Behavioural Economics

You Don’t Understand Probability

Let’s say you are considering putting money into a bet of $1,000. It’s a coin toss. The expected outcome of the bet, i.e., the probabilities of each payoff multiplied by the dollar values at stake is $1,000 (i.e., 50% x $0 + 50% x $2,000). Can you visualise owning $1,000?

Thinking, Fast and Slow: How Our Brain Makes Decisions

Thinking, Fast and Slow is a brilliant model that explains the machinery of thought. It helps you understand why people make irrational decisions, and why often your gut feelings and intuitions are wrong.