Further Reading — Chapter 24: Decision-Making Under Uncertainty

Foundational Texts

Kahneman, D. (2011). Thinking, Fast and Slow. Farrar, Straus and Giroux. The comprehensive synthesis of Kahneman's career of research on judgment and decision-making. The dual-process framework (System 1 / System 2), cognitive biases, prospect theory, the planning fallacy, availability, anchoring, and overconfidence are all treated in depth. Essential reading for anyone who wants to understand the cognitive science of decision-making. Not a light read — Kahneman is a precise thinker and the book reflects this — but one of the most consequential books in applied psychology of the past two decades. Parts III and IV are most directly relevant to this chapter.

Tversky, A., & Kahneman, D. (1974). Judgment under uncertainty: Heuristics and biases. Science, 185(4157), 1124–1131. The foundational paper establishing the heuristics and biases research program. Introduces availability, representativeness, and anchoring-and-adjustment as the primary cognitive shortcuts producing systematic errors. Under 20 pages; clearly written; one of the most cited papers in social science history. The starting point for any deep engagement with the field.

Kahneman, D., & Tversky, A. (1979). Prospect theory: An analysis of decision under risk. Econometrica, 47(2), 263–292. The paper for which Kahneman received the Nobel Prize. Prospect theory — reference dependence, loss aversion, diminishing sensitivity, probability weighting — is presented in full, with the experimental evidence. Technical in places but the core ideas are accessible and the figures illustrating the value function and probability weighting function are useful. Nobel citation called this the most cited paper in economics.

Accessible Books

Duke, A. (2018). Thinking in Bets: Making Smarter Decisions When You Don't Have All the Facts. Portfolio/Penguin. Duke's conversion of her poker-world probabilistic thinking into a decision-making framework for general readers. The central concept — decisions are bets, and bets can be good or bad regardless of outcomes — is the most practically useful reframe in this chapter. Her treatment of resulting, the "seeking like-minded company" problem (how social accountability can reinforce rather than correct bias), and her 10-10-10 application are all worth the read. The most engaging popular book on this topic list.

Gigerenzer, G. (2007). Gut Feelings: The Intelligence of the Unconscious. Viking. Gigerenzer's accessible argument for the rationality and reliability of fast and frugal heuristics. The counterweight to Kahneman — where Kahneman emphasizes the errors produced by heuristics, Gigerenzer emphasizes the domains where simple rules outperform complex analysis. Both are right, for different domains. Read together, they produce a more complete picture than either alone. Gigerenzer is a clear, engaging writer.

Tetlock, P. E., & Gardner, D. (2015). Superforecasting: The Art and Science of Prediction. Crown. The accessible account of Tetlock's Good Judgment Project, the largest research program on forecasting accuracy. The book profiles superforecasters — the ~2% of forecasters who consistently outperform expert panels — and identifies the cognitive habits that distinguish them: probabilistic thinking, active disconfirmation, belief updating, outside-view orientation, and calibration. The most practically applicable book in this list for anyone who makes predictions in professional life.

Russo, J. E., & Schoemaker, P. J. H. (1989). Decision Traps: Ten Barriers to Brilliant Decision-Making and How to Overcome Them. Doubleday. An older but durable treatment of the practical failure modes in decision-making. Covers confirmation bias, overconfidence, groupthink, and sunk costs in organizational contexts. Less theoretically sophisticated than Kahneman but more directly applicable to business and organizational decisions. Useful for readers primarily interested in the applied dimension.

Klein, G. (1998). Sources of Power: How People Make Decisions. MIT Press. Klein's account of naturalistic decision-making — how experts actually make decisions in high-stakes, time-pressured contexts. The recognition-primed decision model (experts recognize situations rather than comparing options) is developed here. Klein's research on firefighters, military commanders, and ICU nurses provides the counterpoint to the laboratory bias research: expertise in regularized domains produces reliable intuition. Essential for anyone who wants to understand when to trust intuition and when not to.

On Values and Identity in Decision-Making

Schwartz, B. (2004). The Paradox of Choice: Why More Is Less. Ecco. Schwartz's account of how increasing options reduces decision quality and wellbeing — not because people choose badly, but because more options increase opportunity cost awareness, increase regret, and raise expectations while reducing satisfaction with what is chosen. The satisficing/maximizing distinction is central. More directly relevant to consumer and lifestyle decisions than to strategic business decisions, but the psychological mechanisms apply broadly.

Welch, S. (2009). 10-10-10: 10 Minutes, 10 Months, 10 Years — A Life-Transforming Idea. Scribner. Welch's popular treatment of the 10-10-10 framework. Short and accessible; the framework is the chapter's contribution (described briefly in the chapter) and Welch applies it to a range of personal and professional decisions with sufficient variety to be useful. A quick read that generates the practical habit of temporal shifting in decision analysis.

Gilbert, D. (2006). Stumbling on Happiness. Knopf. Gilbert's research on affective forecasting — our systematic errors in predicting how future events will make us feel. We overestimate the emotional impact of both positive and negative events; we underestimate our capacity to adapt; we systematically mispredict what will make us happy. Directly relevant to decision-making whenever anticipated emotions are driving the choice (as they typically are for major life decisions). Engaging and accessible; Gilbert is an excellent popular writer.

Academic Sources

Tetlock, P. E. (2005). Expert Political Judgment: How Good Is It? How Can We Know? Princeton University Press. The academic version of the superforecasting research. Tetlock's two-decade tracking study of expert predictions finds that most expert forecasters perform barely better than chance — and are often worse than simple extrapolation algorithms. The distinction between foxes (who use multiple frameworks) and hedgehogs (who use one big idea) is the relevant conceptual contribution.

Janis, I. L. (1982). Groupthink: Psychological Studies of Policy Decisions and Fiascoes. Houghton Mifflin. The original account of groupthink. Janis analyzes the Bay of Pigs invasion, the Korean War escalation, the Pearl Harbor failure to prepare, and the Cuban Missile Crisis (which, unlike the others, avoided groupthink). The case study method is engaging and the theoretical analysis is careful. The most important book on group decision-making failure.

Gilovich, T., & Medvec, V. H. (1995). The experience of regret: What, when, and why. Psychological Review, 102(2), 379–395. The research establishing the asymmetry between action and inaction regrets over time — short-term regrets of action dominate; long-term regrets of inaction dominate. The paper supporting the regret minimization framework and Bezos's intuition about looking backward from old age.

The Character Reading Lists

Jordan is working through: - Thinking in Bets (Duke) — received as a recommendation from Sandra alongside a broader strategic reading list - Superforecasting (Tetlock & Gardner) — reading alongside his new practice of explicit probability estimates in the decision journal

Amara is working through: - The Paradox of Choice (Schwartz) — relevant to thinking about clinical interventions with clients who present with decision paralysis - Stumbling on Happiness (Gilbert) — recommended by Dr. Chen; she is thinking about how clients mispredict their affective futures