Thinking, Fast and Slow – By Daniel Kahneman – Book Evaluation
In 2002, Daniel Kahneman won the Nobel in financial science. What made this unusual is that Kahneman is a psychologist. Specifically, he is one-half of a pair of psychologists who, beginning within the early Nineteen Seventies, got down to dismantle an entity long pricey to economic theorists: that arch-rational resolution maker generally known as Homo economicus. The other half of the dismantling duo, Amos Tversky, died in 1996 on the age of 59. Had Tversky lived, he would definitely have shared the Nobel with Kahneman, his longtime collaborator and expensive friend.
Human irrationality is Kahneman’s nice theme. There are essentially three phases to his career. Within the first, he and Tversky did a sequence of ingenious experiments that exposed twenty or so “cognitive biases” — unconscious errors of reasoning that distort our judgment of the world. Typical of these is the “anchoring effect”: our tendency to be influenced by irrelevant numbers that we happen to be exposed to. (In a single experiment, as an example, experienced German judges were inclined to provide a shoplifter a longer sentence if they had just rolled a pair of dice loaded to present a high number.) In the second section, Kahneman and Tversky showed that folks making choices below uncertain conditions do not behave in the way that economic models have traditionally assumed; they do not “maximize utility.” The 2 then developed an alternate account of resolution making, one more trustworthy to human psychology, which they called “prospect theory.” (It was for this achievement that Kahneman was awarded the Nobel.) In the third part of his career, primarily after the loss of life of Tversky, Kahneman has delved into “hedonic psychology”: the science of happiness, its nature and its causes. His findings in this space have proved disquieting — and not just because one of many key experiments involved a deliberately extended colonoscopy.
“thinking fast and slow daniel kahneman audiobook part 1, Fast and Sluggish” spans all three of these phases. It’s an astonishingly rich book: lucid, profound, filled with mental surprises and self-help value. It is consistently entertaining and continuously touching, particularly when Kahneman is recounting his collaboration with Tversky. (“The pleasure we present in working collectively made us exceptionally affected person; it is much simpler to strive for perfection if you end up by no means bored.”) So impressive is its vision of flawed human reason that the New York Occasions columnist David Brooks just lately declared that Kahneman and Tversky’s work “shall be remembered hundreds of years from now,” and that it is “an important pivot level in the best way we see ourselves.” They are, Brooks stated, “just like the Lewis and Clark of the mind.”
Now, this worries me a bit. A leitmotif of this book is overconfidence. All of us, and particularly consultants, are prone to an exaggerated sense of how well we perceive the world — so Kahneman reminds us. Absolutely, he himself is alert to the perils of overconfidence. Despite all of the cognitive biases, fallacies and illusions that he and Tversky (along with different researchers) purport to have discovered in the last few decades, he fights shy of the bold claim that humans are basically irrational.
Or does he? “Most of us are healthy more often than not, and most of our judgments and actions are appropriate more often than not,” Kahneman writes in his introduction. But, just a number of pages later, he observes that the work he did with Tversky “challenged” the thought, orthodox amongst social scientists in the Seventies, that “persons are typically rational.” The two psychologists discovered “systematic errors in the thinking of normal individuals”: errors arising not from the corrupting effects of emotion, however constructed into our advanced cognitive machinery. Although Kahneman draws only modest coverage implications (e.g., contracts should be acknowledged in clearer language), others — perhaps overconfidently? — go a lot further. Brooks, for example, has argued that Kahneman and Tversky’s work illustrates “the boundaries of social coverage”; in particular, the folly of presidency action to battle joblessness and turn the financial system around.