ENDNOTES

PREFACE

1 Makridakis, S. and Hibon, M. (1979). The accuracy of forecasts: An empirical investigation, Journal of the Royal Statistical Society, Series A, 142, 97–145 (with discussion).

2 See also Sawyer, J. (1966). Measurement and prediction, clinical and statistical, Psychological Bulletin, 66(3), 178–200.

3 The concept of “illusion of control” is central to this book and owes much to the work of psychologist Ellen Langer. See Langer, E. J. (1975). The illusion of control, Journal of Personality and Social Psychology, 32 (2), 311–328.

4 BBC news, China’s “lucky” phone number, Tuesday, 19 August, 2003.

5 Sagan, C. (1996). The Demon-Haunted World: Science as a Candle in the Dark. New York, NY: Ballantine Books.

CHAPTER 1

1 See, for example, Gigerenzer, G. (2006). Out of the frying pan into the fire: Behavioral reactions to terrorist attacks, Risk Analysis, 26 (2), 347–351. But see also Su, J. C., et al. (2009). Evidence of a regional increase in impaired driving and traffic fatalities after the September 11 terrorist attacks. Psychological Science, 20(1), 59–65.

2 On average, fewer than 200 people die each year in airplane accidents in the USA compared to more than 40,000 in cars. This makes the life-long odds of dying in a car in the USA approximately 1 in 100, while those of dying in an airplane are around 1 in 20,000.

3 In two books, Nassim Nicholas Taleb discusses at length our inability to make accurate forecasts of the important events that affect our lives. See Taleb, N. N. (2004). Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets. New York, NY: Random House, and Taleb, N. N. (2007). The Black Swan: The Impact of the Highly Improbable. New York, NY: Random House.

4 For more information about our inability to predict accurately in the social domains, see Makridakis, S., Hogarth, R., and Gaba, A. (2010). Why forecasts fail. What to do instead. Sloan Management Review, 51(2), 83–91.

5 See Fenton-O’Creevy, M. et al. (2003). Trading on illusions: Unrealistic perceptions of control and trading performance, Journal of Occupational and Organizational Psychology, 76, 53–68.

CHAPTER 2

1 Kolata, G., Live long? Die young? Answer isn’t just in genes, New York Times, August 31, 2006.

2 Haggard, H. W. (1934). The Doctor in History. New Haven, CT: Yale University Press.

3 See seroxatsecrets.wordpress.com/2008/02, and Bass, A. (2008). Side Effects: A Prosecutor, a Whistleblower, and a Bestselling Antidepressant on Trial. Chapel Hill, NC: Algonquin Books.

4 Starfield, B. (2000). Is US health really the best in the world? The Journal of the American Medical Association, 284 (4), 483–485.

5 For further analysis of these stories, see Gigerenzer, G. (2002). Calculated Risks: How to Know When Numbers Deceive You. New York, NY: Simon and Schuster.

6 Ibid.

7 For all life expectancy figures, see www.nationmaster.com/graph/hea_lif_exp_at_bir_tot_pop-life-expectancy-birth-total-population

8 Ezzati, M. et al. (2003). Estimates of global and regional potential health gains from reducing multiple major risk factors, The Lancet, 362 (9380), 271–280.

9 Wright, J. C. et al. (1998). Gains in life expectancy from medical interventions – Standardizing data on outcomes, The New England Journal of Medicine, 339, 380–386.

10 Stamler, J. et al. (2000). Relationship of baseline serum cholesterol levels in 3 large cohorts of younger men to long-term coronary, cardiovascular, and all-cause mortality and to longevity, The Journal of the American Medical Association, 284, 311–318.

11 Taubes, G., What’s cholesterol got to do with it? New York Times, January 27, 2008. See also Taubes, G. (2007). Good Calories, Bad Calories: Challenging the Conventional Wisdom on Diet, Weight Control, and Disease. New York, NY: Alfred A. Knopf.

12 Cover story, Do cholesterol drugs do any good? Business Week, January 17, 2008

13 Rubenstein, S. New York probes vytorin study, Wall Street Journal, January 26, 2008

14 Doll, R. et al. (2004). Mortality in relation to smoking: 50 years’ observations on male British doctors, British Medical Journal, 328, 313–316.

