Thinking, Fast and Slow

Thoughtful, applicable, insightful, entertaining. I enjoyed dissecting the numerous thought experiments and studies for merit that I could apply to my everyday thinking. System 1 and System 2 form the backbone of this book. System 1 is impulsive, and provides heuristic and intuitive guesses and reactions to stimuli without prompting. It can't be turned off. Why You See Is All There Is (WYSIATI). But it's also responsible for remarkably well-tuned intuitions, fast information-processing, "muscle memory," pattern-matching, intensity matching, face & situation recognition, and much of what makes human minds human. Author Daniel Kahneman points out situations in which System 1 is scientifically poor, including statistics (like the difference between 0.01% and 0.001%), random events, weighting time & duration in retrospect. System 2 is more calculated, requires devoted effort and concentration in rationalizing & making decisions. It assigns value to past events, keeps score, questions bias, and carries out more intensive, deliberate calculations involving more data. It's like fetching data from main memory, rather than relying on the cache. Kahneman's prose is rich with examples and experimental case studies, from visceral phenomena like pleasure vs. pain tolerance, and the tendency to derive general from specific, rather than the specific from the general (statistic).... to logic fallacies like optimism in planning, misjudging statistics, underestimating sampling, and sunk costs. He gives simple, easy-to-remember names to a lot of the phenomena he observed in studies, like the peak-end rule that describes how humans tend to judge pain or pleasure of a past event based on an average of how it ended and the peak of the experience, neglecting duration. He also provides solutions and checks & balances that can help us reduce bias, where possible. For example, to mitigate the planning fallacy, he writes: 1.) Identify an appropriate reference class. 2.) Obtain the statistics of the reference class. Use the statistics to generate a baseline prediction. 3.) Use specific information about the case to adjust the baseline prediction, if there are particular reasons to expect the optimistic bias to be more of less pronounced in this project than in others of the same type. The author's life experiences, from serving as an evaluator in the Israeli defense forces to publishing papers as a professor, inform many of the studies and give them a human element and interest to which I could easily relate. I also appreciate his emotion, adding exclamation points to the observations that surprised him, or proved him wrong. He writes in an unassuming, humble, curious way that made each anecdote or cited study a joy to read. Finally, I thought he -- and his editors -- divided the book brilliantly. Chapters are short, usually 8~16 pages, and they always concentrate on some nugget or fallacy that could be later referenced by a single term, like "anchoring," "regression to the mean," "the fourfold pattern," or "the halo effect." He builds up knowledge brick by brick, experiment by experiment, that after a few nights of reading, you begin to recognize fallacies and patterns in everyday life by the terms Kahneman has assigned to them. My favorite part of each chapter is the end: a short section of quotations that describe and use key terms from the chapter, in an everyday, relatable way. There are too many topics and quotes to list them all. Some of my favorites: "The best we can do is a compromise: learn to recognize situations in which mistakes are likely and try harder to avoid significant mistakes when the stakes are high. The premise of this book is that it is easier to recognize other people's mistakes than our own." "Self-control requires attention and effort." "His System 1 constructed a story, and his System 2 believed it. It happens to all of us." "They didn't want more information that might spoil their story. WYSIATI." "We often compute much more than we want or need. I call this excess computation the mental shotgun. It is impossible to aim at a single point with a shotgun because it shoots pellets that scatter, and it seems almost equally difficult for System 1 not to do more than System 2 charges it to do." "Money-primed people become more independent than they would be without the associative trigger." "He was asked whether he thought the company was financially sound, but he couldn't forget that he likes their product." "Our aim in the negotiation is to get them anchored on this number." "Let's make it clear that if that is their proposal, the negotiations are over. We do not want to start there." "When the evidence is weak, one should stick with the base rates." "They added a cheap gift to the expensive product, and made the whole deal less attractive. Less is more in this case." "System 1 can deal with stories in which the elements are causally linked, but it is weak in statistical reasoning." "The experiment shows that individuals feel relieved of responsibility when they know that others have heard the same request for help." "We can't assume that they will really learn anything from mere statistics. Let's show them one or two representative individual cases to influence their System 1." "But those with the most knowledge are often less reliable. The reason is that the person who acquires more knowledge develops an enhanced illusion of her skill and becomes unrealistically overconfident." "The question is not whether these experts are well trained. It is whether their world is predictable." "The research suggests a surprising conclusion: to maximize predictive accuracy, final decisions should be left to formulas, especially in low-validity environments." "In this view, people often (but not always) take on risky projects because they are overly optimistic about the odds they face." "A well-run organization will reward planners for precise execution and penalize them for failing to anticipate difficulties, and for failing to allow for difficulties that they could not have anticipated --the unknown unknowns." "She is the victim of a planning fallacy. She's assuming a best-case scenario, but there are too many different ways for the plan to fail, and she cannot foresee them all." "He weighs losses about twice as much as gains, which is normal." "Think like a trader! You win a few, you lose a few." "Decision makers tend to prefer the sure thing over the gamble (they are risk averse) when the outcomes are good. They tend to reject the sure thing and accept the gamble (they are risk seeking) when both outcomes are negative." "We are hanging on to that stock just to avoid closing our mental account at a loss. It's the disposition effect." "The salesperson showed me the most expensive car seat and said it was the safest, and I could not bring myself to buy the cheaper model. It felt like a taboo tradeoff." "Did he really have an opportunity to learn? How quick and how clear was the feedback he received on his judgments?" "We want pain to be brief and pleasure to last. But our memory, a function of System 1, has evolved to represent the most intense moment of an episode of pain or pleasure (the peak) and the feelings when the episode was at its end. A memory that neglects duration will not serve our preference for long pleasure and short pains." There are many, many more. Read the book for yourself and enjoy the wisdom!

