Thinking, Fast and Slow (original 2011; edition 2011)

This book examines interesting ideas, but the author won the Nobel prize for economics, not literature. Dull writing.

An aspiring novelist must be a stubborn, irrational, plodding fool. A successful novelist is a lucky, stubborn, irrational, plodding fool.
This book explains why most novels are never completed or, if completed, never published.
A complex, long-term, open-ended project is a risky venture. Odds are so grim the creator engages in self-deception just to keep hope alive during the creative process. Probability insists that 1) the project will never be finished, 2) if finished, it will take years longer than predicted, and 3) if finished, it will never be used for its intended purpose, publication. Yet writers keep starting novels. Self-deception is a powerful force.

"I eventually learned three lessons.... The first was immediately apparent: I had stumbled onto a distinction between two profoundly different approaches to forecasting, ... the inside view and the outside view. The second lesson was that our initial forecasts ... exhibited a planning fallacy. Our estimates were closer to a best-case scenario than to a realistic assessment. I was slower to accept the third lesson, which I call irrational perseverance: the folly we displayed ... in failing to abandon the project. Facing a choice, we gave up rationality rather than give up the enterprise." Kindle location 4196

Those of us who aren't behavioral psychologists call it lazy thinking. Or knee-jerk decision-making. Kahneman's enlightening book explores the different ways our brains work. Right from the very first pages, he lays out an understandable road map, suggesting that there are two distinct "systems" at play. System One is the more intuitive, emotional thinking process that requires minimal effort. System Two is the more analytical process that requires far more "brain power."
Plowing through this book will require readers to put on their System Two thinking caps. I agree with some reviewers who suggest that the points could have been made more effectively in far fewer pages. But the fact that I incorporated some of Kahneman's research into my college communications course the same week that I started reading the book is a clear indicator of how much I value his concepts. My students enjoyed some of the brain-teasers (my phrase, not Kahneman's) that illustrate how impulsive, lazy thinking can taint our decisions. ( )

Highly entertaining look at behavioural economics. This book helped me think (at least until my "system 2" got tired) about my own cognitive biases and the emotions behind some of my decisions. Mr. Kahneman's work is a tribute to the power of story-telling. Our "System 1", or intuitive brains, construct stories based on past experience. Narratives have become popular in management training on leading change.

I know colleagues without any background in economics or psychology found some of the text difficult, but Mr. Kahneman gives lots of real-life examples that provide insights for everyone. ( )

I'm trying to be more conservative with my 5-star ratings but if anything deserves five it's this.

I've been familiar with the research of Kahneman and his late colleague Amos Tversky for several years now. Their work, while officially psychology, has applications to economics, policy making, and most any field or endeavour requiring humans to make decisions.

The premise is simple: you, as a human being, aren't a rational thinker. Instead, you operate with two "modes" of thought -- which Kahneman labels System 1 and System 2 for the purposes of the book -- analogous to the "fast and slow" of the title. System 1 is evolutionarily older and implicated in rapid judgments. It operates on principles of association and coherence, making decisions by what it knows and what tells a good story. System 2 is newer and practically unique to humans, being the system we use for complex math and decision-making, as well as impulse control. System 2 is what we consider our "self", the rational choice-maker that thinks orderly and logical thoughts.

The only problem is that System 2 is underdeveloped in comparison to System 1. As Kahneman says, System 2 is lazy. Consequently, we tend to accept intuitive judgments with little scrutiny, and even our rationality can, in many instances, become subservient to those powerful causal stories generated by System 1.

Starting from that two-minds premise, Kahneman covers a bewildering array of conditions in which our illusion of rationality falls to pieces. We're bad at statistical thinking, preferring what we know and experience to a more global view. We prefer anecdotes to likelihoods, individuals to categories, and stories to probabilities. We blame irrelevant causes -- or our own talents -- for chance outcomes. We overestimate our odds in bad situations and underestimate probabilities in favorable conditions. We're more averse to loss than motivated by gain, and even those measures of loss and gain are subjective, determined by arbitrary reference points in our surroundings.

Kahneman's conclusion is that we aren't rational decision makers, and it makes little sense to act as if we're homo economicus presented in rational-agent models of economics. We aren't necessarily irrational, but a blend of knee-jerk intuitions -- which aren't reliable in situations requiring probabilistic thinking -- and rationality which must be coaxed out of an evolutionarily conservative body. Contrary to rationality, we weight options differently according to how we feel about them, whether they represent losses or gains, even how the information is presented to us (the framing effect).

These conclusions hold a personal significance for me, as I run across intuitive, anecdotal and self-absorbed thinking in many domains across many areas of my life (not to exclude myself from that charge, as I'm capable of lazy rationality and impulsive decisions as much as anyone; that kind of self-reflection is another positive). Kahneman's examples are largely directed at economists and policy-makers, but the implications of his research have obvious applications to politics, professional disagreements, and even internet arguments.

All in all this is a fascinating, comprehensive, and lay-accessible work that should be required reading for anyone who cares to think about anything ever (or at least realize why the person arguing with you is being so stubborn). ( )