15 Franco, O. H. et al. (2005). Effects of physical activity on life expectancy with cardiovascular disease, Archives of Internal Medicine, 165, 2355–2360.

16 Peeters, A. et al. (2003). Obesity in adulthood and its consequences for life expectancy: A life-table analysis, Annals of Internal Medicine, 138, 24–32.

17 Franco, O. H. et al. (2005). Blood pressure in adulthood and life expectancy with cardiovascular disease in men and women life course analysis, Hypertension, 46, 280–286.

18 Tworoger, S. S. et al. (2008). Caffeine, alcohol, smoking, and the risk of incident epithelial ovarian cancer, Cancer, 112 (5), 1169–1177.

19 Graudal, N. A. et al. (1998). Effects of sodium restriction on blood pressure, renin, aldosterone, catecholamines, cholesterols, and triglyceride: A meta-analysis, Journal of the American Medical Association, 279, 1383–1391.

20 A recently published study shows the positive effects of reduced salt intake on cardiovascular health. But the controversy continues. See Cook, N. R. et al. (2007). Long term effects of dietary sodium reduction on cardiovascular disease outcomes: observational follow-up of the trials of hypertension prevention (TOHP), British Medical Journal (April 28), 334 (7599), 885.

21 Van Den Akker, E. H. et al. (2004). Large international differences in (adeno)tonsillectomy rates, Clinical Otolaryngology & Allied Sciences, 29 (2), 161–164.

22 See Bjelakovic, G. et al. (2007). Mortality in randomized trials of antioxidant supplements for primary and secondary prevention: Systematic review and meta-analysis, The Journal of the American Medical Association, 297, 842–857.

23 Lawson, K. A. et al. (2007). Multivitamin use and risk of prostate cancer in the National Institutes of Health–AARP diet and health study, Journal of the National Cancer Institute, 99 (10), 754–764. Liz Baker, science information officer at Cancer Research UK, said: “It’s still not entirely clear what factors can affect a man’s risk of developing prostate cancer while there is conflicting evidence on the pros and cons of vitamin supplements these products don’t seem to give us the same benefits as vitamins that naturally occur in our food.”

24 See Hellmich, N. Obesity on track as No. 1 killer. USA Today, March 9, 2004. The underlying study was by Mokland, A. H. et al. (2004). Actual causes of death in the United States, 2000, Journal of the American Medical Association, 291 (10), 1283–1245.

25 See Flegal, K. M. et al. (2005). Excess deaths associated with underweight, overweight, and obesity. Journal of the American Medical Association, 293 (15), 1861–1867.

26 For a timeline on this whole controversry see ‘History of a great unraveling’ at www.consumerfreedom.org/article_detail.cfm?article=162

27 You can be too thin, after all. The New York Times, April 22, 2005.

28 Gronniger, J. T. (2006). A semiparametric analysis of the relationship of body mass index to mortality, American Journal of Public Health,96, 173–178

29 Flegal, K. et al. (2007). Cause-specific excess deaths associated with underweight, overweight, and obesity, The Journal of the American Medical Association, 298 (17), 2028–2037.

30 Sui, X. et al. (2007). Cardiorespiratory fitness and adiposity as mortality predictors in older adults, The Journal of the American Medical Association, 298 (21), 2507–2516.

31 Tatsioni, A. et al. (2007). Persistence of contradicted claims in the literature, The Journal of the American Medical Association, 298 (21), 2517–2526.

32 Gilbert, H. G. (2004). Should I be Tested for Cancer? Maybe Not and Here’s Why. Berkeley, CA: University of California Press, pp. 154–155. This cites Shapiro S. et al. Periodic Screening for Breast Cancer: The Health Insurance Plan Project and Its Sequelae, 1963-1986 (Johns Hopkins Series in Contemporary Medicine and Public Health).

33 Miller, A. B. et al. (1992). Canadian National Breast Screening Study: 1. Breast cancer detection and death rates among women aged 40 to 49 years, Canadian Medical Association Journal (November 15), 147 (10), 1459–1476.

