"Thinking: Fast and Slow" notes

• 1. Regression is often difficult to allow for.

  2. Since people often collapse data to “Who’s # 1?”, regression matters.

YOUR KINDLE NOTES FOR: Thinking, Fast and Slow

by Daniel Kahneman

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69 Highlights | 39 Notes

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Why be concerned with gossip? Because it is much easier, as well as far more enjoyable, to identify and label the mistakes of others than to recognize our own. Questioning what we believe and want is difficult at the best of times, and especially difficult when we most need to do it, but we can benefit from the informed opinions of others. Many of us spontaneously anticipate how friends and colleagues will evaluate our choices; the quality and content of these anticipated judgments therefore matters. The expectation of intelligent gossip is a powerful motive for serious self-criticism, more powerful than New Year resolutions to improve one’s decision making at work and at home.

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Most impressions and thoughts arise in your conscious experience without your knowing how they got there. You cannot trace how you came to the belief that there is a lamp on the desk in front of you, or how you detected a hint of irritation in your spouse’s voice on the telephone, or how you managed to avoid a threat on the road before you became consciously aware of it. The mental work that produces impressions, intuitions, and many decisions goes on in silence in our mind.

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For example, I recently came to doubt my long-held impression that adultery is more common among politicians than among physicians or lawyers. I had even come up with explanations for that “fact,” including the aphrodisiac effect of power and the temptations of life away from home. I eventually realized that the transgressions of politicians are much more likely to be reported than the transgressions of lawyers and doctors. My intuitive impression could be due entirely to journalists’ choices of topics and to my reliance on the availability heuristic.

availability explains lots

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Most of us are pitch-perfect in detecting anger in the first word of a telephone call, recognize as we enter a room that we were the subject of the conversation, and quickly react to subtle signs that the driver of the car in the

next lane is dangerous. Our everyday intuitive abilities are no less marvelous than the striking insights of an experienced firefighter or physician—only more common.

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The question that the executive faced (should I invest in Ford stock?) was difficult, but the answer to an easier and related question (do I like Ford cars?) came readily to his mind and determined his choice. This is the essence of intuitive heuristics: when faced with a difficult question, we often answer an easier one instead, usually without noticing the substitution.

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In such cases we often find ourselves switching to a slower, more deliberate and effortful form of thinking. This is the slow thinking of the title. Fast thinking includes both variants of intuitive thought—the expert and the heuristic—as well as the entirely automatic mental activities of perception and memory, the operations that enable you to know there is a lamp on your desk or retrieve the name of the capital of Russia.

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Part 5 describes recent research that has introduced a distinction between two selves, the experiencing self and the remembering self, which do not have the same interests. For example, we can expose people to two painful experiences. One of these experiences is strictly worse than the other, because it is longer. But the automatic formation of memories—a feature of System 1—has its rules, which we can exploit so that the worse episode leaves a better memory. When people later choose which episode to repeat, they are, naturally, guided by their remembering self and expose themselves (their experiencing self) to unnecessary pain. The distinction between two selves is applied to the measurement of well-being, where we find again that what makes the experiencing self happy is not quite the same as what satisfies the remembering self. How two selves within a single body can pursue happiness raises some difficult questions, both for individuals and for societies that view the well-being of the population as a policy objective.

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Several psychological studies have shown that people who are simultaneously challenged by a demanding cognitive task and by a temptation are more likely to yield to the temptation. Imagine that you are asked to retain a list of seven digits for a minute or two. You are told that remembering the digits is your top priority. While your attention is focused on the digits, you are offered a choice between two desserts: a sinful chocolate cake and a virtuous fruit salad. The evidence suggests that you would be more likely to select the tempting chocolate cake when your mind is loaded with digits. System 1 has more influence on behavior when System 2 is busy, and it has a sweet tooth.

