However, optimism is highly valued, socially and in the market; people and firms reward the providers of dangerously misleading information more than they reward truth tellers. One of the lessons of the financial crisis that led to the Great Recession is that there are periods in which competition, among experts and among organizations, creates powerful forces that favor a collective blindness to risk and uncertainty.
Interpretation
Optimism can lead to a preference for falsehoods over truth, particularly in competitive environments.
In this quote, Daniel Kahneman highlights the societal and market tendency to value optimism, often resulting in the reward of misleading information over truthful insights. The financial crisis exemplifies how competition among experts can foster a collective disregard for risks and uncertainties, ultimately contributing to detrimental outcomes.
In practice
In a discussion about the financial crisis, one could say, 'As Daniel Kahneman pointed out, optimism can overshadow the truth, leading to reckless decisions.'
We think, each of us, that we're much more rational than we are. And we think that we make our decisions because we have good reasons to make them. Even when it's the other way around. We believe in the reasons, because we've already made the decision.
The average investor's return is significantly lower than market indices due primarily to market timing.
Banks are run by executives, and executives protect themselves, and that does not always mean that banks are going to behave rationally.
Laziness is built deep into our nature.
Through some combination of culture and biology, our minds are intuitively receptive to religion.
You are more likely to learn something by finding surprises in your own behavior than by hearing surprising facts about people in general.
We all carry it within us: supreme strength, the fullness of wisdom, unquenchable joy. It is never thwarted, and cannot be destroyed.
If you are only skeptical, then no new ideas make it through to you.
I said yes too much. I said yes to certain projects that weren't for me. It was somebody else's vision and somebody else's dream and somebody else's artistic endeavor, but it didn't necessarily fit in my grand scheme.
You will not become a saint through other people's sins.
The Red Poppy The great thing is not having a mind. Feelings: oh, I have those; they govern me. I have a lord in heaven called the sun, and open for him, showing him the fire of my own heart, fire like his presence. What could such glory be if not a heart? Oh my brothers and sisters, were you like me once, long ago, before you were human? Did you permit yourselves to open once, who would never open again? Because in truth I am speaking now the way you do. I speak because I am shattered.
You need not even listen, just wait...the world will offer itself freely to you, unmasking itself.
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