There are an increasing number of books that provide insight into how our minds work. Emotional Intelligence by Daniel Coleman and The Wisdom of Crowds by James Surowiecki are two good examples. Daniel Kahneman, in Thinking Fast and Slow, picks up that theme and advances it by an order of magnitude. In my view, this is the must read book of the year, and absolutely required read for anyone over fifty. Each of us know that there are parts of our brain that toil away ceaselessly regulating breathing and blood pressure, managing digestion and keeping our heart beating on schedule without us being consciously aware of it. From other books like Emotional Intelligence, we know that there is also a high-speed circuit that responds to stimulus far faster than conscious thinking. There are numerous examples. Touch something hot with your hand and you'll move it before you actually feel the pain. See someone you know in a busy airport or train station? Not only will you recognize them instantly, you'll know if they are sad or angry - our brains are hard-wired with high-speed circuits for facial recognition. Mr. Kahneman, through a series of examples, tests, incorporation of original research and reports of research from others, informs us that our autonomous brain does far more, including a lot of things that we should be doing with our conscious thoughtful brain, but we don't. He uses the term System 1 for the autonomous function and System 2 for our thoughtful, conscious brain. System 1 is fast, intuitive and emotional. System 2 is slower, more deliberative and more logical. Read the book and you'll know that System 1 is doing a lot of stuff. Most is either critical and performed well, or performed poorly but unimportant, but a certain part is done because of laziness or a concentration failure on our part, and would be much better managed by System 2. The first few chapters are reasonably easy read and full of interesting little quizzes. You'll probably answer some of those quizzes wrong, and it will be because you let rapid-fire System 1 come up with the answer instead of deliberating with System 2. One of these tests (I won't give it away) was given to a class at Princeton, conceivably some of the best and brightest in the country, and a majority of them failed, so don't feel too bad if you fail it also. However, I must warn you that the content gets harder. I'm reasonably literate in at least basic statistics, and I found myself challenged a number of times. On more than one occasion, I didn't understand the answer even when Kahneman gave it to me. After proving to us that we let System 1 interfere when it shouldn't, Kahneman provides chapters on our various thinking and logic errors and guidance on what to be on guard for to make sure we put System 2 in charge, and we prevent the vast number of thinking shortcuts that lead to suboptimal decisions. There are chapters on how a tired and overloaded brain makes bad decisions. How we tend to be poor assessors of risk, overly concerned about low probability events and not sufficiently concerned about riskier activities. This extends into how humans make investment decisions. I found the chapter on "Anchoring", that is, how we attach value to a reference number, even if we shouldn't, particularly useful, and very valuable when approaching a negotiation. There is thoughtful, research-based advice on when to rely on an "expert" and when not. Why do I say that this is a must read for anyone over fifty? Let's face it. Once we've crossed that line - maybe fifty for some of us, sixty or even seventy for others, we simply don't think as fast. Do you watch the famous game show Jeopardy? Generally I can hold my own with many contestants. I know a lot of the answers. However, I also know that I can no longer come up with those answers fast enough. The contestants buzz in way too fast for me. There is research on the ability of us in our second fifty years to make wise investments. It turns out that not too many of us are Warren Buffet. We need to be cautious and thoughtful when putting our money to work. This book provides very valuable insight into our unconsciously lazy mental habits and equally unconscious thinking errors. It is a must-read.

I did not consider this book for its contentious ideas regarding human thought, but rather as an interesting framework regarding thought processes and a different perspective on the way we process information. I find Daniel Kahneman's "Thinking Fast and Slow" is a fantastic read as an expansion of his earlier work with Amos Tversky on the human decision-making pathways of heuristics and algorithms which the book are presented as the two "main characters" as he likes to call them: System 1 (the fast) and System 2 (the slow). Overall, I enjoyed Kahneman's engaging use of examples and simple "mini-experiments" which allowed me to try and witness the results firsthand. The addition of light humor in his simple, yet robust writing style keeps the didactic tone at the forefront of the text while still keeping the admittedly long book interesting enough to keep the pages turning. Many of the points that the author brings up throughout the book are usually preceded or supported by some sort of "do-it-yourself" type exercises. One of my favorite examples is the "add-1" and "add-3" exercises where you make strings of 4 digit numbers. You read a number, wait 2 seconds, then say a new number with each of the digits incremented by either 1 or 3. For example, the number 1234 in the add-1 exercise would become 2345 and in the add-3 scenario, it would become 4567. These exercises are used to indicate just how what the extent of working memory is in most people and the physiological strain that effortful processing can have on both the body and the mind. One of the most interesting devices I found in the book was the dichotomy Kahneman creates from the moment I turned to the first page. He tells the reader to treat the book as two major characters. The first character is the unsung "hero" of the story of our mind: System 1. It is always on and gets its hand first on anything and everything our mind comes into contact with. The main principles or System 1 is that it is quick, more "emotional", and more susceptible to biases and errors. It operates efficiently, with little effort, and is constantly operating in the background. In other words, System 1 operates in what Kahneman and Tversky call "heuristics." On the other hand, Kahneman brings in a supporting character that believes it is the main character: System 2. System 2 is more deliberate and conscious, and is what we identify with when we refer to ourselves. However, it requires much more conscious effort and thus is only used when System 1 cannot come to some sort of solution, answer, or analysis with the information at hand. Thus, System 2 operates via algorithms and is less prone to emotional and cognitive errors, though not entirely immune. This underlying dichotomy thematically arises in our everyday lives and in a multitude of different cognitive tasks. Kahneman touches on topics including psychology, neuroscience, and his Nobel Prize winning specialty: economics. Personally, as a debater, I have a special interest in economic theory as arguments involving economic considerations are a common occurrence in rounds. This is probably why Kahneman's discussion of these systems contextualized in an economic scenario particularly caught my eye. In the aforementioned circumstance, he brings up the psychological notion of prospect theory, which earned him his Nobel Prize in the field of (behavioral) economics. To begin with the, prospect theory accounts for the error in the expected utility hypothesis which states that people make decisions, such as gambling, based on the expected payout. However, using Kahneman's terminology, this would be more of System 2 centric approach. In experimentation, he reveals that decision making involving risk factors is