Thinking, Fast and Slow

by Daniel Kahneman

we were able to trace their error to an exaggerated belief in the importance of climate. We described the error as a focusing illusion.

“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.

The substitution caused you to ignore the fact that you rarely think about your car, a form of duration neglect. The upshot is a focusing illusion.

Thoughts of any aspect of life are more likely to be salient if a contrasting alternative is highly available.

Pain and noise are biologically set to be signals that attract attention, and depression involves a self-reinforcing cycle of miserable thoughts.

we can expect the experienced well-being of paraplegics to be near normal much of the time. Adaptation to a new situation, whether good or bad, consists in large part of thinking less and less about it.

Experience sampling shows no difference in experienced happiness between these patients and a healthy population. Yet colostomy patients would be willing to trade away years of their life for a shorter life without the colostomy.

Here it appears that the remembering self is subject to a massive focusing illusion about the life that the experiencing self endures quite comfortably.

Daniel Gilbert and Timothy Wilson introduced the word miswanting to describe bad choices that arise from errors of affective forecasting.

The focusing illusion (which Gilbert and Wilson call focalism) is a rich source of miswanting. In particular, it makes us prone to exaggerate the effect of significant purchases o...

The focusing illusion creates a bias in favor of goods and experiences that are initially exciting, even if they will eventually lose their appeal.

But this is not how the mind represents episodes. The remembering self, as I have described it, also tells stories and makes choices, and neither the stories nor the choices properly represent time.

The mistake that people make in the focusing illusion involves attention to selected moments and neglect of what happens at other times. The mind is good with stories, but it does not appear to be well designed for the processing of time.

Duration neglect and the peak-end rule in the evaluation of stories, both at the opera and in judgments of Jen’s life, are equally indefensible.

Duration neglect and the peak-end rule originate in System 1 and do not necessarily correspond to the values of System 2. We believe that duration is important, but our memory tells us it is not.

The central fact of our existence is that time is the ultimate finite resource, but the remembering self ignores that reality.

bias that favors a short period of intense joy over a long period of moderate happiness.

we can determine only after the fact that a moment is memorable or meaningful. The statements “I will always remember…” or “this is a meaningful moment” should be taken as promises or predictions, which can be false—and often are—even when uttered with complete sincerity.

Rationality is logical coherence—reasonable or not. Econs are rational by this definition, but there is overwhelming evidence that Humans cannot be.

Reasonable people cannot be rational by that definition, but they should not be branded as irrational for that reason.

Although Humans are not irrational, they often need help to make more accurate judgments and better decisions,

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.

Freedom is not a contested value; all the participants in the debate are in favor of it. But life is more complex for behavioral economists than for true believers in human rationality.

For behavioral economists, however, freedom has a cost, which is borne by individuals who make bad choices, and by a society that feels obligated to help them.

It also presented a set of solutions to the dilemma of how to help people make good decisions without curtailing their freedom. 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.

Humans, unlike Econs, need help to make good decisions, and there are informed and unintrusive ways to provide that help.

However, the relative number of pages is a poor indicator of the balance between the marvels and the flaws of intuitive thinking. System 1 is indeed the origin of much that we do wrong, but it is also the origin of most of what we do right—which is most of what we do.

The acquisition of skills requires a regular environment, an adequate opportunity to practice, and rapid and unequivocal feedback about the correctness of thoughts and actions. When these conditions are fulfilled, skill eventually develops, and the intuitive judgments and choices that quickly come to mind will mostly be accurate.

System 1 registers the cognitive ease with which it processes information, but it does not generate a warning signal when it becomes unreliable.

What can be done about biases? How can we improve judgments and decisions, both our own and those of the institutions that we serve and that serve us? The short answer is that little can be achieved without a considerable investment of effort.

The way to block errors that originate in System 1 is simple in principle: recognize the signs that you are in a cognitive minefield, slow down, and ask for reinforcement from System 2.

Unfortunately, this sensible procedure is least likely to be applied when it is needed most.

Organizations are better than individuals when it comes to avoiding errors, because they naturally think more slowly and have the power to impose orderly procedures.

There is much to be done to improve decision making. One example out of many is the remarkable absence of systematic training for the essential skill of conducting efficient meetings.

Much like medicine, the identification of judgment errors is a diagnostic task, which requires a precise vocabulary.

There is a direct link from more precise gossip at the watercooler to better decisions.

They will make better choices when they trust their critics to be sophisticated and fair, and when they expect their decision to be judged by how it was made, not only by how it turned out.

When no specific evidence is given, prior probabilities are properly utilized; when worthless evidence is given, prior probabilities are ignored.3