Tversky and Kahneman ran an experiment like this. In reality, the letter K is more common in position three than it is in position one in English words. It was easier to come up with words that started with K than words with K in third, wasn’t it?īut that doesn’t mean that K words are more common than blank blank K words. If you’re anything like me, you might have thought of words like Kitchen, Knife, Kiwi, then maybe biKing, poKer, and that’s it. Don’t cheat and look ahead! In a standard English book, which is more common? Words that start with the letter K or words where K is the third letter? The theory is that people judge how common something is by how easily it comes to mind for them (how available it is). The availability heuristicĪnother interesting concept discussed in The Undoing Project is availability. You can see the details from this 2009 experiment in the chart below.įor more examples of the halo effect in software, see Halo Effect by Nielsen Norman Group and The Halo Effect in Consumer Perception: Why Small Details Can Make a Big Difference. For example, attractive people are often perceived as smarter, nicer, or more skilled than they should be.Īs a designer, the key takeaway here is to make your software attractive! Not only will your users give you the benefit of the doubt in their perceptions, but they will also actually perform better. It’s hard for people to judge traits independently of each other. Let your customers customize their experience with your product so that they feel some ownership in it and therefore value it more. I’ve summarized this in the chart below.Īs a designer, you can use the endowment effect to your advantage. Sellers usually have a much higher price than buyers even though they were picked at random and have no sentimental value for these mugs.

Also ask the people without mugs, the mug “buyers” to name a price. Then get these mug “sellers” to name a price. Gather a group of people and give half of them a coffee mug. In practice, people tend to over value things that they own relative to things they don’t yet own.Ī famous example of this is the coffee mug experiment.

In theory, an individual’s selling price should equal their buying price, which should equal how much they value the good. If this article interests you, check out the book for the fascinating story behind these concepts and the psychologists that pioneered them! The endowment effect I’ve drawn from sources including Kahneman and Tversky, as well as other studies that lend themselves better to data visualization. This article is a visual summary of a few of the psychological principles that The Undoing Project touches on. Michael Lewis also wrote The Blind Side, Moneyball, and The Big Short, all of which ended up as feature films. This isn’t surprising, considering who the author is. The Undoing Project covers much of the same material as Thinking, Fast and Slow, but in an even more entertaining, approachable way.

Daniel kahneman the undoing project