Thinking, Fast and Slow by Daniel Kahneman

Thinking, Fast and Slow by Daniel Kahneman. I mentioned the book before in the review of 50 Philosophy Classics by Tom Butler-Bowdon. I was eager to read the book and I wasn’t disappointed. It’s fantastic. Thinking, Fast and Slow by Daniel Kahneman is also mentioned in other books, like Exodus by Paul Collier, another book I found very interesting.
Kahneman uses games and tests to exemplify the notions in the book and that makes it even more clear and intriguing. This review will be a bit different. I’m going to talk about points I found interesting in the book. I want to remember them and I will re-read my review in six months or so. Also, I’m going to buy the book, as the one I’ve read was borrowed from the library.

Thinking, Fast and Slow by Daniel Kahneman

The book is about the two systems of thought: System 1 or automatic system and System 2 or effortful system. Some of the things mentioned in the book are quite unexpected. For example, walking at a faster pace involves System 2, due to its constant reliance on self-control not to respond to the urge of slowing down.

Ego depletion is another aspect that influences our thought process. It affects the way we do complex tasks. Also, we are more likely to perform better if we have something sweet (glucose) to eat when we are doing mentally draining tasks.

Companies with recognizable and easy to use names do better due to our cognitive ease.

A politician’s face makes a difference when people are choosing which one to vote. Studies were done in US, England, Australia, Germany, Mexico with the same results. People that looked more competent had more chances of being elected. Obviously, the impact is greater on information-poor and TV-prone voters than on the others.

People have exaggerated faith in small samples. The content seems more important for us than the reliability of the study. This can have implications from buying a product that has on the label “90% of people would buy it again” to politics.

Availability is another important aspect. If we see something in the news, we think is much more common that it is in reality. An availability cascade can happen too. This is where a chain of events is triggered and that can lead even to change in policies. Because the government acts in response to public pressure and, after all, they have the same fears like everybody else.

Regression to mediocrity is interesting too. People that are praised might not do better next time, while people that are punished do better. Not because praise and punishment are particularly efficient, but because someone is praised when it does something better than ordinary and the same goes with punishment. As it might be a good/bad day, they will regress to mediocrity, or to mean.

The halo effect influences us much more than we think in the beginning. If we like someone, we think that person is better at their job without actually knowing anything about their efficiency.

“The human mind does not deal well with nonevents.”

“The core of the illusion is that we believe we understand the past, which implies that the future also should be knowable, but in fact we understand the past less than we believe we do.”

His two chapters about illusions and intuitions are revealing. His examples on expert intuitions are a bit old, so I’m going to use some modern ones.
First of all, many political and economical experts said the UK’s economy will shrink after Brexit. Well, the facts are that the economic growth in 2017 was of 1.8%, less than 2016 when it was 1.9%, but it still grew. Furthermore, 1.8% was higher than other countries that remained in the EU, like France, Italy and just 0.1% lower than Germany. Obviously the experts didn’t get their forecasts quite right.
Another example that comes to mind is the forecasts of migrant numbers from Poland. In 2004, the labour government believed that only a few thousands Poles will move to UK each year. It turned out that the number of migrants was approximately 1,000,000, that’s a bit of a gap, isn’t it?
Political analysts also believed Hillary Clinton will win. Imagine everyone’s surprise when Trump did win.

All the things the experts say in newspapers, in televised political debates will affect the way we vote and think. So, how much can we trust in their ability to make accurate predictions? Also, if highly-paid experts that do this for a living can get it so wrong, what can we do? We should consider of how we can change the way we think about the political candidates, the policies, and in everyday life too.

In the talk about planning fallacies, Kahneman gives examples from underestimating the costs of home renovations. It did struck a cord there, as I’ve been through this twice and it took longer and it was more expensive both times. But, he also gives the example of the Scottish Parliament. In 1997, after the devolution, a new Parliament was needed in Edinburgh. It started as a building that would cost £40 million. After 7 years, the final prices was an astonishing £431 million. It did made me feel better about my renovations, at least mine weren’t ~11 times more expensive.

Games of choosing between a sure bet where you win or lose a specific amount was fascinating. We are prone to be risk adverse when it comes to winning and risk seeking when it comes to loosing.
“Loss aversion refers to the relative strength of two motives: we are driven more strongly to avoid losses than to achieve gains.”