34 Welch, H. G. (2004). Should I Be Tested for Cancer? Maybe Not and Here’s Why. Berkeley, CA: University of California Press, pp. 153–162. Even after five decades of testing, there is much debate about the value of mammography testing. See ije.oxfordjournals.org/cgi/content/abstract/33/1/43, as well as Olsen, O. et al. (2001). Cochrane review on screening for breast cancer with mammography, Lancet, 358, 1340–1342.

35 Adriole, G. L., et al. (2009). Mortality results from a randomized prostate-cancer screening trial, New England Journal of Medicine, 360 (13), 1310–1319.

36 Schröder, F. H., et al. (2009). Screening and prostate-cancer mortality in a randomized European study, New England Journal of Medicine, 360 (13), 1320–1328.

37 This is calculated as (112/162,837) × 1,000 = 0.7.

38 Franco, O. H. et al. (2005). Blood pressure in adulthood and life expectancy with cardiovascular disease in men and women life course analysis, Hypertension, 46, 284.

CHAPTER 3

1 Linde, C. et al. (1999). Placebo effect of pacemaker implantation in obstructive hypertrophic cardiomyopathy. PIC study group. Pacing in cardiomyopathy, American Journal of Cardiology, 83 (6), 903–907.

2 Coronary Drug Project Research Group. (1980). Influence of adherence to treatment and response of cholesterol on mortality in the coronary drug project, New England Journal of Medicine, 303 (18), 1038–1041.

3 In Spiro, H. M (ed.) (1986). Doctors, Patients, and Placebos. New Haven, CT: Yale University Press.

4 Mossey, J. M. and Shapiro, E. (2005). Self-rated health: a predictor of mortality among the elderly, Journal of Epidemiology and Community Health, 59, 794–798.

5 See, e.g., Chacko, K. M. and Anderson, R. J. (2007). The annual physical examination: important or time to abandon? American Journal of Medicine, 120(7), 581–583. In addition see the article “The Annual Rip-Off” in Time Magazine (Monday July 26, 1976) that provides strong evidence from more than thirty years ago showing that there is little value in annual check-ups.

6 Rabin, R., New screening advice for pregnant women, International Herald Tribune, January 10, 2007

7 Gigerenzer, G. (2002). Calculated Risks: How to Know when Numbers Deceive You. New York, NY: Simon & Schuster, p. 103.

8 Black, W. C. and Baron, J. (2007). CT screening for lung cancer; spiraling into confusion? The Journal of the American Medical Association, 297, 995–997.

9 Welch, H. G. (2004). Should I Be Tested for Cancer? Maybe Not and Here’s Why. Berkeley, CA: University of California Press.

10 Hadler, N. M. (2004). The Last Well Person: How to Stay Well Despite the Health-care System. Quebec City, Canada: McGill-Queens University Press.

11 Quoted by Carey, J. and Barrett, A. Is heart surgery worth it? Business Week, July 18, 2005.

12 Lemonick, M. D., Medicine’s secret stat, Time, Tuesday, Feb. 15, 2007.

13 Kennare, R. et al. (2007). Risks of adverse outcomes in the next birth after a first Cesarean delivery, Obstetrics & Gynecology, 109, 270–276.

14 “The preliminary rate of Cesarean delivery rose 4 percent in 2005 to 30.2 percent of all births, another record high for the Nation . . . The Cesarean rate declined somewhat during the early and mid-1990s, but has risen 46 percent since 1996 (from 20.7 percent).” (www.cdc.gov/nchs/data/nvsr/nvsr55//nvsr55_11.pdf)

15 www.nationmaster.com/graph/hea_bir_by_cae_sec-health-births-bycaesarean-section

16 As a matter of fact, the correlation between rates of Cesarians and infant mortality is 0.57 (and is statistically significant).

17 Mossialos, E. et al. (2005). An investigation of Cesarean sections in three Greek hospitals: The impact of financial incentives and convenience, European Journal of Public Health, 15, 288–295.

