Thinking Fast and Slow

Author:Daniel Kahneman

Rating:*****

ReadingCompleted:true

Central theme in the book is the difference between two systems:

• System 1 operates automatically and quickly, with little or no effort and no sense of voluntary control.
• System 2 allocates attention to the effortful mental activities that demand it, including complex computations. The operations of System 2 are often associated with the subjective experience of agency, choice, and concentration.

The effects of Priming is discussed. Priming can influence decisions in major ways.

Decisions are also influence in a major way by how easy examples come to mind, e.g. Cognitive ease, and its range is between “Easy” and “Strained.” Examples that come 'easy' to mind, have a stronger influence on our decisions.

Our minds have an habit to jump to conclusions based on System 1. Here are the most important ones:

• Confirmation Bias, we like to agree with people & statements presented to us
• Halo effect, we have a tendency to create a consistent overall impression of a person, company, brand, or product.
• WYSIATI, What You See Is All There is...: when presented a decision based on a limitted information set, System 1 is tempted to decide rather than to elaborate.

• • "She knows nothing about this person’s management skills. All she is going by is the halo effect from a good presentation."
  • “Let’s decorrelate errors by obtaining separate judgments on the issue before any discussion. We will get more information from ** independent assessments.”
  • “They made that big decision on the basis of a good report from one consultant. WYSIATI—what you see is all there is. They did not seem to realize how little information they had.”
  • “They didn’t want more information that might spoil their story. WYSIATI"

When faced with a too difficult question, we used Substituting Questions, e.g. we replace a complex question with a simpler one we can answer. We use the Affect Heuristic and overweight advantages and positive traits of people or projects we like.

• “Do we still remember the question we are trying to answer? Or have we substituted an easier one?”
• The question we face is whether this candidate can succeed. The question we seem to answer is whether she interviews well. Let’s not substitute.”
• “He likes the project, so he thinks its costs are low and its benefits are high. Nice example of the affect heuristic.”