The endowment effect is explained by the story of the professor that doesn’t want to sell a bottle of wine for a profit because it’s his bottle of wine and prefers to keep it. We give meaning (or weight) to things and that can, sometimes, lead to taking a bad decision.

“People who face very bad options take desperate gambles, accepting a high probability of making things worse in exchange for a small hope of avoiding a large loss. Risk taking of this kind often turns manageable failures into disasters. The thought of accepting the large sure loss is too painful, and the hope of complete relief too enticing, to make the sensible decision that it is time to cut one’s losses.”

“People overestimate the probabilities of unlikely events.
People overweight unlikely events in their decisions.”

“The sunk-cost fallacy keeps people for too long in poor jobs, unhappy marriages, and unpromising research projects.” Basically we are willing to spend more time or money on something that is doomed because we don’t want to admit failure.

Regret is also more intense if it’s caused by an action instead of inaction.

“Choices are not reality-bound because System 1 is not reality-bound.” Studies have shown that when subjects have to chose between lose or gain, the amygdala is active. If lose is chosen, another part of the brain becomes active (the anterior cingulate), associated with conflict and self-control. For rational people, those who challenge the frames (the difference between the two options they were presented with) another part of the brain is active, the frontal area, that is associated with combining emotions and reason to guide decisions.

Kahneman talks about two selves. “The experiencing self is the one that answers the question: Does it hurt now? The remembering self is the one that answers the question: How was it, on the whole? Memories are all we get to keep from our experience of living, and the only perspective that we can adopt as we think about our lives is therefore that of the remembering self.”

“In intuitive evaluation of entire lives as well as brief episodes, peaks and ends matter but duration does not.”

I’ve read about marriage and happiness in other books and Kahneman mentions the same thing: “Experienced well-being is on average unaffected by marriage, not because marriage makes no difference to happiness but because it changes some aspects of life for the better and others for the worse.”
I was also surprised to see the study made in US in which women have more unpleasant episodes regarding child care than housework. I was expected to be the other way around.

The last concept I’m going to talk about is miswanting, introduced by Daniel Gilbert and Timothy Wilson. Basically we can take bad decisions due to affective forecasting. “The focusing illusion is a rich source of miswanting. In particular, it makes us prone to exaggerate the effect of significant purchases or changed circumstances on our future well-being.” One example was moving to a part of the country with a warmer climate.

Kahneman mentions a book I would love to read Clinical vs Statistical Prediction: A Theoretical Analysis and a Review of the Evidence by Paul Meehl.

In the copy I have there are two appendixes with articles that I would suggest reading too.

Thinking, Fast and Slow by Daniel Kahneman

Details about the picture: –
My rating: 5/5 Stars.
Would I recommend it: Yes!
Published by: Penguin Books
Year it was published: 2011
Format: Paperback
Genre(s): Non-fiction. Psychology.
Pages: 499

About the author: Daniel Kahneman was born on 5th March 1934 in Tel Aviv to Lithuanian Jews. His father was for six weeks at Drancy during WWII, but was released because of interventions made by the firm he was working at. They escaped to France. His father died from diabetes in ’44, a few weeks before D-Day.
As a teenager, in Palestine, he realized he was more interested in what made people believe in God than whether God existed. He was also more curious about the origins of people’s convictions about right and wrong than he was about ethics. He graduated Psychology at Hebrew University in Jerusalem. In the early 50s he worked at the Psychology branch of the Israel Defense Forces. In 1958, Kahneman and his wife Irah, moved to US, with a grant from Hebrew University so he could study at Berkeley.
He went on to teach at undergraduates and that was something he loved doing. He had different teaching positions in diverse areas, like flight instructors and helped designed a training program for new migrants in Yemen.
In 1969 he did research at the Applied Psychological Research Unit in Cambridge. At that time he was also working with Amos Tversky. They did research into decision making and published papers on this subject during the years. In 1978 he married Anne Treisman, an English psychologist, and they were married until her death earlier this year.
The book Thinking, Fast and Slow by Daniel Kahneman is dedicated to Amos Tversky. They intended to write the book together, but Tversky died before that could happen.
Website & Social Media Links: A detailed biography is available on Nobel Prize website.

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