Glossary

Leaning on the first number you saw, such as a price, an offer or an estimate, when judging everything that comes after it. An anchor feels like information but is often just the order in which things reached you.

How often something happens in general, before you consider your own specific case. Ignoring the base rate is why a vivid story usually beats a statistic in most people's decisions.

Noticing the evidence that supports the option you already prefer, and quietly skipping the rest. It is why writing your criteria down before scoring anything makes a decision more honest.

The fall in decision quality after a long run of choices. Tired people default to the easiest option or postpone entirely, which is why the important choices belong early in the day.

A short written record of a decision, the information you had and what you expected to happen. It is the only reliable way to find out later whether you decide well, as opposed to whether you were lucky.

The average outcome of a choice if you could repeat it many times: each possible result multiplied by how likely it is, then added together. It is a strong guide for repeated decisions and a weak one for single, irreversible choices.

The same choice, described differently, producing different answers. A treatment described as 90% survival and one described as 10% mortality are the same fact, and restating a decision in the opposite frame is a cheap way to test it.

Losses feel roughly twice as heavy as equivalent gains. It explains why people refuse a fair bet, hold on to things too long, and overpay to avoid a small risk.

The extra value of one more unit of something. The first month of an emergency fund matters far more than the tenth, which is why equal amounts of money are rarely equally valuable to you.

The value of the best alternative you give up when you choose. Choosing one option always means not choosing another, and the real cost of the choice is whatever that other option was worth.

Choosing the option you would regret least, rather than the one with the best expected outcome. It is useful when the outcomes cannot honestly be compared on a single scale.

How easily a decision can be undone. Reversible choices deserve speed and cheap experiments, irreversible ones deserve care, and treating the two the same is one of the most common decision mistakes.

A quick check before committing: if this turns out badly, how expensive is it to undo? Anything cheap to undo can be tried rather than analysed.

The pull of the current situation simply because it is the current situation. Doing nothing is also a decision, and it carries its own costs and risks.

Money, time or effort you have already spent and cannot get back. It is irrelevant to the decision in front of you, even though it is usually the hardest thing to ignore.

Money available today is worth more than the same amount later, because it can be used or invested in the meantime. It is why future amounts are discounted when options are compared over different periods.

Giving up something in order to get something else. A decision with no trade-off is not really a decision, it is a preference — which is a useful way to spot the choices that deserve careful thought.