more heuristical in nature and is therefore governed predominantly by System 1 wiring. Prospect Theory suggests that decision making is based off the potential total loss or the potential total gain instead of the expected outcome (based of the equation x = Σxnpn). This also indicates that people tend to be more "risk-aversive" by nature. In other words, humans tend to fear loss more than they hope for gain. Additionally, a loss of a certain magnitude will yield in more negative emotions than a gain of equal amount would elicit positive emotions. While the economic and behavioral applications of decision making is interesting to me, other readers might find some of the other ideas in the wide variety of topics that Kahneman delves into more engaging or meaningful. There are five overarching parts that he outlines in his book. In the first part of the book, Kahneman focuses on setting up the dichotomy of the two systems and the experimental basis for their existence. In part two, he indicates the impact of system 1 in heuristical analysis. Specifically, he discusses the cognitive biases that come from the quick pathway of thinking. This section is particularly important in making the point that there lies some counterbalance between the speed of processing and the accuracy that lies therein. Part three discusses the implications that people are overconfident in their decision-making. Though decisions based off of gut instincts may "feel" right, they may be proven to be considered mathematically irrational. There is also the underlying notion that compared to careful statistical analysis, we are more often wrong in our perceptions than we are truly accurate. The penultimate part refers to the role of decision-making criterion in the choices that people make. Risk analysis is the largest factor in understanding how and why people consistently choose certain courses of actions over others. The main takeaway is the belief that people are inherently risk aversive. This is beneficial both evolutionarily, but also in the sense that is logistically makes sense in most scenarios to err towards a false negative (Type II statistical error) than it is to a false positive (Type 1 statistical error). Finally, Kahneman comes full circle to holistically comparing the two systems and how they interact with each other in order to assist us in solving the problems that come to us day to day. In the end, I feel that this book has given me great insight into not only how we think, but also why we think that way. I feel more aware of cognitive biases as well as potential errors in my judgment and reasoning that I know I not only have made in the past, but will probably involuntarily continue to do so in the future. Overall, I believe there is much to take away from this book both on a conceptual and a lifestyle level. It is important to realize that one of the biggest ways to develop as a person is to understand our respective selves and this book, to a large extent, has helped me further that understanding.

This is an invaluable book that every person who considers him/herself educated should read - even study. Indeed, it is a scandal that mastering the material in this book isn't considered an essential component of a high school education. The author was awarded the Nobel in Economics for his work on what he calls decision theory, or the study of the actual workings of the typical human mind in the evaluation of choices, and the book itself presents the findings of many decades of psychological studies that expose the endemic fallacious thinking that we are all prone to, more or less. The lives of all of us could be improved by lessons learned from this book, not just individually, through self-education, but also on the large scale, if the large scale decision makers in this society in and out of government could be educated as well. In fact, it is largely because these large scale decision makers are no better than the rest of us in their ability to think straight and plan well, that society is as screwed up as it is, and that essentially all of its institutions are diseased and corrupt. The lesson there, however, is that decision making needs to be returned to the individual - that the powers that be need to be deprived of their powers to mess up the lives of the rest of us. Despite the many virtues of this book - it is well-written, engaging, and its academic author reasonably restrained in the tendencies of his tribe to blathering in abstractions - it is a bit disappointing at the very end, when the author proves unable to synthesize all his material into a comprehensive theory of the thinking, and deciding mind - or at least into a set of carefully formulated principles that provide a succinct summary of the principles of human thinking, both typical and ideal. Kahneman uses throughout a construct that implies that we are of two minds: System 1 is the fast-thinking, intuitive, mind, prone to jumping to conclusions; while System 2 is the slow-thinking analytical mind, that is brought into play, if at all, only to critique and validate the conclusions that we have jumped to. System 2, we are told, is lazy, and if often just rubber-stamps the snap judgements of System 1, or if pressed, rationalize them, instead of digging critically as well as constructively into the complex underpinnings of the material and sorting them out as best it can. Instead of working this construct up into a comprehensive model of mind, K merely uses it as a loose schema for representing the kinds of thinking thought to underlie the results derived from the many psychological experiments that he here reports on. This neglect raises the question at many points as to just how well the experimenters have really understood the thinking that underlies the behavior of their subjects. But this, I am sorry to say, is a weakness of virtually all psychological experimentation, which is still just beginning to come to grips with the complexity and varieties of cognitive style of the human mind. What Kahneman does do, however, is to provide convenient labels for many characteristic types of fallacious thinking, although again, the exact role of System 1 and System 2, and their interaction, is inadequately explicated. Instead, towards the end of the book, another, somehow related, but nominally independent theme is developed: the disturbing divergence between the experiencing self and the remembering self. This is in itself such an interesting and important idea, so pregnant with both psychological and philosophical implications, that it could have used a fuller treatment, and again, there is no coherent integration of this theme with the System1/System2 construct. The idea here is that our present experience includes our most salient memories of previous experiences - for example the highlights of past vacations, or out of the ordinary episodes of our lives. Somewhat surprisingly, though, what we remember is a systematic distortion of the actual experience. Our memory collapse the duration of various aspects of our experience and highlights only the peak moment(s) and the final moments, perhaps with a nod toward the initial presentation of the experience. And this systematic distortion of the actual experience in all its fullness, can lead us to make irrational and detrimental choices in deciding whether to repeat the experience in the future. Thus, a bad ending to an otherwise wonderful experience can spoil the whole thing for us in memory, and cause us to avoid similar experiences in the future, even though by simply anticipating and improving the ending we might make the whole experience as wonderful as most of the original was. Likewise, subjects in experiments involving either long durations of pain, or much shorter episodes of pain with a higher peak, were consistently more averse to the latter rather than the former - or they overemphasized the way these presentations ended as a factor in judging them