Random Citizen

Ray Dalio is the founder and CEO of Bridgewater Associates, the largest and most successful hedge fund in the world. He has written a book, Principles, which shares the wisdom he’s learned over his 40-year career in finance. Lesson 1: Two of the most important principles are radical truthfulness and transparency. The more candid you can be about what you have done, are doing, and are going to do in the future, the more accurately can people weigh their feedback to you. What’s more, in a company this ensures mistakes are always uncovered and then learned from, rather than getting swept under the rug.

Bridgewater Associates co-founder Ray Dalio says the best companies are idea meritocracies – an idea meritocracy where the best ideas compete for attention. The Bridgewater team gives employees a safe space to express their ideas, and the team judges them accurately in order to choose which ones to implement.

Nudge is a choice book that shows you how you can unconsciously make better decisions by designing your environment so it nudges you in the right direction every time temptation becomes greatest. Nudge was co-authored by Cass Sunstein, who taught law for 27 years and worked in the Office of Information and Regulatory Affairs under Obama from 2009 to 2012. A default is a very powerful nudge, as it requires you to actively object for it to work. For example, if you send an email and type something like “please find attached” or “I’ll attach the file” in the email’s body and you then forget to upload the actual attachment, Gmail automatically prompts you with “Did you want to send an attachment with this?”. States and large institutions can use nudges to spur wise decisions at scale and make life better for everyone.

A nudge at scale costs a bit to set up, but its effects usually kick in fast. For example, since it’s become mandatory to report carbon emissions, the emissions themselves have gone down significantly – just because companies have to be transparent, they naturally compete to be eco-friendly.

Author Dan Ariely explains the hidden forces that drive how we make decisions, which are far less rational than we think. How we decide what things are worth to us and how we tackle long-term goals are all shockingly irrational. Give others easy comparisons, so they’ll value you more highly. Free is really just another price, but a powerful one. When people hear something is free they go insane.

Dan Ariely says free is a powerful emotional trigger, but at its core, it’s just another price – the price of zero dollars. If we buy something and it’s bad, we lose money. But if we get something for free, the potential downside is zero. So we value free items more highly than we should. If I buy something for $0.26 cents, chances are you wouldn’t quote me a price that’s twice as high if you’ve held it for more than a minute.

This is because we value things more highly once we own them – an effect known as the endowment effect. At Duke University, this phenomenon was investigated with baseball tickets and found that lottery winners who won tickets wouldn’t sell them for less than $2,400.

Gladwell’s Blink explains what happens when you listen to your gut feeling, why these snap judgments are often much more efficient than conscious deliberating, and how to avoid your intuition leading you to wrong assumptions. The book can help you understand how your own intuition works, and when it’s best to trust it or keep analyzing. In stressful situations, your ability to read other people’s facial expressions rapidly declines. This inability to read nonverbal cues is very common among autistic people. When you find yourself in a stressful situation, this can render you temporarily autistic, and you develop a sort of tunnel vision.

This will lead your gut to make the wrong call oftentimes, so it should be prevented whenever possible. You might expect every Asian to be good at math, Fortune 500 CEOs as tall, and white men to be beautiful. But if you’re an agent for a record label, that’s a problem. You’re supposed to find the best singers, not models. Try to think of a few screens and filters you could use to make sure you only get relevant information.

The Art of Thinking Clearly by Rolf Dobelli is a compendium of the psychological biases that once helped us survive but now only hinder us from living our best life. With specific examples of these thought patterns and ways to overcome them, this book is both entertaining and informative. To combat the illusion of control, be wary of your predictions. One study found that people with a button in their booth withstood much more noise than those without a button. Taking your more attractive friend to a club with you is a bad idea.

Doing this makes you less likely to score a date. When companies use the idea of scarcity to get customers to buy, the brain sees a potential missed opportunity and resorts to making a purchase. If a $100 item becomes $70, we see it as better than an item that is normally just $70 only because of the comparison. A study on dating sites examined the effects of the stress that comes with choosing between a large variety of potential partners.