Closing Words

When I began writing this book, I wanted to explain a set of interesting findings about how people make decisions. By the end, I found that I had written about something more personal: the everyday struggle of good, intelligent people to choose well in a world that is busy, uncertain and full of pressure. Nadia and her toaster, João and his puzzle, Grace and her lost banknote, Selin at her kitchen table, and all the others in these pages are imagined. But I suspect you recognized some of them, because their moments of choice are ones that almost everyone shares.

If there is one idea I hope you carry away, it is this: your mistakes have patterns, and patterns can be worked with. You do not need to become a perfect calculator. You do not need to doubt every choice. You only need to know where your mind tends to slip, to slow down at those places and to arrange your life so that the good choice is often the easy one.

I also hope you carry away a certain honesty about evidence. This field has taught us a great deal, and it has also taught us to be humble. Some famous findings did not survive careful checking, and others turned out to be smaller than first claimed. That is not a failure of science. It is science working as it should. In your own life, too, it is wise to hold your beliefs firmly enough to act on them and loosely enough to change them when you learn more.

Finally, I hope you will be kind to yourself. Every person reading this book will make poor choices again, sometimes tomorrow. When that happens, notice the pattern, adjust your design and go on. That is how everyone who decides well has learned to do it. Thank you for reading, and I wish you many good decisions, and the calm that comes from making them well.

Key Terms in This Book

Anchoring: the tendency for the first number we hear to pull our later estimates toward it. Availability heuristic: judging how common something is by how easily examples come to mind. Behavioral economics: the study of how real people make economic and everyday decisions, using the findings of psychology.

Bias: a predictable direction in which our judgments tend to go wrong, like a table that is not quite level. Bounded rationality: reasoning that is limited by time, information and attention. Choice architecture: the way choices are arranged and presented. Choice overload: the difficulty that too many options can sometimes cause, especially when they are hard to compare and our preferences are unclear.

Commitment device: an arrangement made in advance that makes a better choice easier later. Confirmation bias: the tendency to look for, interpret and remember information in ways that fit what we already believe. Default: what happens if you do nothing. Empathy gap: the difficulty of imagining, in a calm state, how a strong feeling or need will change us, and the other way round.

Endowment effect: the tendency to value something more once it is ours. Fast thinking and slow thinking: the two broad modes of thinking, one quick and automatic, the other deliberate and effortful. Framing: the effect of describing the same facts in different words. Halo effect: the tendency for one good or bad quality to colour our view of everything else.

Heuristic: a mental shortcut, a simple rule the mind uses to decide quickly. Hindsight bias: the feeling, after something has happened, that we knew it would happen all along. Hot state and cold state: a state of strong feeling or need, and a calm state. Loss aversion: the tendency for losses to feel larger than gains of the same size.

Maximizing and satisficing: searching for the best possible option, and choosing the first option that is good enough. Mental accounting: the habit of keeping money in separate mental boxes. Nudge: a change in how choices are presented that makes one option easier without forbidding others. Outside view: looking at how similar cases usually turn out, rather than only at our own case.

Overconfidence: being more sure than the facts justify. Planning fallacy: expecting our own plans to go faster and more smoothly than similar plans usually do. Pre-mortem: imagining that a plan has already failed and asking why. Present bias: giving much more weight to now than to later. Projection bias: assuming that our future preferences will match our present ones.

Reference point: the starting point against which we judge gains and losses. Replication: repeating a study to see whether its result appears again. Social proof: taking what others do as a sign of what is right. Status quo bias: the tendency to keep things as they are. Sunk cost: time, money or effort already spent that cannot be recovered.

A Note on the Evidence

This book describes findings from behavioral economics and psychology in plain language. It does not report the exact figures of particular studies, and where it describes a classic experiment, it describes the general design and the direction of the results. Readers who want to learn more will find many careful introductions to the field in libraries, and many universities and public bodies publish clear summaries of research on decision making.

I have tried to say clearly where evidence is strong and where it is mixed. In brief: the effects of defaults, anchoring by relevant numbers, framing, the planning fallacy, overconfidence in the precision of our knowledge and confirmation bias are supported by a large body of research. The size of loss aversion varies and is debated. Choice overload appears in some conditions but has a small average effect. Many nudges work, but on average less strongly than early studies suggested. Several dramatic priming effects and the idea of willpower as a limited fuel have not held up well when tested again carefully. Research continues, and some of these judgments may change.

The people in this book's examples are imagined, and any resemblance to real people is not intended. For decisions about your own situation, seeking advice from a qualified professional is a wise step. If you are going through a very difficult time, please reach out to someone you trust or to a professional, and if you or someone else is in danger, contact your local emergency services right away.

About the Author

The author writes about how ordinary people think, choose and live, with a particular interest in the small decisions that fill a day and the large ones that shape a life. The author has long been fascinated by the gap between the careful plans people make and the choices they actually make, and by the simple, practical ways that gap can be narrowed. When not writing, the author enjoys long walks, slow cooking and the occasional very difficult puzzle, and still sometimes gives the quick wrong answer first.