as a whole. These are important findings that go the heart of the question of how best to steer our course through life, but here is the only attempt at integration of this remembering vs experiencing self theme, and the System 1/ System 2 theme that I find in the final chapter, Conclusions: "The remembering self is a construction of System 2. However, the distinctive features of the way it evaluates episodes and lives are characteristics of our memory. Duration neglect and the peak-end rule originate in System 1 and do not necessarily conform to the values of System 2". There is more here, but it merely repeats the earlier analysis of the relevant experiments. No evidence is presented as to the respective roles of System 1 and System 2 with respect to the laying down of memory, to its decay, or with respect to a recently discovered phenomenon: memory reconsolidation. Nor is any account taken of what has been learned, much of it in recent decades, about the interactions between short, intermediate, and long term memory, or any of the radically different modalities of episodic (picture strip) and semantic (organized, abstracted) memory. Consequently, Kahneman's vague reference to the "characteristics of our memory" is essentially a ducking of the question of what the remembering self is. I think that at best, the finding of the replacement of the original experience by an abstract predicated on peak-end bias is an exaggeration, though there's no question that "duration neglect" is in operation, and a good thing too, unless K means by "duration neglect" not just the stretches of minimally changing experience (which have little memorial significance anyway, but even the consciousness of how long the edited out parts were (this distinction was never made in Chapter 35, where the theme of the remembering vs. the experiencing self is first taken up). Speaking for myself anyway, I have a much fuller memory of my most important experiences than Kahneman seems to indicate. Naturally the highlights are featured, but what I tend to remember are representative moments that I took conscious note of at the time, as though making a psychological photograph. I remember these moments also because I bring them up from time to time when I'm thinking about that experience. For example, I'm thinking now of a long distance race I did in 2014 (a very tough half-marathon, with almost 2000' of climbing). I remember: the beginning section as well as the ending section; each of the rest stations; certain moments of each of the major hill climbs; at least one moment from each of the descents; and a number of other happenings during the almost three hour event. For me in this race, the peak experience occurred right at the end, when I all but collapsed, yet managed to stagger to the finish line. That ending does naturally come first to mind as a representation of the entire event, but it is merely the culmination of a long and memorable experience with many moving parts, and if I want, my remembering self can still conjure up many other moments, as well as a clear sense of the duration of each of the sections of the course. Over many years most memories fade, and it's certainly reasonable to suppose that in extreme cases, where they are all but forgotten, only a single representative moment might be retained. However, if we can say anything for sure about memory it is this: we remember what we continue to think of and to use, and we do that precisely because this material has continuing importance to us. The recent research in memory reconsolidation tells us that when we do bring up memories only occasionally, we reinforce them, but we also edit and modify them to reflect our current perspectives, and sometimes we conflate them with other seemingly related knowledge that we've accrued. We are thus prone to distort our own original memories over time, in some cases significantly, but we may still retain much more of the original experience that just the peak and the end, and if we do reinterpret our memories in the light of more recent experience, that's not necessarily a bad thing. In any case, the memories that occur in the present may be said to be a joint project of the experiencing as well as the remembering self, which rather erodes the whole Two Selves concept that Kahneman first posited. I do not mean to criticize the valuable evidential material in the book, and in general I think that Kahneman, and the other researchers and thinkers whom he quotes, have drawn reasonable conclusions from the experiments they report on. But ultimately, the book, as well as the fields both of psychology and brain neurophysiology suffer both in coherence and meaningfulness because they aren't predicated on a more comprehensive theory of mind. It's the old story in science, first formulated by Karl Popper in his 1935 book, The Logic of Scientific Discovery: unless we approach the data with an hypothesis in mind - unless, indeed, we seek out data likely to be relevant to a particular hypothesis, we're not going to make any enduring progress in understanding that data in a comprehensively meaningful way, let alone be able to make falsifiable deductions about elements of the system for which we have at present no data. Popper's quotation from the German philosopher Novalis comes to mind - "Theories are nets: only he who casts will catch." In the final, "Conclusions", chapter, K caricatures the abstract economists' model of homo econimicus (man as a rational optimizer of his utility), contrasting it with the more sophisticated and experientially grounded model of psychologists such as himself. In keeping with his penchant for framing (or spinning) his presentation favorably to his own perspective, he calls the economists' model "Econ", and his own "Human". In fact, "Econ" was never meant to represent man in all his humanity, and Kahneman's Economics Nobel, recognizing his decision theory contributions to economics, was preceded by many other Nobels to economists who had been expanding the concept of the economic actor into psychological territory for decades. In fact, the essential view of the Austrian economists dating from the 1920s (von Mises, Hayek, and their predecessors) is that economics is in the end wholly dependent on psychology because it is predicated on the unknowable, unquantifiable subjective value preferences of humans, acting individually and in concert. Cautious generalizations can perhaps be made about human psychology in general, but I think that on the whole the Austrians have been a bit wiser in their restraint than Kahneman and his many, and mostly lesser, pop psychology compatriots have proved in their often sensationalist extrapolations from lab experiments. Here is an example, I think of Kahneman over-reaching. He speaks repeatedly of the laziness of System 2, and its foot dragging reluctance to get involved in the thinking process, but in the real world, snap judgements are good enough for immediate purposes, and the better part of rationality may be to go with one's fast thinking intuitive System 1: indeed, Kahneman acknowledges this himself in passing, both in his beginning and his ending, but this isn't enough to counterbalance the overall argument of his book. Kahneman also, in his final chapter, speculatively extends his findings into the political sphere (his liberal Democratic Party bias has already been made clear by gratuitous and somewhat annoying usage of salient modern politicians in examples), but not to any great effect. Kahneman advocates "libertarian paternalism" consisting of government programs that people are enrolled in automatically unless they opt out by checking a box on forms - thus manipulating the presentation frame so as to trick them into signing on to what some government bureaucrat thinks is good for them. Of course, as long as people are allowed to opt out, one can't call the choice here anything but libertarian, though to be consistent with their