Max's Reviews > Thinking, Fast and Slow

Thinking, Fast and Slow by Daniel Kahneman
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it was amazing
bookshelves: science

Kahneman divides the way we think into two “systems”. These are not actual entities, but constructs that represent distinct modes of thought. System 1 is our intuitive sense covering ideas and feelings that just pop into our heads without effort. System 2 is our reasoning, rational sense that we use when we deliberately think things through. He offers many different scenarios that determine whether System 1 or System 2 is engaged. Realizing that this determination itself is often automatic can leave you feeling a little less in control.

Kahneman shows us how many ways our thinking can go off track. Our immediate thoughts occur by association, resemblance to the familiar or because they represent our expectations. We jump to conclusions because it is the easiest thing to do. Our minds have an inherent laziness. We often stick with the first thought that comes to mind even though the situation calls for engaging System 2. If a question is just too hard for System 1, System 1 will make it simpler so we can forgo the mental work of engaging System 2.
Even when System 2 does engage, System 1 can subvert it without us being aware. Priming is the effect of being influenced by prior unrelated information. For example, Kahneman points to experiments that show just hearing something about money makes our subsequent behavior more self-centered. Anchoring refers to hearing or seeing a fact that sets a beginning point for evaluation of a subsequent problem. Just putting a number in the mind can make it a starting point for thinking about anything that comes next. Setting targets unrealistically high or low is used by negotiators to make their real goals seem more reasonable.

Representativeness is about using stereotypes or imputing one quality from another similar to the halo effect. The halo effect occurs when current opinions often formed by System 1 shape subsequent judgements even if they are about something completely unrelated. For example if you find someone personable you are more likely to think they are also generous. Availability refers to anything that we hear repeatedly, which will be quickly recalled and used by System 1. And of course any judgement, snap or not, is subject to our emotions and mood. Preceding unrelated events may change the decisions we make.

While System 1 operates at the WYSIATI (What You See Is All There Is) level ignoring information not immediately at hand, it can add things that are not there. It imputes motive and intent. It postulates connections between events. When System 1 is challenged by limited information it fills in the blanks. This may be very useful in some situations, but it also leads to unsupported assumptions and conspiracy theories.

Most people tend to overconfidence in their judgement. We think we know more than we do. We underestimate randomness and put too much faith in patterns that are often temporary or simply imagined. We ignore baselines of activity and are overly influenced by recent events even though reversion to the mean is typically a better predictor of future outcomes. Intuition can be helpful but only when used by experts in fields where statistically significant correlations exist.

Kahneman challenges conventional economic theory that assumes people are rational when they buy or sell. He identifies many influences that make economic decisions subjective. Key is loss aversion vs. gain. Losses are more psychologically painful and thus fear of them overweight decisions to avoid them. Context is very important. The significance of the amount to your personal situation matters. Just owning something increases its value to the owner. Framing is important. The language describing a transaction will invoke a System 1 response. Preceding transactions alter perception of the value of subsequent ones. Kahneman gives many more examples and decimates the notion of the rational consumer.

Another fascinating concept concerns how we view our lives. Are we the experienced self or the remembered self? The experienced self consists of our feelings as we lived them, the other as they are remembered. The two are different. A twenty year marriage that was happy for 19 out of twenty years is very positive for the experienced self, but if the marriage ended in a bitter divorce it might all be remembered very negatively. A more mundane example is choosing a vacation. Do you choose a familiar place you know you like or a more stressful one that will create memories? The way we remember our lives does not match the way we lived them.

Clearly this is a book to shake up your sense of self, and if you are like me you will enjoy the challenge. It also helps us to understand others and our relationships, although Kahneman doesn’t specifically target that aspect. I couldn’t keep from thinking of how System 1 and System 2 applied to people’s thinking in this year’s presidential election. Kahneman’s presentation is clear even for something as tricky as Bayesian analysis. My notes above cover only a small sample of the ideas in the book. I think most readers will find something to appreciate. Highly recommended.
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Reading Progress

July 25, 2016 – Started Reading
July 25, 2016 – Shelved
August 2, 2016 – Finished Reading
September 16, 2016 – Shelved as: science

Comments Showing 1-2 of 2 (2 new)

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message 1: by Clif (new)

Clif wow! What a book - and review. I am going to copy your review and send it to some friends of mine (with attribution, of course).

This makes one marvel at the fact that we with our primative (literally "like a primate") minds are still here in this modern age with weapons of mass destruction. You can see how the instantaneous reaction would be valuable for personal survival in an environment where all kinds of possibly lethal encounters could occur suddenly - in a forest or jungle for example - though the knee-jerk thought might be wrong, you would still be alive.

I think in boot camp they train soldiers to have learned techniques ready to use when the instantaneous response happens...when the adrenaline floods, you know exactly how to swing your rifle or grab your knife.

One could say, using the material from this book, that we are creatures whose considered rational thought has built a high-tech world within which our knee-jerk minds still roam.

I appreciate your reviews, Max. Whenever I despair that there isn't enough time to read all the books I want to read, I can relax knowing that you are out there reading quite a few of them for me!

message 2: by Max (new) - rated it 5 stars

Max Thanks for the very kind words, Clif. I enjoy long reviews such as yours for the same reason. If I decide to read the book, it's more likely to be time well spent. If I pass, I still get the benefit of learning about it from people whose opinions I respect.

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