18 Weintraub, A. Physician, reveal thyself, Business Week, May 12, 2008.

19 News, Business Week on Line, July 18, 2005, www.businessweek.com/magazine/content/05_29/b3943037_mz011.htm

20 Fisher, E. S. et al. (2003). The implications of regional variations in medicare spending. Part 1: The content, quality, and accessibility of care, Annals of Internal Medicine, 138 ( 4), 273–287.

21 Romains, J. (1923). Knock, ou, Le triomphe de la medicine. Paris, France : Gallimard.

22 Welch, H. G. et al. What’s making us sick is an epidemic of diagnoses, The New York Times, January 2, 2007.

23 Foundation for Informed Medical Decision Making (www.fimdm.org).

24 Groopman, J. (2007). How Doctors Think. Boston, MA: Houghton Mifflin Company.

25 Wurzbacher, T. (2007). Your Doctor Said What? Exposing the Communication Gap. Ontario, Canada: LifeSuccess Publishing,

CHAPTER 4

1 Batra, R. (1988). The Great Depression of 1990. New York, NY: Simon & Schuster.

2 Glassman, J. K. and Hassett, K. A. (1999). Dow 36,000: The New Strategy for Profiting from the Coming Rise in the Stock Market. New York, NY: Random House.

3 Elias, D. (1999). Dow 40,000: Strategies for Profiting from the Greatest Bull Market in History. New York, NY: McGraw Hill.

4 Kadlec, C. W. (1999). Dow 100,000: Fact of Fiction. New York, NY: Prentice-Hall.

5 We note that by June 24, 2008 the DJIA had fallen to 11453, that is less than the high of 11722 it had reached almost eight and a half years earlier on January 14, 2000. So much for predicting a high of 36,000!

6 Shiller, R. J. (2000). Irrational Exuberance. Princeton, NJ: Princeton University Press.

7 For more information on the predictability of economic forecasters, see Makridakis, S., Hogarth, R., and Gaba, A. (2009). Forecasting and uncertainty in the economic and business world. International Journal of Forecasting, 25, 794–812.

8 Shiller, R. J. (2005). Irrational Exuberance (2nd ed.). Princeton, NJ: Princeton University Press.

9 Hamel, G. (2000). Leading the Revolution. Boston, MA: Harvard Business School Press, p. 212.

10 Figure 3 shows a much higher value than $675 because it depicts gold prices in constant 2006 dollars.

11 At the beginning of July 2008, the price of gold was about $935 per ounce.

12 Siegel, J. J. (2002). Stocks for the Long Run (3rd ed.). New York, NY: McGraw-Hill.

13 Dimson, E., Marsh, P., and Staunton, M. (2002). Triumph of the Optimists: 101 Years of Global Investment Returns. Princeton, NJ: Princeton University Press.

14 Again, note that we’re not reinvesting dividends and we’re assuming we can buy into funds that “track” both the DJIA index and the NASDAQ “composite” index of all its shares.

CHAPTER 5

1 Malkiel, B. G. and Saha A. (2005). Hedge funds: Risk and returns, Financial Analysts Journal, 61 (6), 80–88.

2 Kaplan, S. N. and Schoar, A.(2005). Private equity performance: Returns, persistence, and capital flows, The Journal of Finance, 60 (4),1791–1823.

3 Bird, S. The future of venture capital: Private equity gets more private, Focus Venture, January 6, 2004.

4 Malkiel, B. G. (1995). Returns from investing in equity mutual funds 1971 to 1991, The Journal of Finance, 50 (2), 549–572.

5 Kosowski, R. et al. (2006). Can mutual fund “stars” really pick stocks? New evidence from a bootstrap analysis, The Journal of Finance, 61 (6),2551–2595.

6 Nitzsche, D. et al. (2006). Mutual fund performance, Working Paper, University of London, Cass Business School.

7 Graham, J. R. and Harvey, C. R. (1997). Market timing ability and volatility implied in investment newsletters’ asset allocation recommendations, Working Paper 4890, National Bureau of Economic Research.

