This episode explores various cognitive biases and heuristics that influence human judgment and decision-making, drawing a distinction between intuitive System 1 thinking and effortful System 2 reasoning. It highlights the Law of Small Numbers, demonstrating how people often misinterpret statistical patterns, particularly in small samples, by seeking causal explanations for purely random events. The text also details the pervasive anchoring effect, where initial values, even arbitrary ones, disproportionately sway subsequent estimations. Furthermore, it examines the availability heuristic, illustrating how the ease of recalling information leads to skewed perceptions of frequency and risk, sometimes culminating in availability cascades that distort public policy. Finally, the discussion covers representativeness, where judgments are based on how well something matches a stereotype rather than actual probabilities, and the often-misunderstood phenomenon of regression to the mean, revealing how extreme performances or outcomes are likely to be followed by more average ones, frequently leading to incorrect causal inferences