[my generator is]: We favor the visible, the embedded, the personal, the narrated, and the tangible; we scorn the abstract. Everything good (aesthetics, ethics) and wrong (Fooled by Randomness) with use seems to flow from it.
Our beliefs tend to be path dependent. Changing your mind in light of new information is good and we should do it more. However, we don't -- it is ostracized. Imagine a politician changing opinions drastically mid-campaign.
Soros is known to change his mind often and unapologetically.
Probably the most information-dense Chapter. Our mind has trouble with randomness and probability. Duh. A lot more than one may think originally.
We're deeply flawed, not merely making errors.
Given two different equiprobable outcomes it is hard for our mind to visualize 50% of one and 50% of the other. Our mind just visualizes one at a time.
It is good that we don't think about probability correctly, for if we did, even the smallest of decision would require an infinite amount of probabilistic calculation. Herbert Simon: our brain is an approximation engine for this. It stops at some point. We're rational, up to a point: bounded rationality.
Kahneman and Tversky: behavioral economics. Our brain is very flawed when it comes to probability. Deep down, it uses a heuristics to make decisions. The heuristic used is highly dependent on the context and the way the problem is presented. The system of heuristics is not self-consistent. All this leads to a well-known set of biases (e.g. hindsight bias). Several of these were studied quantitatively and cataloged by Kahneman & Tversky.
Another problem is that genetically we're probably not too different than caveman. The survival requirements in that environment are very different that in today's environment. Neurobiologists believe that this roughly means we have 3 brains: the animal one (makes our heart beat), the mammal one (in charge of all our primate-like behaviors), and the cognitive one.
Emotions are key in decision making. No emotion, no decision: the brain calculates for ever.
People suck at conditional probability: medicine, trials/evidence, option pricing. More detailed example: By not dying, your life expectancy goes up. That's because your life expectancy is that at birth. Every year, some people born in your year of birth have died and you haven't. Thus, to make the life expectancy at birth come out right, yours is necessarily higher.
People overvalue their knowledge and underestimate the probability of being wrong. People attribute their success to their actions and their failures to randomness.