because they come to mind more easily.
Insight: Choice architecture can work to make a good decision easy.
Example: Removing administrative burdens to access to healthcare.
Example: Making information about products explicit and clear: e.g clearly explaining fees and charges with financial products.
Example: Putting healthy foods in supermarkets in clear and obvious places.
Definition: The strong tendency to assign blame or credit to people for actions and outcomes that would be better explained by luck or circumstances.
Insight: We often view people in light of first impressions.
Insight: When rating employees in can be beneficial to do so with each dimension separately, even with different people judging each dimension - to limit the halo effect.
Insight: Projects and programs are regularly subject to optimism bias.
Principle: Apply percentage adjustments (debiasing) to cost and duration of projects, ideally based on organisational history of optimism bias.
Insight: When people forecast completion times for projects, the estimate is usually much lower than the time actually required.
Principle: Add a buffer to project estimates.
Principle: Implement policies or processes to remove bias.
Principle: Question forecasts. Take an outside view. Use confidence intervals.
Insight: Decision makers can often be excited about new initiatives, but reluctant to divert resources away from exisiting business units or projects.
