Monday, September 30, 2013

Daniel Kahnman's Favorite Paper: "On the Psychology of Prediction"

From Lakewood-Views:

Daniel Kahnman's favorite paper
I heard this story from a Credit Suisse seminar held by Michael Mauboussin. He is excellent investment thinker who ahs written a numbe rof provocatiev books on decison-making. Make time for Mike.

The great behavioral psychologist and Noble Prize Winner in Economics stated that of all the papers that he wrote the one that was his favorite was On the Psychology of Prediction written in 1973. In this work, Kahnaman with his co-author Amos Tversky discuss the difference between intuition and statistical prediction. They discuss the problem of representative bias and how there are three types of information for any prediction. There is the base case or outside view, there is the specifics about the particular case or inside view and finally the relative weights you assign to each....MORE
Here's an ungated version of the paper via the University of Washington (15 page PDF)

Also at Lakewood-Views: Wharton's Phil "Ignore confident forecasters" Tetlock:
Professor Christensen's paper "The Process of  Theory Building" is available from him at
We have five links to Christensen's thinking.