8 Jensen, M. (1967). The performance of mutual funds in the period 1945–1964, The Journal of Finance, 23 (2), 389–416. See also Carhart, M. R. (1997). On persistence in mutual fund performance, The Journal of Finance, 52 (1), 57–82.

9 Blake, C. R. et al. (1993). The performance of bond mutual funds, The Journal of Business, 66 (3), 371–403.

CHAPTER 6

1 Hammer, M. and Champy, J. (1993). Reengineering the Corporation: A Manifesto for Business Revolution. New York, NY: Harper Business.

2 Abrahamson, E. and Fairchild, G. (1999). Management fashion: Lifecycles, triggers, and collective learning processes, Administrative Science Quarterly, 44, 708–740.

3 Peters, T. and Waterman, R. H. Jr. (1982). In Search of Excellence: Lessons from America’s Best-Known Companies. New York, NY: Harper & Row.

4 Collins, J. and Porras, J. (1994). Built to Last: Successful Habits of Visionary Companies. New York, NY: HarperBusiness.

5 The survey started in 1983.

6 Popper, K. R. (1989). Objective Knowledge: An Evolutionary Approach (rev. ed.). Oxford, UK: Clarendon Press.

7 Kim, C. and Mauborgne, R. (2005). Blue Ocean Strategy: How to Create Uncontested Market Space and Make the Competition Irrelevant. Boston, MA: Harvard Business School Press.

8 Foster, R. and Kaplan, S. (2002). Creative Destruction: Why Companies that Are Built to Last Underperform the Market – and How to Successfully Transform Them. New York, NY: Currency.

9 De Geus, A. (2002). The Living Company: Habits for Survival in a Turbulent Business Environment. Boston, MA: Longview Publishing.

10 Foster, R. and Kaplan, S. (2002). Creative Destruction. p. 9.

11 Collins, J. (2001). Good to Great: Why Some Companies Make the Leap... and Others Don’t. New York, NY: HarperCollins.

12 Joyce, W., Nohria, N., and Roberson, B. (2003). What Really Works: The 4+2 Formula for Sustained Business Success. New York, NY: HarperCollins.

13 Marcus, A. (2006). Big Winners and Big Losers: The 4 Secrets of Long-Term Business Success and Failure. Philadelphia, PA: Wharton School Publishing.

CHAPTER 7

1 Schumpeter, J. (1942). Capitalism, Socialism and Democracy. New York, NY: Harper & Row, p. 83.

2 Quoted by Battelle, J. (2005). The Search: How Google and Its Rivals Rewrote the Rules of Business and Transformed Our Culture. New York, NY: Penguin.

3 Nayak, P. R. and Ketteringham, J. M. (1986). Break-Throughs. New York, NY: Rawson Associates.

4 Colvin, G. Steve Jobs’ bad bet: The visionary CEO didn’t have enough faith in Apple’s future, Fortune, March 5, 2007.

5 Foster, R. and Kaplan, S. (2002). Creative Destruction: Why Companies that Are Built to Last Underperform the Market – and How to Successfully Transform Them. New York, NY: Currency.

6 Ricadela, A. Google’s newest role: Venture capitalist, Business Week, September 4, 2007.

7 Komisar, R. (2000). The Monk and the Riddle: The Education of a Silicon Valley Entrepreneur. Boston, MA: Harvard Business School Press.

CHAPTER 8

1 Bernstein, P. L. (1996). Against the Gods: The Remarkable Story of Risk. New York, NY: John Wiley & Sons, pp. 15–16.

2 Wiseman, R. (2004). The Luck Factor. London, UK: Arrow Books.

CHAPTER 9

1 Bavelas, J. B. (1973). Effects of the temporal context of information, Psychological Reports, 32, 695–698.

2 Makridakis, S. and Hibon, M. (1979). The accuracy of forecasts: An empirical investigation, Journal of the Royal Statistical Society, Series A, 142, 97–145 (with discussion).

3 Makridakis, S. and Hibon, M. (2000). The M3-competition: Results, conclusions and implications, International Journal of Forecasting, 16 (4),451–476.

