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 their soft skills and informal education in cognitive psychology and you had to read one book, it would be this one.
This book was written by Daniel Kahneman, a professor of Public and International Affairs. He was also the recipient of 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.
The aim of the book Thinking Fast and Slow, as stated by the author, is to describe how the mind works in light of the recent developments in cognitive and social psychology.
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 moves on to describe how thinking fast sometimes steps aside for slow, deliberate, effort-intensive thinking.
The book is divided into five major parts:
- 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.
System 1 refers to the fast, intuition-driven decision-making component of our brains that assists us when we drive our cars on a free highway.
System 2 refers to the rational, slow, deliberate and effort-consuming part of our decision-making machine that allows us, for example, to divide two numbers or drive in heavy traffic.
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 notions of judgment are from the reality of how our minds process information and arrive at conclusions. When logical reasoning is required, we tend to think of ourselves as rational 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 that the mind uses to answer various 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 that 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 that 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 the individual’s 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 beliefs in their superior abilities to forecast the future. It is also about entrepreneurs and how they go about evaluating (or ignoring) 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 different options. At least one of the two choices has some uncertainty and risk associated with it. He then describes people’s default behaviour in choosing between the two options and provides a hypothesis to explain the phenomenon.
This method has been 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 very captivating as it allows the reader to participate in the experiments.
These ideas are what 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. In essence, we assess past experiences based on the peak-end rule and the duration neglect rule. 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.
12.6 x 2.4 x 19.7 cm
- Rational Thinking
- Decision Making
- Cognitive Biases
- Intuitive Statistics
- Rare Events
- Loss and Gain
- Prospect Theory
- Past Experience
- Judgment Heuristics
- How the mind works
- Illusions of Validity
- Illusions of Understanding
The book is well structured, and the five major topics are clearly presented, each in its part and corresponding chapters. The ideas flow logically, and the reader will have no issues understanding the narrative that the author is trying to weave.
The book is partly derived from the author’s research and the current literature on cognitive psychology, decision-making, economics, and social psychology. The breadth and wealth of material presented, especially if viewed in conjunction with the psychological tests provided as an introduction to each topic, is just fascinating. The book, however, is more of a popular science than a university textbook, which is what the author intends it to be. The content is highly original.
Cognitive and social psychology are halfway between dry like algebra and vivid like a crime thriller. The author, however, has not been satisfied with that baseline but has successfully turned the material into a somehow living story as he interweaved his research and collaboration with Amos Tversky into the narrative. I found the general tone live and engaging.
I believe that anybody with enough scientific curiosity about how our minds work and how we make decisions should read this book. It is a paradigm-shifting summary of decades of monumental research but Daniel Kahneman and many other economics and cognitive and social psychology researchers. We make hundreds of decisions every day, from the most inconsequential to the life-changing. This book will open our eyes to the forces that drive our judgment, choices, and decisions.
Thinking Fast and Slow covers judgment, decision-making, rationality, and intuition in great depth. The only way it could have had more depth was by discussing the evolutionary or neuroscientific side of the story. Extending the analysis into that domain would have, in my view, gone to the very roots of the problem. Having said that, the book is by no means a thin one; it’s around 500 pages, and I believe the author has probably chosen breadth over depth.
The author has spent decades of his career researching the topics of cognitive psychology, judgment and decision-making, behavioural economics. He has received numerous awards and was recognized for his work in academia throughout the years. He is also a Nobel laureate for his work on behavioural economics and is the top authority on the subject.
Topics of social sciences in general and cognitive psychology in particular, and despite their relative liveliness compared to hard sciences like physics and algebra, still require some degree of creativity to keep the reader engaged. My view is that the author of Thinking Fast and Slow has done an excellent job of presenting his material.
The style is easy to follow, and complex notions involving statistics, for example, are well explained and can be understood with relative ease by the general reader.
I found the consistency present 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 highly enjoyable.
The book contains very little technical jargon, and the ideas and concepts presented do not require higher education in the relevant fields such as psychology, economics, and statistics. The book is highly accessible to the general and erudite reader 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 professor emeritus of psychology and public affairs at Princeton University’s Princeton School of Public and International Affairs.