8 of 8 people found the following review helpful
on 25 August 2014
Daniel Kahneman is a behavioural economist. He’s spent decades studying the effects of social, cognitive and emotional factors on the decisions we make – economic and otherwise. In Thinking, Fast and Slow, he shares some of the insights of his work in decision science: to stimulate, as he says, “watercooler conversations”, so that we can better understand the systemic errors of judgement that humans are prone to.
Kahneman explains his findings by invoking the fiction of two ‘systems’. System 1 is intuitive, associative and fast; System 2 is rational, logical, slow and lazy. System 1 prefers plausibility to probability; it craves coherent meaning and will do everything it takes to construct it from any scrap of information. It cannot deal with statistics; it prefers causal explanations every time. It hates doubt. System 2 does its best to understand the truth in all its fullness; but it can only work with what System 1 gives it, and it’s lazy: without conscious attention and effort, System 2 will simply ratify the decisions of System 1.
As so often with discussions based on experimental social science, I found myself mildly irritated that experiments seemed merely to confirm what most of us know by experience already. But that, of course, is precisely Kahneman’s point: experience is not an infallible guide to truth. The illusion that we understand the past fosters overconfidence in our ability to predict the future.
“Everything,” he says, “makes sense in hindsight.”
The penny, for me, dropped with a resounding crash in Chapter 20. At one point, Kahneman and his colleague, Amos Tversky, worked with a group of investment advisers, looking for evidence of skill in their ability to predict movements in stock prices.
They found none. The results of every single adviser, over time, were no better than blind betting.
The conclusion, for me, is inescapable: the livelihoods and self-esteem of thousands of financial professionals depend entirely on their rhetorical skills.
Kahneman delivers over 400 pages of material showing how incapable we are of understanding statistics, how brilliant we are at ignoring our ignorance, how we regularly substitute easy questions for hard ones in decision-making, and other cognitive biases. This book is fast becoming a central reference in the growing conversation about rationalism and intuition. (Check out Ted Cadsby's "Closing the Mind Gap", Guy Claxton's "The Waywrd Mind", and my own "How to Solve Almost Any Problem".)
Getting through the book can be hard work, not least because Kahneman's pessimism can get wearing. My biggest concern is that he seems to ignore one aspect of System 1 that has been highly successful in driving human progress.
Look in the index, and you will find no entry for 'imagination'.
A longer version of this review appears at:
178 of 188 people found the following review helpful
This book summarises the latest psychological research on human judgement, in particular how we think irrationally, jump to conclusions and fall prey to failures of intuition.
To give you a feel, here is an example from chapter 17. Have a look at this statement and see if you can guess why it might be true:
"Highly intelligent women tend to marry men who are less intelligent than they are"
Did you find a nice explanation? The book will show you why no explanation is necessary. It is a statistical necessity. It will also explain why it is very difficult to avoid believing spurious explanations and how pervasive and dangerous they can be.
That is just one tiny example. The book is absolutely packed with fascinating and thought provoking discussion of a wide range of similar topics. It is almost a must-read for anyone interested in human judgement or broader questions about how the mind works and one of very few books I keep on a special shelf for reading again.
There were a few things that niggled with me. I will mention these but please don't be put off. Even with the niggles it is an intelligent and valuable book.
The writing is clear and easy to understand. However it is a bit repetitive. After I got a feel for where the repetition was coming I often found myself skipping or skimming half a paragraph. Comparing this with Predictably Irrational by Dan Ariely, a book covering similar ground, Ariely's book gets its points across in a much punchier way and presents a similar amount of material in (I guess) half as many words.
The author gives other researchers credit where it is due but when talking about his own work I feel he overdoes his self-publicity. I have read plenty of books by acclaimed scientists and they don't boast about how good their work as much as Kahneman does. Some people may not mind this, or may not even notice it. Maybe I am being too sensitive but I did find it irritating so I think it is fair to mention it.
