Important concepts around how we all make decisions. This presentation introduces the work of Nobel prize winner Daniel Kahneman on Cognitive Biases, and helps you understand why we make errors in judgement, and how to look for signs you're about make one.

1. 1
THINKING
FAST &
SLOW
HOW OUR BRAIN
MAKES DECISIONS

2. IT’S GOOD TO BE LAZY
Science ties lower metabolism &
slower living to better chances of
species survival
Tortoises aren’t as cool as a T-rexs,
but they’ve lasted much longer...

3. WE’RE BUILT TO BE LAZY
For most of our existence,
conserving energy for when
it was absolutely needed was
a SURVIVAL NECESSITY
Burning calories to be skinny
is a luxury humans can
afford only recently

4. Since we’re lazy by
design, and thinking is
effortful, we’ve evolved to
avoid it as much as
possible.
This has a HUGE impact
on how we make
decisions

5. The leading expert on
how we make decisions is
Israeli psychologist prof.
DANIEL KAHNEMAN
Kahneman spent 50 years
researching the topic & in
2002 he was awarded the
Nobel prize in
Economics*
* They don’t give one for psychology

6. Kahneman theorizes
that our brain utilizes
two complementary
systems to support
our decision making

7. System #1
EFFORTLESS walk
Intuition / Impulse /
Skilled response / Easy /
System #2
EFFORTFUL run
Reason / Intention /
Doubt / Concentration

8. SCIENCE
TIME!!!
ARE WE
READY TO
SEE HOW
THIS
WORKS?

9. 2+2=?

10. 4

11. System #1

12. 2√2=?

13. 1.414213

14. System #2

15. How about
practical calculations?

16. You bought this lunch for ฿110.
The krapow & curry cost
฿100 more than the rice.

17. How much did
the rice cost?

18. ฿10

19. ฿5

20. x+y=110
x=y+100
(y+100)+y=110
2y=110-100
y=5

21. The problem looks easy, so system #1
processes it automatically.
Our DEFAULT USE of effortless
system #1 causes us to make
mistakes OFTEN.

22. The tools system #1
uses to “shortcut” our
decision thinking
are called HEURISTICS or
COGNITIVE BIASES

23. COGNITIVE BIASES
are baked into our human
operating system
THEY AFFECT ALL OF US

24. Here’s an
example...

25. You’re in
Phuket
enjoying a
dip in the sea

26. Suddenly
you see
a shark!

27. What do
you do?

28. SWIM!!!!

29. Did you have to
think about it?

30. NO

31. FIGHT-OR-FLIGHT responses are the
evolutionary grandfather of heuristics
They FORCE us to
make survival
decisions, LITERALLY
WITHOUT THINKING

32. Heuristics only
begin there.
Here’s another example...

33. K. Som is a 33 year old
Chiang Mai resident.
Which is likeliest to be
her profession?
● Photographer
● Festival producer
● Teacher
● Model
● Architect

34. Statistically she’s most likely to be a teacher,
but we probably guessed otherwise.
WHY?
System #1 encounters a question it can’t answer &
immediately references the nearest available
information, REGARDLESS OF ITS RELEVANCE…
The photo threw us off

35. This is known as the
Availability Heuristic

36. Our biases are
constantly being
leveraged by those
around us

37. We INSTINCTIVELY
value scarce things.
This is known as
SCARCITY BIASING &
it’s used in marketing
ALL THE TIME
Black Friday >>>>>>>

38. BOOKED 31 TIMES IN 24 HOURS!!!
ONLY 7 ROOMS LEFT!!!!!!
LAST AVAILABLE ROOMS!!!!!!!!!
Are you stressed yet?

39. ...This is your opportunity to meet
like-minded founders & investors in a
casual atmosphere over pizzas and beer.
Register here
We have 47 confirmations
and can only fit 60, so please
confirm your spot ASAP
Remember
this?

40. Another one...

41. Have you
checked your
phone since
I started
speaking?

42. Deloitte's 2018 Global
Mobile Consumer
Survey found we
check our phones
~52 times a day.

43. +11% increase
year-over-year

44. Why can’t we
put our phones
down?

45. To answer that
we need to take
a small detour...

46. If you use
To-Do lists, you’re
familiar with the feeling
of “being awesome”
that we get when we
mark a task as “done”

47. This is known as the
Completion Bias

48. Our brains are wired to
reward us for taking
positive actions by giving us
a boost of Dopamine*
* The “feel good” chemical

49. Checking off to-do lists
items literally gives us a
Dopamine high

50. The same
applies for
completing
online forms

51. You know
what looks
a lot like
Dopamine?

52. COCAINE

53. ...And as with any drug
THE MORE YOU USE
THE MORE YOU NEED

54. Your brain sees
notification swipes
as task completion
& rewards you with
Dopamine
releases

55. More apps 🡒 More
notifications 🡒 More
Dopamine 🡒 Receptor
needs higher levels for the
same response 🡒 More
apps 🡒 More notifications 🡒 More
Dopamine 🡒 Receptor needs higher levels
for the same response 🡒 More apps 🡒 More
notifications 🡒 More Dopamine 🡒 Receptor
needs higher levels for the same response 🡒
More apps 🡒 More notifications 🡒 More
Dopamine 🡒 Receptor needs higher levels
for the same response 🡒 More apps 🡒 More

56. We are literally
ADDICTED to our
phones

57. ...if that’s not enough to get you
worried, recent studies link
mobile phone usage to elevated
levels of the stress hormone
Cortisol.
An overabundance of Cortisol
increases blood pressure,
heart rate, and anxiety, and
reduces mental performance...

58. Luckily the solution to these
concerns is easy...

59. If you want to control
your phone use
TURN OFF NOTIFICATIONS

60. Completion Bias is
probably the most
prevalently
leveraged heuristic
in this room

61. The 3 biases we experienced
are just a taste of the +100
biases known to science,
& the field of Behavioral
Economics is still relatively
new

62. CONCLUSION
To run a business we
must understand how
people feel & think.

63. Cognitive Biases offer a glimpse
into our shared psyche.
How we leverage them -
for better, or worse,
IS UP TO US...

64. To learn more check
out Daniel Kahneman on
TED & read his book
“Thinking Fast & Slow”
In 2002 Dr. Kahneman was
awarded the Nobel prize in
Economics for his work on decision
making & bias

65. THANK YOU!

66. Which animal
kills more people
per year?
★ SHARKS
★ COWS

67. 22 pax p.a. <1 pax p.a.