4 Meehl, P. (1954). Clinical versus statistical prediction: a theoretical analysis and a review of the evidence. Minneapolis, MN: The University of Minnesota Press.

5 See also Sawyer, J. (1966). Measurement and prediction, clinical and statistical, Psychological Bulletin, 66 (3), 178–200, and Kleinmuntz, B. (1990). Why we still use our heads instead of formulas: Toward an integrative approach, Psychological Bulletin, 107 (3), 295–310. Most recently Grove, W. M. et al. (2000). Clinical versus mechanical prediction: A meta-analysis, Psychological Assessment, 12 (1), 19–30, summarized the results of 136 studies comparing clinical and statistical judgments across a wide range of environments. They concluded by stating: “We identified no systematic exceptions to the general superiority (or at least material equivalence) of mechanical prediction. It holds in general medicine, in mental health, in personality, and in education and training settings. It holds for medically trained judges and for psychologists. It holds for inexperienced and seasoned judges.”

6 Clemen, R. T. (1989). Combining forecasts: A review and annotated bibliography, International Journal of Forecasting, (5), 559–583.

7 Surowiecki, J. (2005). The Wisdom of Crowds. New York, NY: Anchor Books.

8 Simon, H. A. and Sumner, R. K. (1968). Patterns in music. In B. Kleinmuntz (ed.), Formal Representation of Human Judgment. New York, NY: Wiley, p. 220.

9 For instructive examples of this principle, consider the many betting sites where one can place wagers on many different future events including sports and elections. The odds offered reflect the opinions of many people and, on average, are quite accurate.

10 For an interesting analysis of herd behavior, see Prechter, R. R., Jr. and Parker, W. D. (2007). The financial/economic dichotomy in social behavioral dynamics: The socionomic perspective. Journal of Behavioral Finance, 8(2), 84–108.

CHAPTER 10

1 Taleb, N. N. (2007). The Black Swan: The Impact of the Highly Improbable. New York, NY: Random House.

2 These stock market stories are based on reports in the public domain. We have, however, disguised names and places.

3 For the latest earthquakes in California and Nevada see, for example, the website http://quake.usgs.gov/recenteqs/

4 See Buchanan, M. (2001). Ubiquity: The Science of History or Why the World is Simpler than We Think. London UK: Phoenix.

5 See http://neic.usgs.gov/neis/eqlists/eqstats.html

6 Greenspan, A. (2007). The Age of Turbulence: Adventures in a New World. New York, NY: The Penguin Press.

7 See Daston, L. (1988). Classical Probability in the Enlightenment. Princeton, NJ: Princeton University Press.

8 Markowitz, H. (1952). Portfolio selection, The Journal of Finance, 7 (1), 77–91. Bruno De Finetti, a brilliant Italian mathematician had in fact introduced the exact same idea twelve years earlier in a paper published in an Italian insurance journal – see De Finetti, B. (1940). Il problema dei «pieni» (The problem of full risk insurance), Giornale dell’ Instituto Italiano degli Attuari, 11 (1), 1–88.

9 See Chesterton, G. K. (1908). Orthodoxy. Toronto, Canada: John Lane Company.

CHAPTER 11

1 Hamlet, Act 2, Scene 2.

2 Kahneman, D. and Tversky, A. (1979). Intuitive prediction: Biases and corrective procedures, TIMS Studies in Management Science, 12, 313–327.

3 Gladwell, M. (2005). Blink: The Power of Thinking without Thinking. London, UK: Penguin Books. In fact, the report of a colloquium held in 1992 in Athens where nineteen experts expressed their opinions about the authenticity of the Kouros indicates considerable disagreement among these experts (see chapter 12 for additional discussion of blinking and the Getty Kouros).

4 Howe, M. J. A. et al. (1998). Innate talents: Reality or myth? Behavioral and Brain Sciences, 21, 399–407.

5 Gigerenzer, G. et al. (1999). Simple Heuristics that Make Us Smart. New York, NY: Oxford University Press.

6 Shaw, G. B. (1950). Man and Superman: A Comedy and a Philosophy. Bel Air, CA: Amereon Limited.

7 Bacon, F. (1994). Novum Organum: With Other Parts of the Great Instauration. Chicago, IL: Open Court. (Original work published 1620.)