socialist mores, liberals like Kahneman really ought to object to such practices as being manipulative advertising. This libertarian finds nothing objectionable about the way such a choice might be presented - after all, the average man, if adequately educated and prepared for the real world, should have no trouble seeing through the frames. What is not only paternalistic, but totalitarian in spirit, is the extortion of taxpayer money to finance such government programs in the first place. Somehow, it fails to occur to Kahneman that most people could be trained to recognize and avoid fallacious thinking during all those years of enforced and mostly wasteful schooling - just as most people can be trained to recognize the Müller-Lyer illusion for what it is. IMO every high school graduate should be required to learn to recognize and avoid the paradigm cases of fallacious thinking presented in Thinking, Fast, and Slow, and this material could profitably be expanded to cover the many rhetorical tricks used by the manipulators and spinmeisters, both public and private, who batten off of our society. With such training in critical thinking, and with the reintroduction of enough honest and rigor to begin high school graduates up to the 12th grade reading and writing proficiencies that were routine in the 1950s, the need for college as life preparation would be altogether obviated, and most young people could avoid wasting their early years in college, piling up debt, and get on with their work and/or their self-education, as they chose.

Back in 1994, Massimo Piattelli-Palmarini, Director of the Institute of San Raffaele in Milan, Italy, wrote a charming little book about common cognitive distortions called Inevitable Illusions. It is probably the very first comprehensive summary of behavioral economics intended for general audience. In it, he predicted that the two psychologists behind behavioral economics - Amos Tversky and Daniel Kahneman - would win the Nobel prize. I didn't disagree with the sentiment, but wondered how in the world were they going to get it since these two were psychologists and there is no Nobel prize in psychology. I didn't think there was much chance of them winning the Nobel Prize in economics. I was wrong and Piattelli-Palmarini was right. Kahneman won the Nobel prize in Economic Sciences. (Tversky unfortunately prematurely passed away by this time.) Just as Steve Jobs who was not in the music industry revolutionized it, the non-economists Kahneman and Tversky have revolutionized economic thinking. I have known Kahneman's work for quite some time and was quite excited to see that he was coming out with a non-technical version of his research. My expectations for the book were high and I wasn't disappointed. Since other reviewers have given an excellent summary of the book, I will be brief in my summary but review the book more broadly. The basis thesis of the book is simple. In judging the world around us, we use two mental systems: Fast and Slow. The Fast system (System 1) is mostly unconscious and makes snap judgments based on our past experiences and emotions. When we use this system we are as likely to be wrong as right. The Slow system (System 2) is rational, conscious and slow. They work together to provide us a view of the world around us. So what's the problem? They are incompatible, that's what. System 1 is fast, but easily swayed by emotions and can be as easily be wrong as be right. You buy more cans of soup when the display says "Limit 12 per customer". We are on autopilot with this system. System 1 controls an amazing array of behavior. System 2 is conscious, rational and careful but painfully slow. It's distracted and hard to engage. These two systems together provide a backdrop for our cognitive biases and achievements. This very well written book will enlighten and entertain the reader, especially if the reader is not exposed to the full range of research relating to behavioral economics. This book serves an antidote to Malcolm Gladwell's Blink. Although Gladwell never says that snap judgments are infallible and cannot badly mislead us, many readers got a different message. As the Royal Statistical Society's Significance magazine put it "Although Gladwell's chronicle of cognition shows how quick thinking can lead us both astray and aright, for many readers Blink has become a hymn to the hunch." While Kahneman does show how "fast thinking" can lead to sound judgments, he also notes how they can lead us astray. This point is made much more clearly and deliberately in Kahneman's book All my admiration for the brilliance and creativity of Kahneman (and Tversky) does not mean that I accept 100% of their thesis. Consider this oft-quoted study. Linda is 31 years old, single, outspoken, and very bright. As a student, she was deeply concerned with the issues of discrimination and social justice, and she also participated in anti-nuclear demonstrations. Which is more probable? 1. Linda is a bank teller. 2. Linda is a bank teller and is active in the feminist movement. Eighty-five percent of test subjects chose the second option, that Linda was a bank teller and active in the feminist movement. Kahneman's interpretation is that this opinion is wrong because the probability of a (random) woman being a bank teller is greater that than person's being a bank teller AND a feminist. What Kahneman overlooks here is that what most people answered may not be the question that was asked. The respondents may not have been concerned with mathematical probabilities, but rather could be responding to the question in reverse: Is it more likely for a current activist to have been an activist in the past compared to others in the profession? A more formal and theoretically better argued rebuttal of some of Kahneman's hypotheses can be found in the works of Gerd Gigerenzer. Kahneman notes that even top performers in business and sports tend to revert to the mean in the long run. As a result, he attributes success largely to luck. I'm not so convinced of this. There can be alternative explanations. People who achieve high degree of success are also exposed to a high degree of failure and the reversion to the mean may be attributable to this possible mirror effect. Spectacular success may go with spectacular failure and run-of-the-mill success may go with run-of-the-mill failure. Eventually everyone may revert the mean, but the ride can be very different. Chance may not account for that. Another concern is that much of the work is done in artificial settings (read college students). While much of what we learnt can perhaps be extended to the real world, it is doubtful every generalization will work in practice. Some may find Kahneman's endorsement of "libertarian paternelism," not acceptable. More importantly, when applied to the real world it did not always found to work. In spite to these comments this book is written carefully in a rather humble tone. I also appreciated Kahneman's generous and unreserved acknowledgement of Tversky's contributions and his conviction that, had he been alive, Tversky would have been the co-recipient of the Nobel Prize. My cautionary comments probably have more to do with the distortions that might arise by those who uncritically generalize the findings to contexts for which they may not applicable. As mentioned earlier, the wide misinterpretation of Gladwell's Blink comes to mind. Nevertheless, Thinking Fast and Slow is a very valuable book by one of the most creative minds in psychology. Highly recommended. For a more complete and critical understanding, I also recommend the writings of the critics of behavioral economic models such as Gerd Gigerenzer. PS. After I published this review, I noticed an odd coincidence between Thinking Fast and Slow and Inevitable Illusions that I mentioned in my opening paragraph. Both books have white covers, with an image of a sharpened yellow pencil with an eraser top. How odd is that?

