John

“That was the moment I gave up on decision analysis,” said Danny. “No one ever made a decision because of a number. They need a story.” As Danny and Lanir wrote, decades later, after the U.S. Central Intelligence Agency asked them to describe their experience in decision analysis, the Israeli Foreign Ministry was “indifferent to the specific probabilities.”
― Michael Lewis, The Undoing Project: A Friendship That Changed Our Minds

“Wall Street trading desks at the end of each year offer a flavor of the problem. If a Wall Street trader expects to be paid a bonus of one million dollars and he’s given only half a million, he feels himself to be, and behaves as if he is, in the domain of losses. His reference point is an expectation of what he would receive. That expectation isn’t a stable number; it can be changed in all sorts of ways. A trader who expects to be given a million-dollar bonus, and who further expects everyone else on his trading desk to be given million-dollar bonuses, will not maintain the same reference point if he learns that everyone else just received two million dollars. If he is then paid a million dollars, he is back in the domain of losses. Danny would later use the same point to explain the behavior of apes in experiments researchers had conducted on bonobos. “If both my neighbor in the next cage and I get a cucumber for doing a great job, that’s great. But if he gets a banana and I get a cucumber, I will throw the cucumber at the experimenter’s face.” The moment one ape got a banana, it became the ape next door’s reference point. The reference point was a state of mind. Even in straight gambles you could shift a person’s reference point and make a loss seem like a gain, and vice versa. In so doing, you could manipulate the choices people made, simply by the way they were described. They gave the economists a demonstration of the point:”
― Michael Lewis, The Undoing Project: A Friendship That Changed Our Minds

“It is an infallible rule of management that if you let the people who work for you think they’ve come up with an idea they will strain to make it happen much more willingly than if the idea is seen to be yours.”
― Kevin Rodgers, Why Aren't They Shouting?: A Banker’s Tale of Change, Computers and Perpetual Crisis

“The trouble, Danny suspected, was that “the understanding of numbers is so weak that they don’t communicate anything. Everyone feels that those probabilities are not real—that they are just something on somebody’s mind.”
― Michael Lewis, The Undoing Project: A Friendship That Changed Our Minds