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recently reported in the Proceedings of the National Academy of Sciences. The unwitting participants in the study were eight parole judges in Israel. They spend entire days reviewing applications for parole. The cases are presented in random order, and the judges spend little time on each one, an average of 6 minutes. (The default decision is denial of parole; only 35% of requests are approved. The exact time of each decision is recorded, and the times of the judges’ three food breaks—morning break, lunch, and afternoon break—during the day are recorded as well.) The authors of the study plotted the proportion of approved requests against the time since the last food break. The proportion spikes after each meal, when about 65% of requests are granted. During the two hours or so until the judges’ next feeding, the approval rate drops

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This complex constellation of responses occurred quickly, automatically, and effortlessly. You did not will it and you could not stop it. It was an operation of System 1. The events that took place as a result of your seeing the words happened by a process called associative activation: ideas that have been evoked trigger many other ideas, in a spreading cascade of activity in your brain. The essential feature of this complex set of mental events is its coherence. Each element is connected, and each supports and strengthens the others. The word evokes memories, which evoke emotions, which in turn evoke facial expressions and other reactions, such as a general tensing up and an avoidance tendency. The facial expression and the avoidance motion intensify the feelings to which they are linked, and the feelings in turn reinforce compatible ideas. All this happens quickly and all at once, yielding a self-reinforcing pattern of cognitive, emotional, and physical responses that is both diverse and integrated—it has been called associatively coherent. In a second or so you accomplished, automatically

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An odd feature of what happened is that your System 1 treated the mere conjunction of two words as representations of reality. Your body reacted in an attenuated replica of a reaction to the real thing, and the emotional response and physical recoil were part of the interpretation of the event. As cognitive scientists have emphasized in recent years, cognition is embodied; you think with your body, not only with your brain.

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The cleansing is highly specific to the body parts involved in a sin. Participants in an experiment were induced to “lie” to an imaginary person, either on the phone or in e-mail. In a subsequent test of the desirability of various products, people who had lied on the phone preferred mouthwash over soap, and those who had lied in e- mail preferred soap to mouthwash.

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The mere exposure effect occurs, Zajonc claimed, because the repeated exposure of a stimulus is followed by nothing bad. Such a stimulus will eventually become a safety signal, and safety is good. Obviously, this argument is not restricted to humans. To make that point, one of Zajonc’s associates exposed two sets of fertile chicken eggs to different tones. After they hatched, the chicks consistently emitted fewer distress calls when exposed to the tone they had heard while inhabiting the shell.

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A story in Nassim Taleb’s The Black Swan illustrates this automatic search for causality. He reports that bond prices initially rose on the day of Saddam Hussein’s capture in his hiding place in Iraq. Investors were apparently seeking safer assets that morning, and the Bloomberg News service flashed this headline: U.S. TREASURIES RISE; HUSSEIN CAPTURE MAY NOT CURB TERRORISM. Half an hour later, bond prices fell back and the revised headline read: U.S. TREASURIES FALL; HUSSEIN CAPTURE BOOSTS ALLURE OF RISKY ASSETS. Obviously, Hussein’s capture was the major event of the day, and because of the way the automatic search for causes shapes our thinking, that event was destined to be the explanation of whatever happened in the market on that day. The two headlines look superficially like explanations of what happened in the market, but a statement that can explain two contradictory outcomes explains nothing at all. In fact, all the headlines do is satisfy our need for coherence: a large event is supposed to have consequences, and consequences need causes to explain them.

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The disruption of System 2 had a selective effect: it made it difficult for people to “unbelieve” false sentences. In a later test of memory, the depleted participants ended up thinking that many of the false sentences were true. The moral is significant: when System 2 is otherwise engaged, we will believe almost anything. System 1 is gullible and biased to believe, System 2 is in charge of doubting and unbelieving, but System 2 is sometimes busy, and often lazy. Indeed, there is evidence that people are more likely to be influenced by empty persuasive messages, such as commercials, when they are tired and depleted.

