Behavioural Economics, Entrepreneurship, Marketing, psychology

The Peak-end Rule

One thing that truly fascinates me is the human brain with its many quirks and twists. I love the way it makes shortcuts and finds loopholes to function optimally and help us make decisions.

This week I immersed myself in one of my favorite cognitive heuristics, namely, ‘The Peak-End Rule’. A rule that was first brought to light by psychologist and economist Daniel Kahneman and researcher Barbara Frederickson.

In a nutshell, the peak-end rule is a mental shortcut in which people judge an experience primarily based on how they felt at its peak (i.e., its most intense point) and its end, rather than based on the total average of every moment of the experience.”

It is a mechanism the brain uses to compensate for its limitations. See, our brains can only process and remember so much, and hence our cognitive processing system creates shortcuts to more efficiently:

  • sort through any incoming information,
  • integrate that information,
  • process it,
  • and then make a decision.

In other words, we compensate because we are limited in the amount of detail our memories will hold! And with that compensation comes the tendency only to recall the peaks and endings of things we experience throughout life.

If you click the link below, you can watch a little animation where we explore the rule in greater detail.  We hope you will enjoy it!

And by the way…If you are interested in learning more about the Peak-End Rule, our friends over at InsideBE.com wrote a cool – and very recommendable – article called The Peak-End Rule – Everything You Need to Know   

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thinking fast and slow (what you see it all there is) by daniel kahneman
Behavioural Economics, Leadership Development, Personal Development

Thinking, Fast and Slow by Daniel Kahneman – What You See is All There is

Today’s Big Idea is the next in the series on ‘Thinking, Fast and Slow’ by Daniel Kahneman. In the book, he explores the way in which the mind makes decisions and judgments. He does this by addressing the complexity of the human mind. The book offers a better understanding of ‘how decisions are made’, ‘why certain judgment errors are so common’ and ‘how we can improve ourselves’.

In this video, we will focus on a principle which Kahneman labels ‘What You See Is All There Is’! For your ease of reference, it is introduced in Chapter 7; ‘A Machine for Jumping to Conclusions’

Often the combination of a coherence-seeking ‘System 1’ and a lazy ‘System 2‘ entails that ‘System 2’ endorses the intuitive beliefs of ‘System 1’ solely based on the principle of ‘What You See Is All There Is’! This is why humans can think fast and are able to make sense of partial information in a complex world.

And there you have it – the principle of ‘What You See Is All There Is’…

If you are not already familiar with the work of Kahneman we recommend that you check out our three other blog posts on ‘Thinking, Fast and Slow’. In the first, we focus on ‘System 1’ and ‘System 2’ , in the second, we focus on ‘Heuristics and Biases’ , and in the third, we focus on ‘The Halo Effect’.

As always, I highly recommend reading the book, but should you feel short on time you can watch our animated summary by clicking the link below.

I hope you will enjoy the video. That it will inspire you, help you Grow your Mind and Motivate You to be The Best You!

You can check out the video here.

If you do decide to visit The channel please remember to Subscribe so you don’t miss out on future Big Ideas!! 

**And If you enjoy our videos, please consider supporting us on Patreon – Your support would not only mean the world to us but also allow us to continue making awesome FREE content.

Become a Patron!

Take care and see you soon.

This is our Bouillon Cube summary of the book. As always we highly recommend reading the whole book. You can buy it by clicking this link.

thinking fast and slow (the halo effect) by daniel kahneman
Behavioural Economics, Leadership Development, Personal Development

Thinking, Fast and Slow by Daniel Kahneman – The Halo Effect

Today’s Big Idea is the next in the series on ‘Thinking, Fast and Slow’ by Daniel Kahneman. In the book, he explores the way in which the mind makes decisions and judgments. He does this by addressing the complexity of the human mind. The book offers a better understanding of ‘how decisions are made’, ‘why certain judgment errors are so common’ and ‘how we can improve ourselves’.

Today, we will focus on a Bias which Kahneman labels ‘The Halo Effect’!

The halo effect is a common bias that plays a large role in shaping our view of people and situations. For your ease of reference, ‘The Halo Effect’ is introduced in Chapter 7 called ‘A Machine for Jumping to Conclusions’.

