The Undoing Project
by Michael Lewis
Key Concepts
Prospect Theory
Explains how people evaluate risks and rewards differently, often irrationally, based on gains or losses.
Cognitive Biases
Systematic errors in thinking that predictably distort human judgment and decision-making.
Loss Aversion
The powerful tendency to feel the pain of losses more intensely than the pleasure of equivalent gains.
Heuristics Shortcuts
Mental shortcuts that simplify complex decisions but often lead to predictable errors.
Framing Effects
How the way information is presented profoundly alters perception and choice, regardless of the underlying facts.
Action Items
Actively identify your cognitive biases to make more rational choices.
Question your immediate intuitions, especially in high-stakes situations.
Reframe problems from different angles to uncover hidden assumptions.
Recognize loss aversion's influence on your risk-taking and decision-making.
Seek diverse opinions to counteract your own inherent mental shortcuts.
Core Thesis
Human judgment is systematically flawed, driven by predictable biases rather than pure rationality.
Mindset Shift
It fundamentally shifts the perception of human rationality, revealing our inherent and predictable susceptibility to cognitive biases.