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When asked, “Is Sam friendly?” different instances of Sam’s behavior will come to mind than would if you had been asked “Is Sam unfriendly?” A deliberate search for confirming evidence, known as positive test strategy, is also how System 2 tests a hypothesis. Contrary to the rules of philosophers of science, who advise testing hypotheses by trying to refute them, people (and scientists, quite often) seek data that are likely to be compatible with the beliefs they currently hold. The confirmatory bias of System 1 favors uncritical acceptance of suggestions and exaggeration of the likelihood of extreme and improbable events. If you are asked about the probability of a tsunami hitting California within the next thirty years, the images that come to your mind are likely to be images of tsunamis, in the manner Gilbert proposed for nonsense statements such as “whitefish eat candy.” You will be prone to overestimate the probability of a disaster.

My mistake was particularly embarrassing because I taught statistics and knew how to compute the sample size that would reduce the risk of failure to an acceptable level. But I had never chosen a sample size by computation. Like my colleagues, I had trusted tradition and my intuition in planning my experiments and had never thought seriously about the issue.

very common practice partly due to cost and time needed for large sample

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Anchoring effects explain why, for example, arbitrary rationing is an effective marketing ploy. A few years ago, supermarket shoppers in Sioux City, Iowa, encountered a sales promotion for Campbell’s soup at about 10% off the regular price. On some days, a sign on the shelf said limit of 12 per person. On other days, the sign said no limit per person. Shoppers purchased an average of 7 cans when the limit was in force, twice as many as they bought when the limit was removed. Anchoring is not the sole explanation. Rationing also implies that the goods are flying off the shelves, and shoppers should feel some urgency about stocking up. But we also know that the mention of 12 cans as a possible purchase would produce anchoring even if the number were produced by a roulette wheel.

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We saw in the discussion of the law of small numbers that a message, unless it is immediately rejected as a lie, will have the same effect on the associative system regardless of its reliability. The gist of the message is the story, which is based on whatever information is available, even if the quantity of the information is slight and its quality is poor: WYSIATI. When you read a story about the heroic rescue of a wounded mountain climber, its effect on your associative memory is much the same if it is a news report or the synopsis of a film. Anchoring results from this associative activation. Whether the story is true, or believable, matters little, if at all. The powerful effect of random anchors is an extreme case of this phenomenon, because a random anchor obviously provides no information at all.

anchors affect us

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Strokes cause almost twice as many deaths as all accidents combined, but 80% of respondents judged accidental death to be more likely.

Kahnenn: actual experience vs. guesses

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Tornadoes were seen as more frequent killers than asthma, although the latter cause 20 times more deaths.

guess which causes death:

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Death by lightning was judged less likely than death from botulism even though it is 52 times more frequent.

lightning or botulism

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Death by disease is 18 times as likely as accidental death, but the two were judged about equally likely.

disease far more than accidents

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Death by accidents was judged to be more than 300 times more likely than death by diabetes, but the true ratio is 1:4.

not accidents so much as diabetes

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The world in our heads is not a precise replica of reality; our expectations about the frequency of events are distorted by the prevalence and emotional intensity of the messages to which we are exposed.

novelty, poignancy and media coverage

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On some occasions, a media story about a risk catches the attention of a segment of the public, which becomes aroused and worried. This emotional reaction becomes a story in itself, prompting additional coverage in the media, which in turn produces greater concern and involvement. The cycle is sometimes sped along deliberately by “availability entrepreneurs,” individuals or organizations who work to ensure a continuous flow of worrying news. The danger is increasingly exaggerated as the media compete for attention-grabbing headlines. Scientists and others who try to dampen the increasing fear and revulsion attract little attention, most of it hostile:

chicken little cycle

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vague notion, related to uncertainty, propensity, plausibility, and surprise. The vagueness is not particular to this concept, nor is it especially troublesome. We know, more or less, what we mean when we use a word such as democracy or beauty and the people we are talking to understand, more or less, what we intended to say. In all the years I spent asking questions about the probability of events, no one ever raised a hand to ask me, “Sir, what do you mean by probability?” as they would have done if I had asked them to assess a strange concept such as globability. Everyone acted as if they knew how to answer my questions, although we all understood that it would be unfair to ask them for an explanation of what the word means.