8 Ariely, D. (2008). Predictably Irrational: The Hidden Factors that Shape Our Decisions. New York, NY: HarperCollins.

9 Gigerenzer, G. (2002). Calculated Risks: How to Know when Numbers Deceive You. New York, NY: Simon & Schuster, p. 92.

10 Hogarth, R. M. (2006). Is confidence in decisions related to feedback? Evidence from random samples of real-world behavior. In K. Fiedler and P. Juslin (ed.), Information Sampling and Adaptive Cognition. Cambridge, UK: Cambridge University Press.

11 Ericsson, K. A. et al. (1993). The role of deliberate practice in the acquisition of expert performance, Psychological Review, 100 (3), 363–406.

12 Colvin, G. What it takes to be great: Research now shows that the lack of natural talent is irrelevant to great success. The secret? Painful and demanding practice and hard work, Fortune, October 19, 2006. See also Colvin, G. (2008). Talent is Overrated: What Really Separates World-Class Performers from Everybody Else. New York, NY: Penguin Books.

13 Csikszentmihalyi, M. (1997). Creativity: Flow and the Psychology of Discovery and Invention. New York, NY: Harper Perennial.

14 Daniel Kahneman, cited in Monitor on Psychology, 38 (9), October 2007, p. 13.

CHAPTER 12

1 Howard, J. W. and Dawes, R. M. (1976). Linear prediction of marital happiness, Personality and Social Psychology Bulletin, 2, 478–480.

2 Dawes, R. M. and Corrigan, B. (1974). Linear models in decision making, Psychological Bulletin, 81 (2), 95–106.

3 Showers, J. L. and Chakrin, L. M. (1981). Reducing uncollectible revenue from residential telephone customers, Interfaces, 11 (6), 21–34. Unfortunately, the authors of this study don’t reveal details of the formula they developed (e.g., they don’t specify the variables).

4 Einhorn, H. J. (1986). Accepting error to make less error. Journal of Personality Assessment, 50, 387–395.

5 Grove, W. M. et al. (2000). Clinical versus mechanical prediction: A meta-analysis, Psychological Assessment, 12 (1), 19–30.

6 Flyvbjerg, B. in association with Cowi (2004). Procedures for Dealing with Optimism Planning Bias in Transport. The British Department of Transport, UK.

7 McNeil, B. J. et al. (1982). On the elicitation of preference for alternative therapies, New England Journal of Medicine, 306, 1259–1262.

8 Blanchard, K. H. and Johnson, S., (2000). The One Minute Manager. New York, NY: Harper Collins Business; Hansen, M. V. and Allen, R. G. (2002). The One Minute Millionaire: The Enlightened Way to Wealth. New York, NY: Harmony Books; Johnson, S. and Candle Communications (1995). The One Minute Father. New York, NY: Collins; Johnson, S. and Candle Communications (1995). The One Minute Mother. New York, NY: Collins; Blanchard, K. H, Hudson, D., and Willis, E. (2008). The One Minute Entrepreneur: The Secret to Creating and Sustaining a Successful Business. New York, NY: Doubleday.

9 Ray, J. A. (2006). The Science of Success: How to Attract Prosperity and Create Harmonic Wealth® Through Proven Principles. Carlsbad, CA:. Sunark Press.

10 Ormerod, P. (2007). Why Most Things Fail: Evolution, Extinction and Economics. New York, NY:Wiley.

11 Herbold, R. J. (2007). Seduced by Success: How the Best Companies Survive the 9 Traps of Winning. New York, NY: McGraw-Hill.

12 Gladwell, M. (2005). Blink: The Power of Thinking without Thinking. London, UK: Penguin Books.

13 The Goulandris Foundation and the J. Paul Getty Museum (1993). The Getty Kouros Colloquium: Athens, 25–27 May 1992. Athens, Greece: Kapon Editions.

14 Tetlock, P. E. (2005). Expert Political Judgment: How Good Is It? How Can We Know? Princeton, NJ: Princeton University Press.

