Letters Remain

Month: November 2024

  • The Cashless Effect: Financial Abstraction Increases Spending

    I previously wrote about the denomination effect, where people spend the coins faster than banknotes because coins are perceived as ‘smaller’, creating fewer psychological barriers. This raised the question of whether increased “financial abstraction” leads to higher spending, too. Indeed, research confirms that the lower the payment transparency, the greater the spend. This is the cashless…

  • Cats’ Social Intelligence and Rapid Image-Word Learning

    A recent study reveals that cats can learn image-word pairs faster than 14-month-old toddlers. However, it was the study’s introduction that caught my eye. It summarises a number of cat behaviour research findings, showing that cats have a complex social intelligence. For instance, they can differentiate between familiar and unfamiliar human voices, match voices to…

  • Cake Mixes, the IKEA Effect, and the Psychology of Effort

    In the index of cognitive biases (previously), I came across the IKEA effect: why do we place disproportionately high value on things we helped to create? Similar to the endowment effect (our tendency to overvalue our own belongings), the IKEA effect explains why we’re willing to pay a significant premium (over 60%!) for products that…

  • An Index of Cognitive Biases (Understanding (and Overcoming) Mental Shortcuts)

    I’ve shared lists of cognitive biases before, and books and blog posts on the topic are everywhere. To me, this stuff is like catnip. While doing further research into cognitive-debiasing training (inspired by Philip Tetlock’s research on forecasting), I stumbled across an extensive index of over 100 cognitive biases from The Decision Lab. The biases…

  • Four Steps to Better Predictions

    Following his work on geopolitical forecasting, Philip Tetlock co-founded The Good Judgement Project, along with decision scientist Barbara Mellers and UPenn colleague Don Moore. Their further research identified four key steps to improving forecast accuracy, shared on the (now archived) ‘Science’ section of the project’s site. These steps: And don’t forget the ten commandments of…

  • Hedgehogs, Foxes, and Prediction

    In reviewing Philip Tetlock’s Expert Political Judgment upon its release in 2005, The New Yorker of course discussed the main finding that expert judgements are not much better than those of lay forecasters. Another key focus of the review was Isaiah Berlin’s The Hedgehog and the Fox, a metaphor drawn from Archilochus sometime in the…

  • The Two Fundamental Truths of Prediction

    There are two fundamental truths of prediction: (i) there exists a “prediction horizon” where predictions beyond this point are inherently inaccurate; and (ii) experts are generally just bad at predicting. On that first point: our ability to predict is limited by the nature of complex systems. Weather forecasts, for example, are quite accurate a day…

  • Tsundoku and Eco’s Antilibrary

    Today I learnt of tsundoku: 19th-century Japanese slang for “the phenomenon of acquiring reading materials but letting them pile up in one’s home without reading them”. Yep, that’s me—with physical books, sure, but especially with ebooks. I love books as much as the next person, but I’m no bibliomaniac. Instead, I’m reminded of the more…

  • The Capital City Effect and Britain’s “Mississippi Question”

    Ranking Britain’s per capita GDP to that of the various US states seems to be of recurring interest to some in the British economic media—likely because the UK ranks surprisingly low. This has given rise to “the Mississippi question”: which is more economically productive per capita, Britain or the most impoverished US state, with the…

  • FAST not SMART for Goals

    The conventional SMART approach for setting goals undermines higher-level (team and/or organisational) objectives by promoting an individualistic and isolated approach to work. The best approach for creating effective goals, according to researchers at MIT Sloan, is to go FAST: Frequently discussed; Ambitious; Specific; and Transparent. According to their meta-analysis and additional field research across companies…