Thinking, Fast and Slow

by Daniel Kahneman

Norbert Schwarz and his colleagues invited subjects to the lab to complete a questionnaire on life satisfaction. Before they began that task, however, he asked them to photocopy a sheet of paper for him. Half the respondents found a dime on the copying machine, planted there by the experimenter. The minor lucky incident caused a marked improvement in subjects’ reported satisfaction with their life as a whole! A mood heuristic is one way to answer life-satisfaction questions. The dating survey and the coin-on-the-machine experiment demonstrated, as intended, that the responses to global well-being questions should be taken with a grain of salt. But of course your current mood is not the only thing that comes to mind when you are asked to evaluate your life. You are likely to be reminded of significant events in your recent past or near future; of recurrent concerns, such as the health of a spouse or the bad company that your teenager keeps; of important achievements and painful failures. A few ideas that are relevant to the question will occur to you; many others will not. Even when it is not influenced by completely irrelevant accidents such as the coin on the machine, the score that you quickly assign to your life is determined by a small sample of highly available ideas, not by a careful weighting of the domains of your life.

The essence of the focusing illusion is WYSIATI, giving too much weight to the climate, too little to all the other determinants of well-being. To appreciate how strong this illusion is, take a few seconds to consider the question: How much pleasure do you get from your car? An answer came to your mind immediately; you know how much you like and enjoy your car. Now examine a different question: “When do you get pleasure from your car?” The answer to this question may surprise you, but it is straightforward: you get pleasure (or displeasure) from your car when you think about your car, which is probably not very often. Under normal circumstances, you do not spend much time thinking about your car when you are driving it. You think of other things as you drive, and your mood is determined by whatever you think about.

Adaptation to a new situation, whether good or bad, consists in large part of thinking less and less about it. In that sense, most long-term circumstances of life, including paraplegia and marriage, are part-time states that one inhabits only when one attends to them.

Compare two commitments that will change some aspects of your life: buying a comfortable new car and joining a group that meets weekly, perhaps a poker or book club. Both experiences will be novel and exciting at the start. The crucial difference is that you will eventually pay little attention to the car as you drive it, but you will always attend to the social interaction to which you committed yourself. By WYSIATI, you are likely to exaggerate the long-term benefits of the car, but you are not likely to make the same mistake for a social gathering or for inherently attention-demanding activities such as playing tennis or learning to play the cello. The focusing illusion creates a bias in favor of goods and experiences that are initially exciting, even if they will eventually lose their appeal. Time is neglected, causing experiences that will retain their attention value in the long term to be appreciated less than they deserve to be.

I began this book by introducing two fictitious characters, spent some time discussing two species, and ended with two selves. The two characters were the intuitive System 1, which does the fast thinking, and the effortful and slower System 2, which does the slow thinking, monitors System 1, and maintains control as best it can within its limited resources. The two species were the fictitious Econs, who live in the land of theory, and the Humans, who act in the real world. The two selves are the experiencing self, which does the living, and the remembering self, which keeps score and makes the choices. In this final chapter I consider some applications of the three distinctions, taking them in reverse order.

The remembering self is a construction of System 2.

We believe that duration is important, but our memory tells us it is not.

The remembering self and the experiencing self must both be considered, because their interests do not always coincide. Philosophers could struggle with these questions for a long time.

The definition of rationality as coherence is impossibly restrictive; it demands adherence to rules of logic that a finite mind is not able to implement. Reasonable people cannot be rational by that definition, but they should not be branded as irrational for that reason. Irrational is a strong word, which connotes impulsivity, emotionality, and a stubborn resistance to reasonable argument. I often cringe when my work with Amos is credited with demonstrating that human choices are irrational, when in fact our research only showed that Humans are not well described by the rational-agent model. Although Humans are not irrational, they often need help to make more accurate judgments and better decisions, and in some cases policies and institutions can provide that help.

A Theory of Rational Addiction; it explains how a rational agent with a strong preference for intense and immediate gratification may make the rational decision to accept future addiction as a consequence. I once heard Gary Becker, one of the authors of that article, who is also a Nobel laureate of the Chicago school, argue in a lighter vein, but not entirely as a joke, that we should consider the possibility of explaining the so-called obesity epidemic by people’s belief that a cure for diabetes will soon become available. He was making a valuable point: when we observe people acting in ways that seem odd, we should first examine the possibility that they have a good reason to do what they do. Psychological interpretations should only be invoked when the reasons become implausible—which Becker’s explanation of obesity probably is.

Thaler and Sunstein advocate a position of libertarian paternalism, in which the state and other institutions are allowed to nudge people to make decisions that serve their own long-term interests. The designation of joining a pension plan as the default option is an example of a nudge. It is difficult to argue that anyone’s freedom is diminished by being automatically enrolled in the plan, when they merely have to check a box to opt out.

The nudge is based on sound psychology, which I described earlier. The default option is naturally perceived as the normal choice. Deviating from the normal choice is an act of commission, which requires more effortful deliberation, takes on more responsibility, and is more likely to evoke regret than doing nothing. These are powerful forces that may guide the decision of someone who is otherwise unsure of what to do.

The attentive System 2 is who we think we are. System 2 articulates judgments and makes choices, but it often endorses or rationalizes ideas and feelings that were generated by System 1.

When a challenge is encountered to which a skilled response is available, that response is evoked. What happens in the absence of skill? Sometimes, as in the problem 17 × 24 = ?, which calls for a specific answer, it is immediately apparent that System 2 must be called in. But it is rare for System 1 to be dumbfounded. System 1 is not constrained by capacity limits and is profligate in its computations. When engaged in searching for an answer to one question, it simultaneously generates the answers to related questions, and it may substitute a response that more easily comes to mind for the one that was requested.

System 1 registers the cognitive ease with which it processes information, but it does not generate a warning signal when it becomes unreliable. Intuitive answers come to mind quickly and confidently, whether they originate from skills or from heuristics. There is no simple way for System 2 to distinguish between a skilled and a heuristic response. Its only recourse is to slow down and attempt to construct an answer on its own, which it is reluctant to do because it is indolent. Many suggestions of System 1 are casually endorsed with minimal checking, as in the bat-and-ball problem. This is how System 1 acquires its bad reputation as the source of errors and biases. Its operative features, which include WYSIATI, intensity matching, and associative coherence, among others, give rise to predictable biases and to cognitive illusions such as anchoring, nonregressive predictions, overconfidence, and numerous others.

System 1 is not readily educable.

Chance is commonly viewed as a self-correcting process in which a deviation in one direction induces a deviation in the opposite direction to restore the equilibrium. In fact, deviations are not “corrected” as a chance process unfolds, they are merely diluted.

This article has been concerned with cognitive biases that stem from the reliance on judgmental heuristics. These biases are not attributable to motivational effects such as wishful thinking or the distortion of judgments by payoffs and penalties. Indeed, several of the severe errors of judgment reported earlier occurred despite the fact that subjects were encouraged to be accurate and were rewarded for the correct answers.22