Who Should Read This Book
This book is for anybody with a curious mind and a scientific bend to understanding the nature of human judgment, reasoning, intuition, and decision-making processes. Also, if you are an engineer looking to expand your soft skills and informal education in cognitive psychology and had to read one book, it would be this one.
Daniel Kahneman, a Public and International Affairs professor, wrote this book. He also received the Nobel Prize for Economics in 2002 for his contributions to behavioural economics.
It is described as a mega-bestseller with more than 2.6 million copies sold.
Once you finish the book, you will have a solid idea of what intuition is and how it works to provide us with answers to complex and novel questions. This activity is what the author refers to as thinking fast.
The author describes how thinking fast sometimes steps aside for slow, deliberate, effort-intensive thinking.
The book is divided into five major parts as follows.
Part 1: Two Systems
This first part introduces what the author refers to as System 1 and System 2, which will be the main actors in the coming chapters.
This part of the book superbly describes the essential building blocks of System 1 and System 2, like associative memory, attention and effort, cognitive ease, and how judgment occurs.
In this part of the book, you will appreciate how different our prior judgment notions are from how our minds process information and arrive at conclusions. When logical reasoning is required, we tend to think of ourselves as rational human beings devoid of emotions and capable of finding optimal solutions; Part 1 proves how far that statement is from the truth.
Part 2: Heuristics and Biases
The next part of Thinking Fast and Slow explains a list of biases and heuristics the mind uses to answer everyday questions.
The first chapter shows how inept we are at intuitively handling statistics and how easy it is for the human mind to see causes and effects where there are none.
The subsequent chapters discuss anchors, the availability heuristic, and how to answer difficult questions by substituting them with easier ones for which the answer is readily available in memory.
What I found truly fascinating about this book, in general, was the wealth of experiments it provides to back up and illustrate the concepts it tries to explain. These experiments are majorly quite simple and easy to grasp.
Part 3: Overconfidence
In Part 3 of Thinking Fast and Slow, Kahneman discusses the issue of Overconfidence in six chapters. Overconfidence is a ubiquitous phenomenon we display in our decisions, judgements, the stories we make, and the arguments we put forward to explain past events.
The author colourfully describes the situations where we display Overconfidence before explaining all the reasons behind it.
The central themes of Part 3 are the illusion of understanding (narrative fallacy), the illusion of validity, expert opinion, and the optimistic bias.
In the last chapter, the author states that individuals’ exaggeration of their abilities and unfounded confidence in their future success (optimistic bias) as the main driver behind capitalism.
The final chapter is also about optimistic people and their belief in their ability to forecast the future. It is also about entrepreneurs and how they evaluate (or ignore) risks, obstacles, competition, and the role of luck in their success or failure.
Part 4: Choices
Part 4 of this book discusses the topic of choices, or how people evaluate prospects and losses.
To illustrate his points, Kahneman uses tests that usually constitute a choice between two options. At least one of the two choices has some uncertainty and risk. He then describes people’s default behaviour in choosing between the two options and provides a hypothesis to explain the phenomenon.
This method is used throughout the book and is an excellent way of keeping the reader engaged.
First, the author presents you with a question in the form of choice, and you probably take a few moments to ponder the answer before the author explains what most people generally choose. He then explains why the choice seems irrational when analysed using older frameworks and theories. I found this technique captivating as it allows the reader to participate in the experiments.
These ideas won Kahneman the Nobel Prize for economics since they challenged and overturned the previous assumptions about the rationality of the economic agent.
Part 5: Two Selves
In the fifth and final part of Thinking Fast and Slow, the author discusses the remembering self and the experiencing self.
The proposed framework is used to explain how we evaluate our past experiences. We assess past experiences based on the peak-end and duration neglect rules. Both are counter-intuitive and offer great insights into how we perceive and construct our narratives.
Has the Book Achieved Its Aim?
In his monumental book, Kahneman did a magnificent job explaining how the mind works. He has provided an abundance of new terminology and concepts that allow our everyday language to cope with the complexities of intuition, bias, judgment, decision-making, rationality, and reasoning.
- Loss and Gain
- Prospect Theory
- Past Experience
- Judgment Heuristics
- How the mind works
- Illusions of Validity
- Illusions of Understanding
Topics of social sciences in general and cognitive psychology in particular, despite their relative liveliness compared to hard sciences like physics and algebra, still require some creativity to keep the reader engaged. I think the author of Thinking Fast and Slow has done an excellent job presenting his material.
The style is easy to follow, and complex notions involving statistics, for example, are well explained and easily understood by the general reader.
I found the consistency throughout the chapters in presenting psychological tests and letting the reader participate in those tests particularly helpful in retaining the reader’s attention and making the journey enjoyable.
The book contains very little technical jargon, and the ideas and concepts presented do not require higher education in relevant fields such as psychology, economics, and statistics. The book is highly accessible to general and erudite readers alike.
Daniel Kahneman is a psychologist and economist renowned for his work on judgment and decision-making. His most famous work is on behavioural economics, for which he was awarded the Nobel Prize in 2002. His research overturned the assumption of human rationality, which prevailed in modern economic theory. He is a professor emeritus of psychology and public affairs at Princeton University’s Princeton School of Public and International Affairs.