Availability Heuristic
Probability judgements ride on how easily examples come to mind, so vivid and recent events swamp long-run frequencies. It is why portfolio insurance sells best after crashes and leverage after rallies, and why the last crisis is always over-hedged. The fix is mechanical: pull the longest data series available and let the count, not the memory, set the estimate.
7 books · 5 people behind it · 4 resources
Start here
- The Undoing ProjectMichael Lewis, 2016
- Thinking, Fast and SlowDaniel Kahneman, 2011
- A Short History of Financial EuphoriaJohn Kenneth Galbraith, 1990
The people behind it 5
Each person holds a book in this entry or names it in their own tags.
Academics 3
Journalists 2
Resources 4
- Availability BiasShane Parrish · essay · Ease of recall masquerades as probability.
- Availability Bias: The Cognitive DistortionShane Parrish · essay · Vivid recent events swamp long-run frequencies.
- Bayes and Base RatesMichael J. Mauboussin · paper · How history should discipline a forecast's starting point.
- The Three Sides of RiskMorgan Housel · essay · Odds, average consequence, and the tail that ends you.
Books 7
John Kenneth Galbraith · 1990
Nassim Nicholas Taleb · 2007
Daniel Kahneman · 2011
Andrew WilkinsonCharles de VaulxFrank MartinMichael MauboussinMohnish PabraiRational Capital Investment FundSeth KlarmanStewart BrandAbi Tyas TunggalAlbert WengerAlfred LinAmy HoodBill GatesBryan JohnsonCharlie MungerDaniel BurkaDavid CancelDavid HellmannEv WilliamsJason FriedJason ZweigJulie ZhuoMarc AndreessenNassim Nicholas TalebNaval RavikantPaul BassatRay DalioRon ConwaySahil BloomSahil LavingiaSam AltmanSatya NadellaSophie BakalarTristan Harris
Daniel L. Schacter · 2001 · How memory fails, including the biases that distort recalled evidence
Daniel Gardner · 2008 · Why people misjudge risk; the availability heuristic in public life