Humans are imperfect, inconsistent decision-makers

The problem of bias in decisions is well known and there are strategies that people can adopt to minimise it. For example, customers may be “anchored” on the first price they are presented with in a transaction, so they learn to consciously discard it before they negotiate. But noise is different precisely because it is less apparent. “It becomes visible only when we think statistically about an ensemble of similar judgments. Indeed, it then becomes hard to miss,” Daniel Kahneman, Olivier Sibony and Cass Sunstein write in their new book.

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