8 articles
Survivorship bias overstates the typical mutual fund's reported returns by roughly 1.6 percentage points a year, according to the University of Chicago's Center for Research in Security Prices: surviving U.S. stock funds averaged 8.8 percent over the decade ending 2003, while counting...
In a set of experiments published in 2011, people who assembled a plain IKEA storage box valued it 63 percent higher than an identical prebuilt one. The IKEA effect, named by the researchers who ran that study, is the bias that makes you overvalue what you built yourself. It quietly...
In a famous experiment, owners demanded twice what buyers would pay for the same mug. That's the endowment effect, and it quietly distorts the cloud versus self-hosting decision in both directions. The fix is to decide as if you owned neither option.
Imagining that a project has already failed raises a team's ability to correctly identify the reasons for a future outcome by about 30 percent, according to research by Deborah Mitchell, Jay Russo, and Nancy Pennington published in the Journal of Behavioral Decision Making. That single...
Across eight experiments published in Nature in 2021, people asked to improve an object, a plan, or an idea reliably reached for addition and overlooked subtraction, even when removing something was the better fix and sometimes the only right answer. The finding is inconvenient because...
Only 20 percent of executives say their organizations excel at decision making, and most report that much of the time they spend on it is used ineffectively. A large share of that waste comes from treating reversible decisions as if they were permanent. Amazon has a name for the...
Software maintenance accounts for 50 to 80 percent of a system's total lifecycle cost, according to decades of engineering research summarized in the peer-reviewed literature on maintenance economics. A large share of that money is spent touching things nobody currently understands....
Ask any AI how to improve your product and you'll get twenty good ideas. That's the problem — good ideas without a filter become scope creep with a veneer of intelligence.
