1. Illusion of knowledge
1.1. We are under the illusion that because we are familiar with and can describe what happens, we know why it happens
1.1.1. You only realise you don't know why things happen when you fail to predict what happens next
1.2. The more complex the situation the greater this illusion is likely to be
1.2.1. This is why big projects go wrong - Hofstadters law - "it will take longer than you think even if you take into account Hofstadters law"
1.2.2. It is a particular problem for modelling to find simple explanations of why something happens by analysing what happens
1.2.2.1. Its an illusion driven by believing that you know why things happen because
1.2.2.1.1. You understand how your simple model works
1.2.2.1.2. You have are familiar with what has happened so far in the complex system
1.2.2.1.3. You have access to detailed information about what is going on
1.2.2.2. Having these elements didn't help analysts to avoid the banking crash and sub prime lending
1.3. Sometimes the more information you have the greater the illusion of knowledge you have.
1.3.1. A lot of short term transactional data can blind you to longer term trends which may make it easier to see why things happen
1.3.2. Simply having a lot of information just gives you the illusion of knowledge
1.3.2.1. We are swamped with information today through the web and social media which gives us the illusion of knowledge about why things happen - we just know more about what is happening.
1.3.3. Exciting visual presentation of data can make you feel you understand more about something even if they don't give you any more information
2. Illusion of cause
2.1. We search for meaning in randomness by looking for explanations and causes by trying to find patterns which may not exist
2.2. The patterns we look for are often based on our expectations of what we believe we are likely to find
2.2.1. Patterns are abstractions by selecting those elements that fit the pattern and rejecting those that don't - background noise
2.2.2. When things happen close enough together we assume that the first causes the second and create a narrative or story
2.2.2.1. We also look for one cause to make our story work when there could be multiple causes from interconnected events
2.2.2.2. The effects and the cause may not be close together or even happen in the same place to the same people
2.2.3. We then fill in the gaps to what we assume is the narrative creating events that haven't actually happened
2.2.3.1. The narrative is actually more persuasive when we have to fill in the gaps
2.3. Sometimes the narrative bias we have ascribes a causal link where there is no direct evidence of there being one
2.3.1. You don't prove the effectiveness of a rock to keep away lions because there are no lions around when you have the rock
2.3.2. How many business books look at businesses that follow all their advice and fail?
2.3.3. Personal anecdotes of a causal link are so persuasive that they persist even in the face of overwhelming evidence of no link
2.3.3.1. Its easier to relate to a personal anecdote that statistics and analytics
3. illusion of Potential
3.1. There is vast untapped potential in the human mind that can be untapped with simple techniques
3.1.1. People continue to believe in these ideas even when there is ample evidence that they don't work
3.1.2. We remember times when our ideas are confirmed but don't register or forget when nothing happens
3.2. This illusion has been responsible for the false idea that subliminal advertising is effective
3.2.1. We take on more than we know in the environment at a subliminal level which can be the cause of our actions
3.2.2. There is no evidence for this after many studies but this belief has actually grown
3.3. Brain training only makes you better at the specific skill you train the brain for
3.3.1. It is easy to assume that a persons ability in one area is transferable to another - they may be as dumb as anyone else.
3.3.2. Brain training e.g., playing chess or video games can result in very narrow transfer to extremely similar tasks but not broad transfer
4. Illusion of attention
4.1. Watch this video
4.1.1. Did you see it - 50% of people don't and it has nothing to do with intelligence or gender
4.1.2. Is there a difference between people who notice and those who don't
4.1.2.1. Intelligence, educational achievement gender etc don't discriminate
4.1.2.2. Expertise helps but only if it expertise in the specific task at hand
4.2. Inatentional blindness - if you are focused on one thing you don't see something else unexpected
4.2.1. The more unusual or unexpected something is the less likely we are to notice it
4.2.2. The more you have to attend to the less likely you are to see something unexpected even when you are looking right at it
4.2.3. One way of seeing something is by making it more expected - more people looking the more likely they will expect what others don't
4.3. What can we do about it
5. Illusion of Memory
5.1. We don't remember exactly what happened like a film but reconstruct what happened through making sense of the few details we do remember AND FILL IN THE BLANKS
5.1.1. People remember what they expect to remember
5.1.2. Our memories are like stories that our minds recreate every time - a riff on a theme - which means they change
5.1.3. The more emotional or impactful the event (9/11) the more we wrongly believe we remember every detail - we don't
5.1.3.1. We can recreate (invent) some of the most striking details because they fit the event
5.2. You don't know what has changed unless you know what it has changed from
5.2.1. People even fail to notice obvious changes from one moment to the next - Change Blindness
5.2.2. The vast majority of people don't think they would miss these change but most do
5.2.2.1. 90% of people would claim they would notice if the person they where talking to suddenly changed in front of them but they do even when they change from a man to a woman
5.2.3. It turns out while we think we are good at spotting change we are lousy at it
5.3. Memories can also be incorporated from other people if they if they have a strong enough emotional impact - false memory syndrome
6. Illusion of Confidence
6.1. We suffer this illusion when judging others AND in judging ourselves
6.1.1. We judge whether we should trust what someone says by how confident they are BUT that could just as easily be evidence of their lack of knowledge and skill
6.1.2. 75% of people are consistently over confident in their own skills and abilities - even when they have evidence to the contrary
6.1.2.1. The less skilled people are the more over confident they tend to be - Unskilled and Unaware
6.1.2.2. The more you know the more you realize you don't know - Aristotle
6.1.3. Group dynamics tends to favour confidence over knowledge and skill
6.1.3.1. The leaders in a group are those who speak/give their opinion first - 94% of final answers where the first expressed
6.1.3.2. Others in the group take their confidence as an indicator of their abilities
6.1.3.2.1. But often the less people know the more confident they are likely to be
6.1.3.2.2. Confidence is also a character trait rather than an indication of ability - fake until you make it?
6.2. Confidence can be a guide to knowledge
6.2.1. If the level of confidence is unusual for the person
6.2.2. The level of confidence changes over time