most of the time we have a vague sense of what we mean

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People who are asked to assess probability are not stumped, because they do not try to judge probability as statisticians and philosophers use the word. A question about probability or likelihood activates a mental shotgun, evoking answers to easier questions. One of the easy answers is an automatic assessment of representativeness—routine in understanding language. The (false) statement that “Elvis Presley’s parents wanted him to be a dentist” is mildly funny because the discrepancy between the images of Presley and a dentist is detected automatically. System 1 generates an impression of similarity without intending to do so. The representativeness heuristic is involved when someone says “She will win the election; you can see she is a winner” or “He won’t go far as an academic; too many tattoos.” We rely on representativeness when we judge the potential leadership of a candidate for office by the shape of his chin or the forcefulness of his speeches.

memories of personal experience vs counts

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Although it is common, prediction by representativeness is not statistically optimal. Michael Lewis’s bestselling Moneyball is a story about the inefficiency of this mode of prediction. Professional baseball scouts traditionally forecast the success of possible players in part by their build and look. The hero of Lewis’s book is Billy Beane, the manager of the Oakland A’s, who made the unpopular decision to overrule his scouts and to select players by the statistics of past performance. The players the A’s picked were inexpensive, because other teams had rejected them for not looking the part. The team soon achieved excellent results at low cost.

evidence-based sports

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Judging probability by representativeness has important virtues: the intuitive impressions that it produces are often—indeed, usually—more accurate than chance guesses would be.

See? We are not so dumb!

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Half the students were told to puff out their cheeks during the task, while the others were told to frown. Frowning, as we have seen, generally increases the vigilance of System 2 and reduces both overconfidence and the reliance on intuition. The students who puffed out their cheeks (an emotionally neutral expression) replicated the original results:

Frown! You will think more logically.

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If you visit a courtroom you will observe that lawyers apply two styles of criticism: to demolish a case they raise doubts about the strongest arguments that favor it; to discredit a witness, they focus on the weakest part of the

testimony. The focus on weaknesses is also normal in political debates. I do not believe it is appropriate in scientific controversies, but I have come to accept as a fact of life that the norms of debate in the social sciences do not prohibit the political style of argument, especially when large issues are at stake—and the prevalence of bias in human judgment is a large issue.

We use debate tools everywhere. In science, too.

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Now, suppose you know a golfer’s score on day 1 and are asked to predict his score on day 2. You expect

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A business commentator who correctly announces that “the business did better this year because it had done poorly last year” is likely to have a short tenure on the air.

Regression toward is mathematical but not intuitve

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is also the case that depressed children who spend some time standing on their head or hug a cat for twenty minutes a day will also show improvement. Most readers of such headlines will automatically infer that the energy drink or the cat hugging caused an improvement, but this conclusion is completely unjustified.

Exceptional performance retreats toward oridinary

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trader-philosopher-statistician Nassim Taleb could also be considered a psychologist. In The Black Swan, Taleb introduced the notion of a narrative fallacy to describe how flawed stories of the past shape our views of the world and our expectations for the future. Narrative fallacies arise inevitably from our continuous attempt to make sense of the world. The explanatory stories that people find compelling are simple; are concrete rather than abstract; assign a larger role to talent, stupidity, and intentions than to luck; and focus on a few striking events that happened rather than on the countless events that failed to happen. Any recent salient event is a candidate to become the kernel of a causal narrative. Taleb suggests that we humans constantly fool ourselves by constructing flimsy accounts of the past and believing they are true.

Our comforting conviction that the world makes sense rests on a secure foundation: our almost unlimited ability to ignore our ignorance.

good at ignoring ignorance

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The core of the illusion is that we believe we understand the past, which implies that the future also should be knowable, but in fact we understand the past less than we believe we do.

what happened?

