October 24, 2011

Vol. 27 , No. 04   

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Thinking, Fast and Slow

A Nobel laureate in economics (one of the only non-economists to earn this honor) and a research psychologist world-renowned for his seminal work on judgment, decision making, and happiness and well-being, Daniel Kahneman has been hugely influential on notable writers like Dan Ariely, Richard Thaler, Steven Pinker, and Daniel Gilbert. His ideas have revolutionized economics, medicine, psychology, philosophy, legal studies, and a host of other disciplines by challenging fundamental ideas about rationality in thinking and decision making. In Kahneman’s view of the mind, developed through decades of path-breaking research, we are blind to our cognitive blind spots: we often don’t know why we make the judgments and choices we do, we are bad at knowing what we want and what will make us happy, and the model of the world in our heads often doesn’t correspond to the world as it really is. Our thinking and behavior are shaped by systematic cognitive errors — the biases of intuition that Kahneman is widely credited with first revealing.
Kahneman is an eminence grise for the Freakonomics crowd. In the mid-1970s, with his collaborator Amos Tversky, he was among the first academics to pick apart exactly why we make "wrong" decisions. In their 1979 paper on prospect theory, Kahneman and Tversky examined a simple problem of economic risk. And rather than stating the optimal, rational answer, as an economist of the time might have, they quantified how most real people, consistently, make a less-rational choice. Their work treated economics not as a perfect or self-correcting machine, but as a system prey to quirks of human perception. The field of behavioral economics was born.

Kahneman was awarded the Nobel Memorial prize in 2002 for his work with Tversky, who died before the award was bestowed. In a lovely passage in his Nobel biography, Kahneman looks back on his deep collaboration with Tversky and calls for a new form of academic cooperation, marked not by turf battles but by "adversarial collaboration," a good-faith effort by unlike minds to conduct joint research, critiquing each other in the service of an ideal of truth to which both can contribute. "Amos and I shared the wonder of together owning a goose that could lay golden eggs -- a joint mind that was better than our separate minds."

In Thinking, Fast and Slow, Kahneman illuminates what he calls the “machinery of the mind.” Two systems drive the way we think and make choices: System One is fast, intuitive, and emotional: System Two is slower, more deliberative, and more logical. Examining how both systems function, Kahneman exposes both the extraordinary capabilities and also the faults and biases of fast thinking, and the pervasive influence of intuitive impressions on our thoughts and our choices.
Daniel Kahneman is the Eugene Higgins Professor of Psychology Emeritus at Princeton University and Professor of Psychology and Public Affairs Emeritus at Princeton’s Woodrow Wilson School of Public and International Affairs.