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Kahneman discovered 'Loss Aversion'—the psychological fact that losses loom larger than gains. We will work harder to avoid losing $100 than to gain $100. This bias makes us irrationally risk-averse in some situations and irrationally risk-seeking in others (to avoid a sure loss). He teaches that understanding this bias is crucial for making rational financial and life decisions.
"There is no evidence that risk takers in the economic domain have an unusual appetite for gambles on high stakes; they are merely less aware of risks than more timid people are. Ch. 24, "The engine of capitalism" p. 263."
Website: Wikiquote - Daniel Kahneman (Thinking, Fast and Slow (2011))
"The lesson is clear: estimates of causes of death are warped by media coverage. [...] The world in our heads is not a precise replica of reality; our expectations about the frequency of events are distorted by the prevalence and emotional intensity of the messages to which we are exposed. Ch. 13, "Availability, emotion, and risk" p. 138."
Website: Wikiquote - Daniel Kahneman (Thinking, Fast and Slow (2011))
"A recurrent theme of this book is that luck plays a large role in every story of success; it is almost always easy to identify a small change in the story that would have turned a remarkable achievement into a mediocre outcome. Introduction, p. 9."
Website: Wikiquote - Daniel Kahneman (Thinking, Fast and Slow (2011))
"Many unfortunate human situations unfold [...] where people who face very bad options take desperate gambles, accepting a high probability of making things worse in exchange for a small hope of avoiding a large loss. Risk taking of this kind often turns manageable failures into disasters. Ch. 29, "The fourfold pattern" pp. 318-319."
Website: Wikiquote - Daniel Kahneman (Thinking, Fast and Slow (2011))
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