It goes like this: If you like the president’s politics, you probably like his voice and his
appearance as well. The tendency to like (or dislike) everything about a
person—including things you have not observed—is known as ‘The Halo
Effect’.

If you are not already familiar with the work of Kahneman we recommend that you check out our two other blog posts on ‘Thinking, Fast and Slow’. In the first, we focus on ‘System 1’ and ‘System 2’ and in the second, we focus on ‘Heuristics and Biases’.

As always, I highly recommend reading the book, but should you feel short on time you can watch our animated summary by clicking this link check out the video here.

If you do decide to visit The channel please remember to Subscribe so you don’t miss out on future Big Ideas!! 

**And If you enjoy our videos, please consider supporting us on Patreon – Your support would not only mean the world to us but also allow us to continue making awesome FREE content.

Become a Patron!

Take care and see you soon.

This is our Bouillon Cube summary of the book. As always we highly recommend reading the whole book. You can buy it by clicking this link.

thinking fast and slow (heuristics and biases) by daniel kahneman
Behavioural Economics, Leadership Development, Personal Development

Thinking, Fast and Slow by Daniel Kahneman – Heuristics and Biases

Today I have posted the second video in my series on ‘Thinking Fast and Slow’ by Daniel Kahneman. This part is about Heuristics and Biases.

If you are not already familiar with the work of Kahneman we recommend that you check out our blog post on the other video on ‘Thinking, Fast and Slow’ where we focus on ‘System 1’ and ‘System 2’ here.

The book offers a better understanding of ‘how decisions are made’, ‘why certain judgment errors are so common’ and ‘how we can improve ourselves’.

In this video, we will focus on some key definitions from the second part of the book called: Heuristics and Biases.

In this video, we will focus on some key definitions from the second part of the book called: Heuristics & Biases.

Here Kahneman demonstrates repeatedly how easily Heuristic methods and Biases can lead to misinterpretations and misunderstandings. This is due to the fact that the automatic System 1 finds relationships and causality where none exist and hence assign greater meaning to something that actually occurred due to chance.

I highly recommend reading ‘Thinking, Fast and Slow’, but should you feel short on time you can watch our animated summary by clicking this link check out the video here.

If you do decide to visit The channel please remember to Subscribe so you don’t miss out on future Big Ideas!! 

**And If you enjoy our videos, please consider supporting us on Patreon – Your support would not only mean the world to us but also allow us to continue making awesome FREE content.

Become a Patron!

Take care and see you soon.

This is our Bouillon Cube summary of the book. As always we highly recommend reading the whole book. You can buy it by clicking this link.

thinking fast and slow (system 1 and 2) by daniel kahneman
Behavioural Economics, Leadership Development, Personal Development

Thinking, Fast and Slow by Daniel Kahneman

Today’s Big Idea comes from Nobel Prize winner Daniel Kahneman and his international bestseller “Thinking, Fast and Slow”.

In the book, he explores the way in which the mind makes decisions and judgments. He does this by addressing the complexity of the human mind.

The book offers a better understanding of how decisions are made, why certain judgment errors are so common and how we can improve ourselves.

In this week’s video we will focus on what he calls the ‘two main characters of the human mind’:

  • The impulsive automatic, intuitive ‘System 1’
  • and the thoughtful, deliberate calculating ‘System 2’.

As these two systems play off against each other their interactions determine how we think, make judgements and act.

I highly recommend reading the book however should you not have time for that right now, check out our Bouillon Cube summary by clicking the link below.

I hope you will enjoy the video. That it will inspire you, help you Grow your Mind and Motivate You to be The Best You!

You can check out the video here.

If you do decide to visit The channel please remember to Subscribe so you don’t miss out on future Big Ideas!! 

**And If you enjoy our videos, please consider supporting us on Patreon – Your support would not only mean the world to us but also allow us to continue making awesome FREE content.

Become a Patron!

Take care and see you soon.

This is our Bouillon Cube summary of the book. As always we highly recommend reading the whole book. You can buy it by clicking this link.