Intuition, Deliberation, and Laziness
Daniel Kahneman’s primary aim in Thinking, Fast and Slow is to explain human problem-solving, decision-making, and behavioral economics for those without psychology degrees. In order to do that, Kahneman first introduces readers to two ways in which people think, which he calls “System 1” and “System 2.” System 1 handles involuntary, automatic processing, and is often associated with intuition. Peoples’ intuitions are often right, but in certain circumstances, System 1 makes key judgmental errors…read analysis of Intuition, Deliberation, and Laziness
Human Fallibility and Overconfidence
After introducing the two modes of thinking he calls “System 1” and “System 2,” Kahneman illuminates some of the underlying fallacies people rely on as they process information. In addition to humans’ natural tendency towards laziness, people also tend to be overconfident in their abilities to correctly answer questions and make calculations. This overconfidence leads not only to biased conclusions based on a person’s subjective experiences, but often leads to outright error.
In order to…read analysis of Human Fallibility and Overconfidence
Choices, Losses, and Gains
In 2002, Kahneman won the Nobel Prize in Economics for his work in behavioral economics, namely his development of prospect theory with Amos Tversky. Prior to prospect theory, economic theorists believed that the value of money was the sole determinant in explaining why people buy, spend, and gamble in the way that they do. Prospect theory (explained over the course of several chapters of Thinking, Fast and Slow) argues that people’s choices are…read analysis of Choices, Losses, and Gains