The Art of Thinking Clearly- Rolf Dobelli

The Art of Thinking Clearly

Rolf Dobelli

The bestseller by Rolf Dobelli basically talks about the various biases that one needs to avoid while decision making. The book is beautifully written with easy examples that the reader can co-relate with while making key decisions.

Some of the biases mentioned by the author as follows:

1)      Survivorship bias: Systematic overestimation of people about chances of success. Success stories are everywhere but people tend to overlook failures nor are they written about. One needs to know both the success as well as failure stories before arriving at a decision

2)      Swimmer’s body illusion: Having a fare estimate of one’s capabilities

3)      Clustering illusion: Do not look for patterns in any small data sample you have

4)      Sunk Cost Fallacy: Do not justify non-recoverable investments. Do not throw good money after bad money

5)      Reciprocity: Do not base a decision to reciprocate for a good deed done by someone earlier.

6)      Confirmation bias: Seeing only what you want to see

7)      Authority Bias: A monkey also might fall from the tree. Question authority if you feel so

8)      Contrast effect: People benchmark basis what they see. If you want to impress somebody make sure that your friend is lesser attractive

9)      Hindsight bias: It is always easier to comment on something retrospectively.

10)   Overconfidence bias: Judge your own capabilities realistically

11)   Chauffer Knowledge: Ascertain whether the other person has in-depth or superficial knowledge

12)   Illusion of Control: Define the locus of control (intrinsic/extrinsic)

13)   Incentive Super Response theory- Monetary incentives may not work always

14)   Regression to mean- One catches with the law of averages, sooner or later

15)   Outcome bias: A bad result does not necessarily indicate a bad decision. External factors do play a role

16)   Paradox of choice: offering too much of choice can be detrimental

17)   Liking bias: Never base a decision on your attraction to the opposite person

18)   Endowment bias: Never hold on to materialistic things

19)   Coincidence: Improbable things do happen. If a probability exists it may happen

20)   Group think: Have diversity in thought

21)   Scarcity error: Never vie for something just because it is scarce

22)   Base Rate Neglect: Always form a realistic base

23)   Anchor: Have an anchor, a benchmark for negotiations

24)   Loss Aversion: A $100 loss hurts more than the pleasure of a $100 gain

25)   Winner’s Curse: Avoid the winner’s curse and decide on a price when you need to walk out

There is much more to the book than this ..... Grab a copy now !!!!