Fast Thinking

A couple of weeks ago I read an article which was based on an interview with Professor Daniel Kahneman, Psychologist and winner of the Nobel Prize in Economics in 2002.  Reading the article reminded me of a Horizon documentary I watched a couple of months ago called How You Really Make Decisions which was based on the work of Kahneman, who along with friend a collaborator, the late Amos Tversky, established a basis for common human errors which arise from biases.  At the heart of his work is the idea that when we think we use two systems; fast System 1 which is automatic, effortless and intuitive, and System 2 which comes into operation when we need to stop and think about more complex questions.  The problem is that System 2 is often lazy and will form mental shortcuts to simplify complex questions. The understanding of this led to the establishment of Behavioural Economics, the study of the effects of social, cognitive and emotional factors on the economic decisions of individuals and institutions, which is why Kahneman received the Nobel Prize for Economics rather than Psychology.

In his book, 'Thinking, Fast and Slow' Kahneman states that we are not rational creatures but instinctive ones and the decisions we make are fast and often innaccurate, based on systematic errors which recur predictably in particular circumstances without us being aware.  Therefore if we want to make better decisions, we should be aware of these biases. The good news is that we have the ability to reflect on our biases so that we can minimise their effect and overcome them.  It's important to realise that our beliefs are not always anchored in reason and we should know when to distrust fast thinking and use slow thinking to keep our natural impulse in check.

"It's far easier to identify and label the mistakes of others than to recognise our own"
Professor Daniel Kahneman, Thinking, Fast and Slow (2012)

Further Reading
http://www.standard.co.uk/lifestyle/london-life/the-thought-father-nobel-prizewinning-psychologist-daniel-kahneman-on-luck-9199162.html