Thinking Fast and Slow is the best book I have read in 2018 so far. It might also be the only book I have held on for the longest. I first stared reading Thinking Fast and Slow in 2015 in my Amazon Kindle, soon to realize that I need a hardcopy to progress through this dense book on human rationality and irrationality.
The book is not just a theoretical piece on behavioral economics, but one full of exercises and thought experiments, which exposes the readers themselves to the flaws in their conventional thinking before the author attempts to explain those cognitive biases from a scientific perspective. And I believe that’s exactly what made the book an international best seller.
Being a student of cognitive science, I had already been formally introduced to most of the biases discussed in the book, through the psychology lectures I had attended. However, the book was a great refresher and has helped me to look at those biases through the lenses of a behavioral economist. I should admit that I have had a few ‘Aha’ moments as well. If you are a complete newbie to cognitive psychology or behavioral economics, I assure you, the book will present you with much more ‘Aha’ moments than I had.
The book starts by proposing that we have two modes of thinking: a fast one, which the author calls system 1 and a slow one, which he calls system 2.
System 1 is in charge when you are doing things that doesn’t require much mental effort like keeping track of the route to your home while talking with friends or day dreaming and walking, whereas system 2 kicks in when you are doing mentally tiring things like doing complex calculations or driving through heavy traffic. System 2 thinking draws up so much of energy from your body that you can visually identify if someone is using their system 1 or system 2 by closely watching their pupils dilate or monitoring their heart rate from their skin tone through a high speed camera.
One of the ideas that gave me an ‘Aha’ moment was the concept of ego-depletion: the idea that you can have only so much of mental reserve, which gets used up each time you make a hard decision. This is the reason why it is very hard to stick onto a new healthy-diet and workout routine after a tiring day at work. This taught me the importance of reserving the ‘hard-choices’ only to tasks that are really important than putting too much control on every task. The author also suggests that you can refill your mental-reservoir by treating yourself with foods rich in glucose.
One of the other biases to which we often fall for are the ‘Priming effects’. I think the below video is the best illustration on priming effect.
Two areas that heavily rely on priming effects are advertisement industry and product placing.
Towards the second half of the book the Dr. Kahneman heavily criticizes authors of the book like Built to Last in their attempt to make formulas for success through systematic analysis of successful corporations, because he says, such acclaimed experts as well as the public often underestimate the importance of luck and overestimate the importance of strategy and talent. He further strengthens his argument by quoting confirmation bias and narrative fallacy – biases that forces us to make sense of a chaotic world.
One of the cognitive bias concepts that gave me retrospective moments were ‘Planning Fallacy’ – our tendency to overestimate our achievement/chances of success relating to a project and the tendency to underestimate the time required for the project in planning phase. I must say, this must have been the pitfall I most fell into, in the days of my graduate studies.
These are only a few among the best ideas discussed in the book and I urge you to read the book to be a good decision maker and be informed of the possible cognitive traps that others might exploit you of; after all it’s written by one of the world’s leading cognitive psychologist and the Nobel laureate for economics in 2002.