Just completed a proper read of the book by Daniel Kahneman titled “Thinking Fast and Slow“. This was published in 2011 and have been looking for an opportunity to finish reading it. I also took the opportunity of finishing a book by Dan Ariely “Predictably Irrational” in tandem. I would agree with a reviewer in Amazon: Ariely is a light read compared to Kahneman. Ariely references 7 papers by Kahneman while the latter says he ‘cringes’ when his work is used in support a claim for irrational humans in his only citation of Ariely.
I have been exposed to the work of Kahneman (on prospect theory) well before he became a poster-boy for behavioural economics, following his Nobel prize. For years I recommended his acceptance lecture to graduate students as the best review of the psychology of human behaviour.
Kahneman’s book is an end of career overview and reads like a Festschrift written by the person to be honoured. There is a review of most areas of psychology on human behaviour, with only a third of the book directly citing the work of Kahneman and his co-authors. The beauty of this approach is that we have an overview of how very diverse areas tie in to his main thesis. Human beings unlike Econs (the theoretical beings occupying economic rational theory) are neither rational, irrational or truly intuitive. They make multiple errors in their computation of options available to them. Among others these are associated to framing, priming, halo, anchors, availability, cognitive burden and substitution. And these are the ones I can randomly recall biased by my interest in exceptional agency and political processes. His core thesis is that humans process most information through a low cognitive effort process, relying on pattern recognition. They make sense of unknown patterns by taking shortcuts. Cognitive processes with high cognitive burden are less common and are deployed when circumstances require. Hence the title for thinking fast and slow.
I have many pages of notes and comments on the margin of this book. And more than half a dozen citations I intend to follow up. Examples to give a flavour:
Voters seem to follow a judgement heuristic particularly when uninformed about politics where they substitute the question of a politician’s actual competence with an assessment of how they look. The is worse among less well educated voters with evidence that the use of “fast” thinking on making voting decisions is not uniform among voters (p.91).
The use of the affect heuristic (where we substitute a difficult question for an easy one) is prominent in the deployment of expertise. The mechanism through which biases flow into politics is termed the availability cascade, “the importance of an idea [in media and politics] is often judged by the fluency (and emotional charge) with which that idea comes to mind“’ (p.142). So, if it is available (i.e. dominant in the media stream) it becomes true.
Loss aversion (our propensity to value losses higher than gains) means that potential losers from a new regulation or legislation are more active and determined than potential winners (p.305).
This book has sparked a numbed of ideas and caused me to consider a number of my current research projects employing experiments and considering decision processes in human agents.
I have also been thinking about the implications of research on the flow between the two cognitive processes and how it can be employed on effective teaching practice, but will dedicate a separate post to this.
On the down-side, there is no mention here of social networks, collective decisions, influence by social environment or a proper development of decision biases among collective agents like organisations. There is a blind spot as far as the “tragedy of the commons” is concerned and an uncritical acceptance of neo-liberal claims on human agency. A lightly developed account of probability and Bayesian inferential logic leave readers requiring elucidation to a number of key points. But these can be seen not as faults but as limitations in scope.
In short I strongly recommend this for those working in the behavioural sciences and interested in the biases of individual agents. Yet, as Kahneman admits, foreknowledge does not seem to help with adjusting our behaviour. We are likely to still be duped by insurance salesmen or estate agents employing substitution or framing selling techniques. Understanding how a number of these processes work can potentially help us engage slow thinking when making significant decisions.