Very interesting concepts and results - very informative. However, I think that some conclusions are not totally conclusive. One example is the "Linda" experiment in Chapter 15, wherein a fictional person named Linda is described as she was as a student, then the subject is given a list of possibilities for Linda's current situation and is asked to rank them in order of probability. Two of the choices are "bank teller" and "bank teller who is a feminist". Clearly the second is in a subset that is a member of the set in which the first is found, so naturally someone who takes this list on its face will recognize that the first is more likely than the second just by definition. However, a large majority of participants choose the second selector as the most likely from a probability point of view. The experimenters conclude that this is an example of "representation" and ignoring basic principles of probability, or confusing probability with plausibility or coherence. It's true that the result illustrates a fault in the logic of most participants, but there can be other explanations for why this fault occurs. In this example, it occurs to me, as one who answered wrongly and then thought about why I did so, that specifying two categories that are so similar could cause one to imply something about the less specific category that is not actually true. "Bank teller" in light of "bank teller who is a feminist" might automatically be seen by many participants as "bank teller who is not a feminist", without the participants even realizing she has made this change in the selector. That's what I think I did, and, though an error, is not one of representation. A very different mechanic was in place for me here. I would guess that this also applied to many other participants. In other words, the selectors are presented as if they are on the same level - no hierarchy. Is she a school teacher, or a bookstore clerk, or an insurance salesperson, or a bank teller, or a bank teller who is a feminist? I think System 1 sees that most of these are either/or choices, but two seem to be this and also possibly that, which is hierarchical so doesn't really fit in with the rest of the list. System 1 might think of modifying the "bank teller" selector to "bank teller that is not a feminist", thus making the selector list much more uniform (and while it's making these changes, why not change "is active in the feminist movement" into "is active in the feminist movement and is not a bank teller"). And since this is automatic and System 1 never explains itself, most people will never be able to explain why they made such a seemingly obvious mistake. Maybe...if so, then this possible explanation also applies to all the subsequent refinements of the Linda experiment, in my uneducated and unqualified view. To go further, another experiment is presented in which there is a die that has 4 green faces and 2 red faces, and the participant is given a list of three outcomes, all of which are unlikely, because they have more reds that greens, and the participant is supposed to choose which one she would select to win $25. Here are the choices: 1. RGRRR 2. GRGRRR 3. GRRRRR The word "probability" is left out completely, as are any verbalized descriptions, to control for the possibility that participants are misunderstanding what is meant by probability. Even with this attempt at control, the result is that the participants choose 2 more often that 1 or 3, even though clearly if one chooses 1 they will win the $25 if the result is RGRRR or GRGRRR (because the latter contains the former). Right. But what if System 1 sees that two of the three selectors has 6 results, and only one has 5, so rules in its automated way that 1 is invalid? The rules seem to imply that there are six rolls of the die, and if we bet on 1, we will lose (the probability that I will get only 5 results from 6 rolls of the die is exactly zero percent! - well, maybe more than 0% if there's a perfectly timed earthquake or other cataclysm) - an unspoken rule is detected such that the bet is on the full 6 rolls. Given that the only two valid selectors are 2 and 3, then 2 is the most probably choice. Maybe...but this, of course, depends on the eventuality of System 1 to also ignore the detail that there would be 20 die rolls - and we've already learned that System 1 is wont to do this for the sake of expediency. In both cases above, System 1 might have chosen to modify the scenario - in other words, System 1 might have substituted the original question with one that is easier to answer, which is a heuristic technique of System 1 that is discussed at length earlier in the book. The point is that either way, there has been an error, but the mechanics of that error may not be what they appear to be. That's my thought anyway. I think this also applies to many other cases. Or maybe not... The heart attack and Borg experiments were very good ones as well, but my System 2 is now too depleted of energy to think of alternative conclusions, or maybe just too lazy. :-). These are strong enough that I may just eventually conclude that my second guessing above is merely a narrative fallacy on my part. Anyway, very fascinating book, and very revealing.

Thinking, Fast and Slow contains fascinating and important insights into how we think and make decisions. However, it often reads more like a textbook than a book for the general public. Kahneman could have presented the same ideas more clearly and concisely, without so much repetition and detail. The concepts are brilliant, but the main points often get buried, making the book more exhausting to read than it needed to be.