One final, very small, niggle. The book often uses names for psychological findings - the endowment effect, the halo effect, loss aversion, and many others. Usually these are widely accepted terms. However, Kahneman insists on coining a few of his own that are not accepted terms. The most notable, where he names different types of thinking "System 1" and "System 2", is central to the book and, although he gives a reasonable justification for it, it gave me a slight feeling of quackery which is a shame as this is an extremely intelligent book and not quackery at all. Someone has since pointed out to me that the terms System 1 and System 2 may become mainstream in which case I owe Kahnemann an apology and happily give it to him.
Because of the niggles, I started by giving the book 4 stars, but on reflection, it is so full of wise discussion and useful advice, I realized I was being churlish and gave it the extra star.
If you are interested in the subject I would strongly recommend reading both this and Predictably Irrational. Neither the style nor the material is the same. If you only want to read one book, or are new to the subject, you might prefer Predictably Irrational as it is more fun to read, and its ideas will grab you more quickly. I read Predictably Irrational in a couple of sittings but Fast and Slow Thinking took me 3 weeks as it is 400 pages of small print and I usually felt tired after reading 1-2 chapters. On the other hand, Thinking Fast and Slow will thoroughly reward the greater investment of effort. Another excellent book which predates this by 14 years is Hare Brain Tortoise Mind by Guy Claxton. This has a different take on the subject and, unfortunately, does not seem to be acknowledged anywhere.
374 of 416 people found the following review helpful
You are at the cinema watching the latest film. Fifteen minutes before the end, the projector explodes and the screening is terminated prematurely. You feel that the experience was ruined. However, Daniel Kahneman knows better - he asserts that you are mistaken! Your own mind has deceived you. A combination of `duration neglect' and the `peak end rule' is responsible. You have difficulties distinguishing your memories from your experiences. He claims you found the experience blissful (despite having missed the end), no matter what you believe.
This is an example of one of the rather silly assertions which can be found towards the end of this 418 page book. There are quite a few equally foolish theories throughout the last 200 pages.
This is a book of two halves. The first half is absolutely inspirational. The writing style here is excellent. In order to illustrate his points, the author provides many exercises for the reader to perform. In doing these you conduct little experiments on your own brain, which will astonish you time and again by the obvious errors and self deceptions it keeps making. By page 200 I was feeling this was one of the very best books I have ever read. The material shows beyond doubt that the mind of the human is full of flaws, biases and delusions.
And then comes the second half. The writing becomes more turgid, the little exercises stop coming, and the lessons become more and more flaky, culminating in the example I give at the beginning. What went wrong?
Mr Kahneman points out that the human brain is biased towards finding coherence where there is none, and that we are susceptible to a frightening level of overconfidence. No where is this better illustrated than in the second half of his own book. Having found many instances of irrational thinking, particularly where statistics are concerned, Mr Kahneman seems to become obsessed with irrationality, and seeks to find the same pattern in all aspects of human behaviour. He becomes more and more overconfident with the tidy and coherent story he has constructed, and produces some spectacularly silly theories as a result.
I would give the second half of the book barely one star. But read it for the first 200 pages, which fully deserve five stars!
189 of 212 people found the following review helpful
Daniel Kahneman has produced an excellent book. He continues to build and expand on the famous paper he and Amos Tversky published in 1974 ("Judging Under Uncertainty", a copy of which is usefully appended to this book) and has since spawned innumerable books on the theme (eg Wray Herbert's "On Second Thought"), and even related themes like Nassim Taleb's "Black Swan". "Thinking Fast and Slow" is not a textbook; it is intended for the layman who wants to have a clear and deep understanding of man's cognitive functions. Most of Kahneman's studies will amaze readers not familiar with this subject. For example, when tested, it is still remarkable that the clinical judgments of trained professionals are less accurate than statistical predictions based on a few scores or ratings. Hence counsellors who interviewed students were less accurate in their predictions on the students' performance than statistical predictions using only a few denominators such as High School grades and aptitude test results. The reason Kahneman, a psychologist, was awarded the Nobel Prize in economics was that his (and Tversky's) thesis was applied by economists to understand why economic and financial predictions so often go wildly wrong when they were (or so it was believed) so carefully and rationally made.
