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The Incentives Lab
Learning path · 7 terms

The Kahneman Path

How a Nobel-winning psychologist rewired strategy

Daniel Kahneman showed that people don't decide based on reality — they decide based on perceived reality. These seven terms are the operating system underneath every boardroom that has ever surprised itself.

  1. 01
    Neuroscience · Decision

    System 1 vs. System 2

    Start here: the fast/slow split underneath every decision.

    Fast intuitive vs. slow deliberative thinking.

    Try it · 30 seconds
    Live · Catch system 1 vs. system 2

    'A bat and a ball cost $1.10. The bat costs $1 more than the ball. How much is the ball?'

    Open the full definition →
  2. 02
    Bias · Decision

    Anchoring Bias

    The first number always wins. Learn to set it.

    Over-reliance on the first number that hits the table.

    Try it · 30 seconds
    Live · Feel anchoring bias

    What % of CEOs do you think privately rate themselves above-average leaders?

    Don't overthink. Drag once.

    1%80%100%
    Open the full definition →
  3. 03
    Bias · Memory

    Availability Heuristic

    What's vivid feels true. What's true is often boring.

    We judge frequency by how easily examples come to mind.

    Try it · 30 seconds
    Live · Catch availability heuristic

    Which kills more Americans per year?

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  4. 04
    Bias · Decision

    Loss Aversion

    Losing $100 hurts ~2x more than winning $100 feels good.

    Losses hurt roughly twice as much as equivalent gains feel good.

    Try it · 30 seconds
    Live · Catch loss aversion

    Pick one. Quickly.

    Open the full definition →
  5. 05
    Bias · Decision

    Framing Effect

    Same data, opposite decision — change the frame.

    The same information lands differently depending on how it's wrapped.

    Try it · 30 seconds
    Live · Catch framing effect

    A surgery has the same outcome described two ways. Pick the one you'd consent to.

    Open the full definition →
  6. 06
    Bias · Memory

    Hindsight Bias

    Every disaster looks obvious in the post-mortem.

    Believing past events were obviously predictable once we know how they ended.

    Try it · 30 seconds
    Live · Catch hindsight bias

    After a launch flops, the post-mortem says 'we should have seen this coming.' Honestly:

    Open the full definition →
  7. 07
    Mental Models · Decision

    Prospect Theory

    The math that replaced 'rational utility' for good.

    People value gains and losses asymmetrically, and judge relative to a reference point.

    Try it · 30 seconds
    Live example · Apply Prospect Theory

    Use the model. Pick the move.

    People value gains and losses asymmetrically, and judge relative to a reference point. You've just seen this: A $100 bonus feels different than a $100 salary difference. Which lever does the model recommend?

    ● Live

    Pick a lever. There are no neutral ones — every incentive funds a behavior somewhere.

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Closing thought

If you only ever learn one cluster, learn this one. Every other path in the Atlas assumes it.

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