Thinking, Fast and Slow by Daniel Kahneman “Thinking, Fast and Slow” is a fascinating look at how the mind works. Drawing on knowledge acquired from years of research in cognitive and social psychology, Nobel Prize Winner, Dr. Daniel Kahneman delivers his magnum opus on Behavioral Economics. This excellent book focuses on the three key sets of distinctions: between the automatic System 1 and the effortful System 2, between the conception of agents in classical economics and in behavioral economics, and between the experiencing and the remembering selves. This enlightening 512-page book is composed of thirty-eight chapters and broken out by the following five Parts: Part I. Two Systems, Part II. Heuristics and Biases, Part III. Overconfidence, Part IV. Choices, and Part V. Two Selves. Positives: 1. Award-winning research. A masterpiece of behavioral economics knowledge. Overall accessible. 2. Fascinating topic in the hands of a master. How the mind works. The biases of intuition, judgment, and decision making. 3. Excellent format. Each chapter is well laid out and ends with a Speaking of section that summarizes the content via quotes. 4. A great job of defining and summarizing new terms. "In summary, most of what you (your System 2) think and do originates in your System 1, but System 2 takes over when things get difficult, and it normally has the last word." 5. Supports findings with countless research. Provides many accessible and practical examples that help readers understand the insightful conclusions. 6. A great job of letting us what we know and to what degree. "It is now a well-established proposition that both self-control and cognitive effort are forms of mental work." 7. You are guaranteed to learn something. Countless tidbits of knowledge throughout this insightful book and how it applies to the read world. "The best possible account of the data provides bad news: tired and hungry judges tend to fall back on the easier default position of denying requests for parole. Both fatigue and hunger probably play a role." 8. The differences of Systems 1 and 2 and how they function with one another. "System 1 is impulsive and intuitive; System 2 is capable of reasoning, and it is cautious, but at least for some people it is also lazy." "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." 9. Important recurring concepts like WYSIATI (What You See Is All There IS). "You surely understand in principle that worthless information should not be treated differently from a complete lack of information, but WYSIATI makes it very difficult to apply that principle." 10. Understanding heuristics and biases. "The strong bias toward believing that small samples closely resemble the population from which they are drawn is also part of a larger story: we are prone to exaggerate the consistency and coherence of what we see. The exaggerated faith of researchers in what can be learned from a few observations is closely related to the halo effect, the sense we often get that we know and understand a person about whom we actually know very little. System 1 runs ahead of the facts in constructing a rich image on the basis of scraps of evidence. A machine for jumping to conclusions will act as if it believed in the law of small numbers. More generally, it will produce a representation of reality that makes too much sense." 11. Paradoxical results for your enjoyment. "People are less confident in a choice when they are asked to produce more arguments to support it." 12. Understanding how our brains work, "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." 13. Wisdom. "'Risk' does not exist 'out there,' independent of our minds and culture, waiting to be measured. Human beings have invented the concept of “risk” to help them understand and cope with the dangers and uncertainties of life. Although these dangers are real, there is no such thing as 'real risk' or 'objective risk.'" Bonus. "To be useful, your beliefs should be constrained by the logic of probability." 14. You will learn lessons that are practical. "Rewards for improved performance work better than punishment of mistakes." 15. An interesting look at overconfidence. "Our comforting conviction that the world makes sense rests on a secure foundation: our almost unlimited ability to ignore our ignorance." "Remember this rule: intuition cannot be trusted in the absence of stable regularities in the environment." 16. Have you ever had to plan anything in your life? Meet the planning fallacy. "This may be considered the single most important piece of advice regarding how to increase accuracy in forecasting through improved methods. Using such distributional information from other ventures similar to that being forecasted is called taking an “outside view” and is the cure to the planning fallacy." 17. A very interesting look at Econs and Humans. "Economists adopted expected utility theory in a dual role: as a logic that prescribes how decisions should be made, and as a description of how Econs make choices." 18. Prospect theory explained. "The pain of losing $900 is more than 90% of the pain of losing $1,000. These two insights are the essence of prospect theory." 19. Avoiding poor psychology. "The conclusion is straightforward: the decision weights that people assign to outcomes are not identical to the probabilities of these outcomes, contrary to the expectation principle. Improbable outcomes are overweighted—this is the possibility effect. Outcomes that are almost certain are underweighted relative to actual certainty. The expectation principle, by which values are weighted by their probability, is poor psychology." 20. Great stuff on well being. 21. An excellent Conclusions chapter that ties the book up comprehensively. Negatives: 1. Notes not linked up. 2. No formal separate bibliography. 3. Requires an investment of time. Thankfully, the book is worthy of your time. 4. The book overall is very well-written and accessible but some topics are challenging. 5. Wanted more clarification on how Bayes's rules work. In summary, a masterpiece on behavioral economics. Dr. Kahneman shares his years of research and provides readers with an education on how the mind works. It requires an investment of your time but it so well worth it. A tremendous Kindle value don't hesitate to get this book. I highly recommend it! Further suggestions: "Subliminal" by Leonard Mlodinow, "Incognito" by David Eagleman, "Switch" by Chip and Dan Heath, “Drive: The Surprising Truth about What Motivates Us” by Daniel H. Pink, “Blink” by Malcolm Gladwell, “The Power of Habit” by Charles Duhigg, “Quiet: The Power of Introverts in a World That Can't T Stop Talking” by Susan Cain, "The Social Animal" by David Brooks, "Who's In Charge" Michael S. Gazzaniga, "The Belief Instinct" by Jesse Bering, "50 Popular Beliefs that People Think Are True" by Guy P. Harrison, "The Believing Brain" by Michael Shermer, "Predictably Irrational" by Dan Ariely, "Are You Sure?" by Ginger Campbell, and "Mistakes Were Made But Not By Me" by Carol Tavris.