This review also hopes to point readers to a book I read as a student in 1967. It's called "Straight and Crooked Thinking" by R H Thouless. That book has so many similar points and Thouless was a teaching psychologist from Cambridge University in the UK. Although Thouless' book concerns flaws in the use of language and logic in thinking, it also discusses the effect of hidden bias and prejudice. Straight and Crooked Thinking has just been published in the 5th edition by R H Thouless' grandson, C R Thouless. The first was published in 1930. Kahneman's book will likely be as long lived.
4 of 4 people found the following review helpful
on 2 February 2014
Psychology, economics, policy making are all in this book, and none of it is written in an alienating manner. Very clear cut explanation of concepts. I particularly like that every chapter ends with some conversation points which tell you how to discuss what you just learned. I would recommend this book to anyone.
23 of 26 people found the following review helpful
Other reviews here more than cover the content of this book but I want to review it anyway, mainly to offer a cautionary tale about not judging a book on the basis of disliking... other books. Because I was initially highly wary about this book, mistaking it for one of these pop science/social psychology-types which have become so successful in the last decade. I'm talking about books like Nudge or the Freakonomics series or those by Malcolm Gladwell (e.g. Blink), Nassim Nicholas Taleb (e.g. The Black Swan), Tim Harford (as the Undercover Economist) etc... all very loosely akin insofar as, despite having substantive statistical contents, they apply their own (seemingly dry discipline) to everyday situations and offer quirky `behaviouralist' ways of understanding the world. They seem to have arrived at a shared formula for making maths palatable to the general reader. Indeed their readability has led to their adoption by corporate culture and a rather odd state of affairs whereby `economics' books have become airport reading. Not a problem itself but in order to make the technical accessible, many of these authors have traded off scientific rigour in favour of readability. In sacrificing the maths, a certain degree of imprecision has been accepted as OK (see for example the lamentable (non)coverage of regression analysis in Freakonomics). Whereas I don't think it's OK. So I pretty much wrote-off `Thinking, Fast and Slow' when I saw the endorsements by Levitt (Freakonomics), Thaler (Nudge) et al on the cover. But I was wrong to do so. First, Kahneman knows his apples. Unlike Gladwell, he's won the Nobel Prize (in economics, despite being a psychologist). Second, much like Leonard Mlodinow (see `The Drunkard's Walk' for a stats equiv.), Kahmenn is a translator of behavioural economics into English but he doesn't jettison scientific rigour in so doing. He trusts the reader's intellect sufficiently to actually show you the correlation coefficients AND spin a good yarn. The chapters here all are short, beautifully clearly written, and none requires any special learning... but some are borderline taxing. But rather than detracting from the experience, my thinking is that this makes for greater intellectual satisfaction for the reader.
9 of 10 people found the following review helpful
on 3 July 2012
This is an extraordinary book. When you are recommended a book written by a nobel prize winner your heart either soars with expectation or sinks with anticipated disappointment. The book doesn't disappoint in the
depth of the content - but the lucidity of the exposition is a joy to read. Kanneman uses the metaphor of two systems in one brain to explain the difference between humans and the kind of people economists use as models of people and also the difference between the person in the moment - experiencing self - and the person who looks back on an experience - the remembering self. The book is utterly captivating but moreover is utterly convincing. This is probably the best behavioural economics/psychology book I have read and there are some very good ones about. If you only end up reading one economics book in your life then this is surely it.
8 of 9 people found the following review helpful
I think I am beginning to bore my friends, family and co-workers with the number of times I begin a sentence: "Actually, I read something fascinating the other day, in a book called Thinking, Fast and Slow ..." but it is impossible not to after reading this book. It is filled with brilliant insights into the way we think and behave, and why that is usually not entirely rational, even when we think it is.
Apart from being an engaging and interesting read it is filled with little insights that will help you think more clearly an spot the flaws in a plan that others might have missed. Of course, that might not make you very popular at work, but at least you'll be able to back up your argument about whey everyone else is wrong by quoting a Nobel Laureate.
