Mindware - Tools for smart thinking - Richard E. Nisbett

Understanding our mental processes helps us know when to rely on intuition and when to use rules for solving problems. Learning about the unconscious mind can improve our choices and predict what makes us happy. Knowing statistics helps us assess causality, showing the importance of experiments over simple observations. This is crucial for finding effective business practices and personal behaviors. Additionally, learning logic and reasoning helps us develop and test theories accurately.

• Remember that all perceptions, judgments, and beliefs are inferences and not direct readouts of reality - Realizing we might be wrong should make us humble and open to the idea that other people's views could be more valid than we think.
• Be aware that our schemas affect our construals. - Schemas and stereotypes shape our understanding of the world, but they can also mislead us. By recognizing our reliance on them, we can avoid these pitfalls and become aware of both our own stereotype-driven judgments and those of others.
• Remember that incidental, irrelevant perceptions and cognitions can affect our judgment and behavior - We should remember that many hidden factors influence our thoughts and actions. To make accurate judgments, it's important to encounter objects and people in various situations.
• Be alert to the possible role of heuristics in producing judgments. - Remember that judging based on similarity can be misleading, and causes don't always resemble their effects. Also, the ease with which events come to mind can affect how likely or frequent we think they are.
• Pay more attention to context. This will improve the odds that you’ll correctly identify situational factors that are influencing your behavior and that of others. - Paying attention to context helps you recognize social influences at play. While reflection might not reveal how these influences affect others, it's likely they affect you too.
• Realize that situational factors usually influence your behavior and that of others more than they seem to, whereas dispositional factors are usually less influential than they seem. - Don't assume that someone's behavior in a few situations predicts their future behavior or reflects their traits, beliefs, or preferences.
• Realize that other people think their behavior is more responsive to situational factors than you’re inclined to think, and they’re more likely to be right than you are. - They almost certainly know their current situation and their relevant personal history, better than you do.
• Recognize that people can change. - Since ancient times, Westerners have believed the world is largely static and that people and objects behave due to fixed traits. In contrast, East Asians have always believed that change is constant and that changing the environment changes the person.
• Don’t assume that you know why you think what you think or do what you do.
• Don’t assume that other people’s accounts of their reasons or motives are any more likely to be right than are your accounts of your own reasons or motives.
• You have to help the unconscious help you.
• If you’re not making progress on a problem, drop it and turn to something else. - Hand the problem off to the unconscious to take a shot at it.

The formal definition of cost-benefit analysis is that the action that has the greatest net benefit, benefit minus cost, should be chosen from the set of possible actions.

1. List alternative actions
2. Identify affected parties
3. Identify costs and benefits for each party
4. Pick your form of measurement (which will usually be money)
5. Predict the outcome for each cost and benefit over the relevant time period.
6. Weight these outcome predictions by their probability.
7. Discount the outcome predictions by a decreasing amount over time. The result of the discounting is the “net present value”
8. Perform a sensitivity analysis, meaning one adjusts the outcome of cost-benefit analysis due to, for example, possible mistakes in estimating the costs and benefits or errors in estimating probabilities.