Hard cover. Very good quality. Finished reading first two chapters. The book essentially talks about how the mind works. This is helpful in identifying our biases and actively countering them. So definitely a read for those who are interested in understanding how does our brain impact our actions.

Thinking, Fast and Slow by Daniel Kahneman is a fascinating book that changed the way I look at everyday decisions. The idea of System 1 — fast and intuitive thinking — and System 2 — slower and more deliberate thinking is explained in a way that makes you notice these patterns in your own life. What I particularly enjoyed is how the book explores judgement, biases, overconfidence, risk and why we sometimes make decisions that seem logical at the time but aren’t necessarily rational. It is not a light, quick read, and some chapters require concentration, but that is also what makes it rewarding. I found myself stopping frequently to think about the examples and relating them to decisions in work and everyday life. Thought-provoking, insightful and a book worth taking your time with.

Même si l'expression est un cliché, disons-le sans hésitation : ce livre est un must. D'abord, songez au prestige que vous vous attirerez en glissant, au hasard d'une conversation, que vous êtes en train de lire un ouvrage signé d'un prix Nobel d'économie ! Mais surtout, cet ouvrage constitue une plongée des plus passionnantes dans les arcanes de l'esprit humain, sous la conduite d'un guide qui, en plus de sa profonde érudition et de son expertise, n'oublie jamais d'être accessible, pratique, voire drôle ! Plus d'une fois, au détour d'une page, vous vous surprendrez à penser : « Bien sûr, c'est cela ! », tant les démonstrations de Daniel Kahneman font écho à notre expérience quotidienne, aux mécanismes psychiques avec lesquels nous nous débattons dans notre for intérieur. Au fil des chapitres, l'auteur passe en revue les merveilles et les nombreux travers de la pensée intuitive, cette « star masquée » qui, sans que nous le réalisions, prend bien souvent le dessus sur notre esprit rationnel : hyper-sensibilité à l'environnement extérieur et à une kyrielle de biais (effet de halo, excès de confiance, etc.), tendance à poser ses conclusions d'emblée et à chercher ensuite les raisons qui les justifient, oubli des principes statistiques les plus élémentaires... Sans être inaccessible, le chapitre sur la théorie des perspectives - le domaine qui a valu à l'auteur son prix Nobel - est plus pointu et s'adresse aux lecteurs soucieux d'entrer dans le détail d'une théorie à la pointe des réflexions actuelles sur la prise de décision. Fort de ses plus de 500 pages, ce livre est un ouvrage de référence, à lire et à méditer en prenant son temps, car un contenu d'une telle richesse ne se digère pas en quelques heures.

⭐️⭐️⭐️⭐️⭐️ (5/5) „Thinking, Fast and Slow“ – Meilenstein der Psychologie und Ökonomie 📌 Kurzfazit Kahneman, Nobelpreisträger für Wirtschaft, fasst in diesem Werk jahrzehntelange Forschung zu kognitiven Verzerrungen, Entscheidungsfindung und Heuristiken zusammen. Er erklärt die Dynamik zwischen zwei Denksystemen – dem schnellen, intuitiven „System 1“ und dem langsamen, analytischen „System 2“. Das Buch ist ein Standardwerk für alle, die verstehen wollen, warum Menschen oft irrational entscheiden. 📚 Inhalt in Kürze System 1: schnell, automatisch, intuitiv System 2: langsam, reflektiert, kontrolliert Heuristiken und Biases: Verfügbarkeitsheuristik, Anker-Effekt, Verlustaversion, Overconfidence Anwendungen: Wirtschaft, Politik, Alltagsentscheidungen Erklärung, warum klassische ökonomische Modelle (Homo oeconomicus) nicht ausreichen 🔬 Wissenschaftliche Relevanz Stärken: Umfassende Darstellung der Arbeit von Kahneman & Tversky – Grundlage der Verhaltensökonomie. Beeinflusst Ökonomie, Psychologie, Politikwissenschaft, Medizin und Management. Viele Erkenntnisse empirisch mehrfach bestätigt. Schwächen: Kritik in den letzten Jahren an der Replizierbarkeit mancher sozialpsychologischer Studien. Sehr dicht und anspruchsvoll geschrieben – kein „leichter“ Ratgeber. 👉 Fazit Wissenschaft: Trotz Kritik an einzelnen Studien bleibt das Buch ein wissenschaftlicher Eckpfeiler, weil es ein Paradigma veränderte. 🌍 Kulturelle Relevanz Weltbestseller, über 10 Mio. verkaufte Exemplare. Hat das Denken über Rationalität, Politik, Wirtschaft und Finanzen verändert. Populär in Management- und Leadership-Literatur, aber auch in Journalismus und Politik zitiert. Hat Begriffe wie „System 1 & 2“ in den kulturellen Mainstream gebracht. 💭 Meine persönliche Meinung Positiv: Tiefgründig, brillant, lehrreich. Eines der wenigen Bücher, die wirklich das Denken verändern können. Kritisch: Stellenweise schwerfällig, fast akademisch – nicht jedermanns Lesestil. Für mich: Pflichtlektüre, wenn man menschliches Verhalten verstehen will – intellektuell fordernd, aber lohnend. 🎯 Fazit Thinking, Fast and Slow ist ein epochales Werk, das die Psychologie und Wirtschaft nachhaltig geprägt hat. Es erklärt, warum wir oft systematisch falsch entscheiden – und liefert ein Vokabular, um darüber nachzudenken. ⭐️⭐️⭐️⭐️⭐️ – 5 von 5 Sternen Weil: wissenschaftlich fundiert, kulturell prägend, intellektuell bereichernd.

Surprising, unsettling, enlightening. Thank goodness for authors like this, who open our minds, challenge our prejudices, and break down our preconceptions.