If you like Dan Ariely's work you must read this - Kahneman is where it all began. The book is slightly denser than Ariely but not in any way a hard read and he is an engaging author and very generous with his praise of other writers and thinkers. Peppered with memorable stories and case studies - my favourite is the one about the study of a parole board that showed that overall the chance of being granted payroll was 35% but if your case came up just after the Board had eaten that went up to 60% but if it was just before they broke for lunch it was 0%. The impact of blood-sugar levels on the brain - when its energised it can think and weigh evidence, when it's depleted it reverts to the easiest option, which in a parole decision is "no" because its the safest one. But then, as he shows later, the fact that the brain is able to weigh evidence and make seeming sound decision doesn't mean that it will be the right decision because there are all sorts of things the we either ignore or give undue weight to - think about the way that we all know that the "base line" chance of any new business surviving is about 1 in 5 but we'er all convinced that our new idea will be the 1 in five.
I could go on about this book - I frequently do. In short - read it - it is the is the most genuinely brilliant book I've read in years.
1 of 1 people found the following review helpful
on 17 April 2013
This is an entire book that reminds you of the IQ tests that you had to take at school or to get a job, but this time designed to show you that the author is cleverer than you and that most of mankind is a bit deluded or thick. Even well-informed professional judgement is often outperformed by statistical algorithms - on issues such as the longevity of cancer patients, or the suitability of foster parents. 'Computer says no' may have a point after all. The objectivity of the simple five-variable Apgar test has saved the lives of 'hundreds of thousands of infants'.
The author asks us to be logical, and reminds us what that means and how even statistics students are not that rational and do not think through their assumptions in sequence to form reasoned conclusions.
It is full of the results of psychological experiments, and examples of `trick' questions that you can annoy people with at dinner parties. Everyone thinks the nerd should be a computer science undergraduate - of course he is more likely to be on a business studies course that has more students. Duh! Linda is more likely to be a bank teller than a feminist bank teller because one is a subset of another in a Venn diagram - don't get that wrong just because you think that the way I have described her she must be a feminist.
At times he struggles to make this relevant to our real world experience, to challenge our assumptions. I certainly do not agree with the so-called majority that thought that if Jen lived 60 years happily she didn't experience more happiness than if she lived 30 years happily; or who thought that if she lived a bit longer but was a bit less happy in her final years, this somehow cancelled out her previous happiness. Nor do I quite buy the idea that most people value their memories of a holiday more than their actual experience of it at the time - I am with the people that don't want to struggle through the jungle and up the mountain to take the photograph of their triumph at the top.
But maybe this will be the book for you - making you think rationally about the risks of your pet project where you risk your all for success; even though normally you would go for the dead cert proposition - the bird in the hand rather than two in the bush. Maybe you need to be reminded how past performance is not a guide to the future. Maybe you need to be reminded that the expert is not always right. This may be the book for you. Maybe you will enjoy dipping into it as I did. I may leave it beside the loo.
1 of 1 people found the following review helpful
There is so much information in this book that it is difficult to know where to start with a review and I think it really needs reading more than once to absorb all the information contained in it. The book examines the way we think and divides that thinking initially into two systems - System 1 and System 2. System 1 is what we use when we give an answer to a question `off the top of our heads' or sum up a situation without really thinking about it. System 2 is what we use when something needs more concentrated thinking and effort.
But that is not the end of it. System 1 is not always right and can be over-ridden by the greater effort made by System 2 bit we don't always like to contradict our own first impressions. The book covers all sorts of scenarios where our brains and judgement do not always serve us well and do not make the best decisions for our wellbeing. Human beings are notoriously fallible when it comes to making choices especially when it comes to a choice between a gain and a loss. Even experts don't always make the right decision and may be unable or unwilling to admit they have got something wrong.
The human brain can be fooled by more than just optical illusions and we are not ever keen on questioning our own judgements. The book looks at how we assess risk and reveals we are unduly influences by irrelevancies and by our own biases. We are very bad at assessing the probability of an unlikely event happening. I finished reading this book feeling that I should question every single decision I make! But it is not all doom and gloom and if you are aware of the ways in which your brain may fool or confuse you then it may be possible to eliminate at least some of the errors human beings are prone to make.
There are copious notes on all the chapters, which contain details of further reading for those interested in following up any of the aspects of thinking which are covered in the book. There is also an index. If you want a comprehensive book about thinking then try this one but be prepared to put in some hard work to get the best out of it.