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Once you adopt a new view of the world (or of any part of it), you immediately lose much of your ability to recall what you used to believe before your mind changed.

what did I used to think ?

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Asked to reconstruct their former beliefs, people retrieve their current ones instead—an instance of substitution —and many cannot believe that they ever felt differently.

I never said that, I never belived that

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This outcome bias makes it almost impossible to evaluate a decision properly—in terms of the beliefs that were reasonable when the decision was made.

outcome bias

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A few lucky gambles can crown a reckless leader with a halo of prescience and boldness.

some luck needed

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Considering how little we know, the confidence we have in our beliefs is preposterous—and it is also essential.

let us believe together

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We were willing to make that admission because, despite our definite impressions about individual candidates, we knew with certainty that our forecasts were largely useless.

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Confidence is a feeling, which reflects the coherence of the information and the cognitive ease of processing

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men acted on their useless ideas significantly more often than women, and that as a result women achieved better investment results than men.

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We know that people can maintain an unshakable faith in any proposition, however absurd, when they are sustained by a community of like-minded believers.

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Several studies have shown that human decision makers are inferior to a prediction formula even when they are given the score suggested by the formula!

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When asked to evaluate the same information twice, they frequently give different answers.

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Experienced radiologists who evaluate chest X-rays as “normal” or “abnormal” contradict themselves 20% of the time when they see

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the same picture on separate occasions.

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A review of 41 separate studies of the reliability of judgments made by auditors, pathologists, psychologists, organizational managers, and other professionals suggests that this level of inconsistency is typical, even when a case is reevaluated within a few minutes.

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The important conclusion from this research is that an algorithm that is constructed on the back of an envelope is often good enough to compete with an optimally weighted formula, and certainly good enough to outdo expert judgment.

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The statistical method, Meehl wrote, was criticized by experienced clinicians as “mechanical, atomistic, additive, cut and dried, artificial, unreal, arbitrary, incomplete, dead, pedantic, fractionated, trivial, forced, static, superficial, rigid, sterile, academic, pseudoscientific and blind.”

The clinical method, on the other hand, was lauded by its proponents as “dynamic, global, meaningful, holistic, subtle, sympathetic, configural, patterned, organized, rich, deep, genuine, sensitive, sophisticated, real, living, concrete, natural, true to life, and understanding.”

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Their rational argument is compelling, but it runs against a stubborn psychological reality: for most people, the cause of a mistake matters. The story of a child dying because an algorithm made a mistake is more poignant than the story of the same tragedy occurring as a result of human error,

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The public is now well aware that formulas may do better than humans in some critical decisions in the world of sports:

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use this procedure than if you do what people normally do in such situations, which is to go into the interview unprepared and to make choices by an overall intuitive judgment such as “I looked into his eyes and liked what I saw.”

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but I have never found the hostile exchanges instructive.

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“Conditions for Intuitive Expertise: A Failure to Disagree.”

intuition v. algorithm

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People voted for someone who looked strong and decisive without any other reason to believe that he was.

would that ever happen ?

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The initial enthusiasm for the idea in the Ministry of Education had waned by the time the text was delivered and it was never used.

easy ones came first

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the likelihood that something will go wrong in a big project is high.

can't foresee all the pitfalls

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It is noteworthy, however, that we did not feel we needed information about other teams to make our guesses.

are we bettter than most?

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In July 1997, the proposed new Scottish Parliament building in Edinburgh was estimated to cost up to £40 million. By June 1999, the budget for the building was £109 million. In April 2000, legislators imposed a £195 million “cap on costs.” By November 2001, they demanded an estimate of “final cost,” which was set at £241 million. That estimated final cost rose twice in 2002, ending the year at £294.6 million. It rose three times more in 2003, reaching £375.8 million by June. The building was finally completed in 2004 at an ultimate cost of roughly £431 million.

ten times as much

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Contractors of kitchen renovations and of weapon systems readily admit (though not to their clients) that they routinely make most of their profit on additions to the original plan.

what if ...