Thinking, Fast and Slow

BY DANIEL KAHNEMAN

Reviewed by Todd

I have always found it difficult to recommend books about decision-making. A near limitless demand exists for titles that dispense advice and tell people exactly what to do, but it’s much more difficult to ask someone to read about how they think. Some professions welcome that inquiry, like military officers with their after-action reviews or (some) fund managers examining the damaging tendencies in their trading patterns.

In reading Thinking, Fast and Slow, you get both a primer and a textbook for some of the most important work in the last fifty years on understanding how we make decisions. You get the added bonus that the tour is led by Daniel Kahneman who, with the late Amos Tversky, led much of the original research. The impact of their research created entirely new fields of study like behavioral economics, and was recognized with Kahneman being awarded the Nobel Prize in Economic Sciences in 2002.

Kahneman has described the work as “ironic research.” The duo was always trying to find out why people acted in ways that didn’t conform to popular theories. While some human behaviors were labeled irrational, unreasonable, or even stupid, Kahneman and Tversky looked at those same situations and saw an opportunity better to understand human behavior. This kind of work has influenced such best-selling writers as Malcolm Gladwell, the Heath brothers, and the Freakonomics guys, ultimately ushering in a new type of business book based on social science.

The book’s title refers to the two competing systems the brain uses to process information. System 1 is the quick and automatic function that can add two and two in a heartbeat and easily drive a car on an empty road. System 2 engages when more deliberate thought is needed, like when you tell someone your telephone number, or you walk faster than your natural pace. Many of Kahneman’s experiments were to find the limits of these two systems. System 1 can move too fast and fail to send an alert that it needs help from System 2, while System 2 can become overwhelmed and fatigued from prolonged engagements with complicated tasks.

“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 nature and interaction of these two thinking systems leads to a variety of preprogrammed responses and biases. Our tendency to see interesting patterns hides the plain randomness of most circumstances. Giving a person just a few pieces of information creates an anchor that sways their perception. A complicated question gets simplified into a different question that is easier to answer. And the list goes on.

These two researchers used simple experiments to test their theories. That approach makes their research easy to understand, and Kahneman uses that same clarity to explain their findings and the implications on our decision-making, as these cognitive short circuits cause a host of issues for us. You, the reader, will also be surprised by finding yourself caught in a mental trap they set. We get overconfident in conditions where we shouldn’t be. We think our last success will certainly lead to great outcomes again. We trust our gut when data and algorithms show us something different. Any of these sound familiar? Seeing all of these flaws presented one after another makes Thinking, Fast and Slow a challenge to read. There are so many ways to lead ourselves astray without even realizing it, but that’s also what makes a book like this so important. TS

Thinking, Fast and Slow, Farrar, Straus and Giroux, Paperback 2013, 9780374533557

WHERE TO NEXT? Here for more on mental states Here for one of Kahneman’s collaborators Here for another way to look at intelligence | EVEN MORE: Nudge by Richard H. Thaler and Cass B. Sunstein; Willpower by Roy F. Baumeister and John Tierney; The Halo Effect by Phil Rosenzweig