Thinking Fast And Gradual - By Daniel Kahneman - Book Evaluation

In 2002, Daniel Kahneman won the Nobel in economic science. What made this uncommon is that Kahneman is a psychologist. Specifically, he is one-half of a pair of psychologists who, beginning in the early 1970s, set out to dismantle an entity long pricey to financial theorists: that arch-rational decision maker known as Homo economicus. The other half of the dismantling duo, Amos Tversky, died in 1996 at the age of 59. Had Tversky lived, he would definitely have shared the Nobel with Kahneman, his longtime collaborator and pricey friend.

Human irrationality is Kahneman’s nice theme. There are primarily three phases to his career. Within the first, he and Tversky did a collection of ingenious experiments that exposed twenty or so "cognitive biases" — unconscious errors of reasoning that distort our judgment of the world. Typical of these is the "anchoring effect": our tendency to be influenced by irrelevant numbers that we occur to be uncovered to. (In a single experiment, as an example, skilled German judges have been inclined to provide a shoplifter a longer sentence if they had just rolled a pair of cube loaded to provide a high number.) Within the second phase, Kahneman and Tversky showed that people making choices beneath uncertain circumstances don't behave in the best way that economic fashions have traditionally assumed; they don't "maximize utility." The 2 then developed another account of decision making, one more devoted to human psychology, which they called "prospect theory." (It was for this achievement that Kahneman was awarded the Nobel.) Within the third part of his career, mainly after the demise of Tversky, Kahneman has delved into "hedonic psychology": the science of happiness, its nature and its causes. His findings in this space have proved disquieting — and not just because one of the key experiments concerned a deliberately prolonged colonoscopy.

"Thinking, Fast and Gradual" spans all three of those phases. It's an astonishingly rich book: lucid, profound, full of intellectual surprises and self-assist value. It's constantly entertaining and steadily touching, particularly when Kahneman is recounting his collaboration with Tversky. ("The pleasure we found in working together made us exceptionally affected person; it is much easier to attempt for perfection when you find yourself by no means bored.") So spectacular is its imaginative and prescient of flawed human reason that the New York Times columnist David Brooks recently declared that Kahneman and Tversky’s work "will probably be remembered hundreds of years from now," and that it's "a crucial pivot point in the best way we see ourselves." They're, Brooks stated, "like the Lewis and Clark of the mind."

Now, this worries me a bit. A leitmotif of this book is overconfidence. All of us, and particularly consultants, are liable to an exaggerated sense of how well we understand the world — so Kahneman reminds us. Certainly, he himself is alert to the perils of overconfidence. Despite all the cognitive biases, fallacies and illusions that he and Tversky (together with different researchers) purport to have discovered in the previous few decades, he fights shy of the bold claim that humans are fundamentally irrational.

Or does he? "Most of us are wholesome more often than not, and most of our judgments and actions are applicable most of the time," Kahneman writes in his introduction. Yet, just just a few pages later, he observes that the work he did with Tversky "challenged" the idea, orthodox amongst social scientists within the Nineteen Seventies, that "persons are typically rational." The 2 psychologists discovered "systematic errors in the thinking fast and slow daniel kahneman audiobook part 1 of regular individuals": errors arising not from the corrupting effects of emotion, however constructed into our advanced cognitive machinery. Although Kahneman attracts only modest coverage implications (e.g., contracts must be said in clearer language), others — perhaps overconfidently? — go a lot further. Brooks, for example, has argued that Kahneman and Tversky’s work illustrates "the limits of social coverage"; specifically, the folly of presidency motion to combat joblessness and switch the economy around.