• Expended resources that can’t be retrieved should not be allowed to influence a decision about whether to consume something that those resources were used to obtain. - Such costs are sunk, no matter what you do, so carrying out the action for which the costs were incurred makes sense only if there is still a net benefit from it.
• You should avoid engaging in an activity that has a lower net benefit than some other action you could take now or in the future.
• Falling into the sunk cost trap always entails paying unnecessary opportunity costs. - If you do something you don’t want to do and don’t have to do, you automatically are wasting an opportunity to do something better.
• Attention to costs and benefits, including sunk cost and opportunity cost traps, pays.
• Loss considerations tend to loom too large relative to gain considerations. - Loss aversion makes us miss out on good deals. If you can handle a small loss for a chance at a larger gain, that's usually the best approach.
• We’re overly susceptible to the endowment effect, valuing a thing more than we should simply because it’s ours. - If you can sell something at a profit but hesitate, ask yourself if it's just because you own it, rather than its actual value.
• We’re a lazy species: we hang on to the status quo for no other reason than that it’s the way things are. - Put laziness to work by organizing your life and that of others so that the easy way out is actually the most desirable option.
• Choice is way overrated. - too many choices can confuse and make decisions worse, or prevent needed decisions from being made
• When we try to influence the behavior of others, we’re too ready to think in terms of conventional incentives, carrots, and sticks. - Monetary gain and loss are the big favorites among incentives. But there are often alternative ways of getting people to do what we want. Rather than pushing people or pulling people, try removing barriers and creating channels that make the most sensible behavior the easiest option.
• Observations of objects or events should often be thought of as samples of a population.
• The fundamental attribution error is primarily due to our tendency to ignore situational factors, but this is compounded by our failure to recognize that brief exposure to a person constitutes a small sample of a person’s behavior.
• Increasing sample size reduces error only if the sample is unbiased.
• The standard deviation is a handy measure of the dispersion of a continuous variable around the mean. - The larger the standard deviation for a given type of observation, the less confident we can be that a particular observation are going to be less extreme.
• Accurate assessment of relationships can be remarkably difficult.
• When we try to assess correlations for which we have no anticipations as when we try to estimate the correlation between meaningless or arbitrarily paired events, the correlation must be very high for us to be sure of detecting it.
• We’re susceptible to illusory correlations.
• The representativeness heuristic underlies many of our prior assumptions about correlation.
• Correlation doesn’t establish causation, but if there’s a plausible reason why A might cause B, we readily assume that correlation does indeed establish causation.
• Reliability refers to the degree to which a case gets the same score on two occasions or when measured by different means. Validity refers to the degree to which a measure predicts what it’s supposed to predict.
• The more codable events are, the more likely it is that our assessments of correlation will be correct.
• Caution and humility are called for when we try to predict future trait-related behavior from past trait-related behavior unless our sample of behavior is large and obtained in a variety of situations.
• Assumptions tend to be wrong. - A/B testing is child-simple in principle: create a procedure you want to examine, generate a control condition, flip a coin to see who (or what) gets which treatment, and see what happens.
• Correlational designs are weak because the researcher hasn’t assigned the cases to their condition.
• The greater the number of cases, people, agricultural plots, and so on, the greater the likelihood that you’ll find a real effect and the lower the likelihood that you will “find” an effect that isn’t there.
• When you assign each case to all of the possible treatments, your design is more sensitive.
• It’s crucial to consider whether the cases you’re examining (people in the case of research on humans) could influence one another.
• Sometimes we can observe relationships that come close to being as convincing as a genuine experiment.
• The randomized control experiment is frequently called the gold standard in scientific and medical research, with good reason.
• Society pays a high cost for experiments no carried out.
• Multiple regression analysis (MRA) examines the association between an independent variable and a dependent variable.
• The fundamental problem with MRA, as with all correlational methods is self-selection.
• Despite the above facts, MRA has many uses.
• When a competently conducted experiment tells you one thing about a given relationship and MRA tells you another, you normally must believe the experiment.
• A basic problem with MRA is that it typically assumes that the independent variables can be regarded as building blocks, with each variable taken by itself being logically independent of all the others.
• Just as correlation doesn’t prove causation, the absence of correlation fails to prove the absence of causation.
• Verbal reports are susceptible to a huge range of distortions and errors.
• Answers to questions about attitudes are frequently based on tacit comparison with some reference groups.
• Reports about the causes of our behavior are susceptible to a host of errors and incidental influences.
• Actions speak louder than words.
• Conduct experiments on yourself. - The same methods psychologists use to study others can be used to study yourself. Casual observation can be misleading. Instead, deliberately manipulating variables, using random conditions, and systematically recording results can reveal accurate insights about yourself that casual observation can't provide.
• Logic divests arguments of any references to the real world so that the formal structure of an argument can be laid bare without any interference from prior beliefs.
• The truth of a conclusion and the validity of a conclusion are entirely separate things.
• Venn diagrams embody syllogistic reasoning and can be helpful or even necessary for solving some categorization problems.
• Some of the fundamental principles underlying western and eastern thought are different. - Western thought is analytic and emphasizes logical concepts of identity and insistence on noncontradiction.
• Western thought encourages separation of form from content in order to assess validity of arguments.
• Eastern thought produces more accurate beliefs about some aspects of the world and the causes of human behavior than western thought.
• Westerners and easterners respond in quite different ways to contradictions between two propositions.
• Eastern and Western approaches to history are very different. - Eastern approaches emphasize context, the order of events, and empathy with historical figures. Western approaches tend to downplay context, care less about event sequences, and focus on causal modeling of historical processes.
• Western thought has been influenced substantially by Eastern thought in recent decades.
• Reasoning about social conflict by younger Japanese is wiser than that of younger Americans. But Americans gain wisdom over their life span and japanese do not. - Japanese, and undoubtedly other east asians, are taught about how to avoid and resolve social conflict. Americans are taught less about it and have more to gain as they grow older.
• Explanations should be kept simple. - They should call on as few concepts as possible, defined as simply as possible. Effects that are the same should be explained by the same cause.
• Reductionism in the service of simplicity is a virtue reductionism for its own sake can be a vice. - Events should be explained at the most basic level possible.
• We don’t realize how easy it is for us to generate plausible theories.
• Our approach to hypothesis testing is flawed in that we’re inclined to search only for evidence that would tend to confirm a theory while failing to search for evidence that would tend to disconfirm it.
• A theorist who can’t specify what kind of evidence would be disconfirmatory should be distrusted.
• Falsifiability of a theory is only one virtue; confirmability is even more important.
• We should be suspicious of theoretical contrivances that are proposed merely to handle apparently disconfirmatory evidence but are not intrinsic to the theory.
• Science is based not only on evidence and well-justified theories, faith and hunches may cause scientists to ignore established scientific hypotheses and agreed-upon facts.
• The paradigms that underlie a given body of scientific work, as well as those that form the basis for technologies, industries and commercial enterprises, are subject to change without notice.
• Different cultural practices and beliefs can produce different scientific theories, paradigms, and even forms of reasoning.
• Quasi-rational practices by scientists, and cultural influences on belief systems and reasoning patterns, may have encourage postmodernists and deconstructionist to press the view that there are no facts, only socially agreed-upon interpretations of reality.