Book Review: Thinking, Fast and Slow by Daniel Kahneman

Quote of the book

“It is only a slight exaggeration to say that happiness is the experience of spending time with people you love and who love you.”

5 key points

  • We have two systems for making decisions: System 1 (automatic system) and System 2 (effortful system).
  • It is easier to recognise other people’s mistakes than our own. Even with decision-makers, we are biased to blame them when good decisions go wrong more so than the credit we give when good decisions go right, when it appears clearer in hindsight.
  • Your level of risk aversion influences the decision you take. If you are risk averse, you will tend to prefer the guaranteed outcome over the potential outcome if both outcomes are positive. If both outcomes are negative, risk seekers take on the gamble and reject the guaranteed outcome.
  • The feeling of being watched, even if it’s a symbolic feeling of being watched rather than actually being watched, encouraged people to adopt better behaviour in an experiment.
  • WYSIATI stands for “what you see is all there is” and is one form of cognitive bias that humans have when making decisions – humans are often irrational in their decisions because of their biases and decision-making shortcuts.

Review

In terms of understanding the world around us and how the human mind works, this is a very comprehensive book that takes you through different models of thinking and perception. It will help you to understand basic psychological theory and how to tap into your own intuition to use it effectively in daily life, such as for making decisions. Although this book is aimed at a general audience, it is a dense read, so it could either be approached as a reference book by selecting particular chapters or as a cover-to-cover book read slowly to digest each concept.

The book is structured such that there is a different theory for each chapter, covering the cognitive constraints, complexities, and biases of humans. The 38 chapters cover a range of psychological concepts such as emotion, risk, prospect theory, frames, intuitive predictions, validity, the law of small numbers, and rare events. There are puzzles, questions, and illusions at the start of each chapter which make it a fun and engaging read – it brings psychology to life as the reader is witnessing the experiment in real life whilst reading along with the book. I think the book could have benefited from having a clear definition at the start of each chapter to introduce the new concept in addition to the puzzle, but the concept becomes clear once the reader has followed along with the puzzles and questions.

A key concept which recurs throughout the concepts presented in the book is that of luck and randomness. Kahneman writes that “we are far too willing to reject the belief that much of what we see in life is random” and that “luck plays a large role in every story of success”. In other words, something small could change and the whole outcome could be different, and indeed less remarkable than it was in actuality. It is easy to see examples of this in our own lives – had we not been in a certain place at a certain time or met someone in particular, our life paths could have looked very different.

Another key recurring concept in the book are the fictitious concepts of System 1 and System 2 ways of thinking and dealing with decisions. System 2 is slow and inefficient, but more deliberative, whilst System 1 is more effective, faster, and intuitive, useful for everyday decisions. System 1 interacts with System 2 by sending signals such as intuition, intentions, and feelings. System 2 then receives these signals, forming actions and beliefs. System 2 may also support System 1 by offering more detail when the decision is difficult. If we are unhappy, then we lose touch with our intuition, and therefore System 1’s efficacy breaks down.

In addition to laying out the concepts of System 1 and 2, Kahneman explains the biases that make human decision-making irrational. For example, humans put more weight on other people’s mistakes than their own. They also feel overconfident in their ability to predict the future (which ,in reality, no one can do – it only falsely feels like it when something happened that was obvious in hindsight such as economic recessions). Many people make decisions based on regret, but people are biased to anticipate more regret then they actually feel post-event. It is useful to read and become cognisant of these biases in everyday life.

Overall, in this book Kahneman has collated his years of research as a Nobel Prize winning Economics Laureate and psychologist. The language of this book is accessible to a general audience, but to get the most out of its contents, it is best to approach the book slowly and in chunks, as it is a content dense book.

Overall rating: ⭐⭐⭐⭐

Get the book | Official website | Goodreads

Published by sharemylibrary

Non-fiction book reviews, summaries, and recommendations

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