15 See, for example, Damasio, A. R. (1994). Descartes’ Error: Emotion, Reason, and the Human Brain. New York, NY: Avon; Bechara, A. et al. (1997). Deciding advantageously before knowing the advantageous strategy, Science, 275, 1293–1295; and Slovic, P. et al. (2002). The affect heuristic, in T. Gilovich, D. Griffin, and D. Kahneman (ed.). Intuitive Judgment: Heuristics and Biases. New York, NY: Cambridge University Press.

16 See also Hogarth, R. M. (2001). Educating Intuition. Chicago, IL: The University of Chicago Press.

CHAPTER 13

1 White, A., 2007, see www.le.ac.uk/pc/aw57/world/sample.html

2 Diener, E. and Seligman, M. (2004). Beyond money: Toward an economy of well-being, Psychological Science in the Public Interest, 5 (1),1–31.

3 Kahneman, D. et al. (2006). Would you be happier if you were richer? A focusing illusion, Science, 312 (5782), 1908–1910; Diener, E. (1984). Subjective well-being, Psychological Bulletin, 95, 542–575; Layard, R. (2005). Happiness: Lessons from a New Science. New York, NY: Penguin.

4 Layard, Happiness: Lessons from a New Science.

5 Seligman, M. E. P. (2002). Authentic Happiness: Using the New Positive Psychology to Realize Your Potential for Lasting Fulfillment. New York, NY: Free Press.

6 Easterlin, R. E. (1974). Does economic growth improve the human lot? Some empirical evidence. In P. A. David and M. W. Reder (ed.), Nations and Households in Economic Growth: Essays in Honour of Moses Abramowitz. New York, NY: Academic Press.

7 Layard, Happiness: Lessons from a New Science. For completeness, we add that some recent work has challenged conclusions such as these and, in particular, the implications depicted by our graph of life satisfaction versus per capita GDP. However, the statistical issues involved in interpreting this recent work are quite challenging and we believe it will take some time before the “correct” relation between happiness and income is understood. See B. Stevenson and J. Wolfers, Economic Growth and Subjective Well-being: Reassessing the Easterlin Paradox, Working Paper, University of Pennsylvania, May 2008.

8 Offer, A. (2006). The Challenge of Affluence: Self-Control and Well-Being in the United States and Britain since 1950. New York, NY: Oxford University Press.

9 Oswald, J. A. (1997). Happiness and economic performance, Economic Journal, 107 (445), 1815–1831.

10 Kahneman, D. et al. (2004). A survey method for characterizing daily life experience: The day reconstruction method, Science, 306 (5702),1776–1780.

11 Kahneman, A survey method for characterizing daily life experience.

12 Kahneman, A survey method for characterizing daily life experience.

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POSTSCRIPT

1 This book was first published in April 2009. The postscript was added in March 2010.

2 On November 4, 1979 the CBS Program 60 Minutes aired a program about how 46 million Americans were vaccinated by being made to believe that a flu pandemic was imminent. The video of the 60 minutes can be seen in YouTube while a transcript of it can be found in the link: http://www.globalresearch.ca/index.php?context=va&aid=14433

3 Daily Mail, (2010). The doctor’s receptionist paralysed by the swine flu jab, February 1, p. 29.

4 Brownlee, S. (2010). Cancer screening may do more harm then good, NBC, March 15. http://www.nbcwashington.com/news/health/Cancer_screening__Doing_more_harm_than_good_.html

5 Gardner, A. (2009). Recent cancer screening changes leave many confused: But experts say science is behind reasoning that testing less is OK. US News and World Report, November 24.

6 Begley, S. (2010). This won’t hurt a bit: How we can save billions by cutting out unnecessary procedures that kill tens of thousands a year. Newsweek, March 15.

7 Browning, E. S. (2010,). Worries rebound on bull’s birthday. Wall Street Journal, March 9.

8 Boyce, C. J., Brown, G. D. A., and Moore, S. C. (2010). Money and happiness: Rank of income, not income, affects life satisfaction. Psychological Science, 21(4) 471–475.