Thinking Fast And Slow, by Daniel Kahneman, is an in-depth examination of how the human brain functions in the act of decision making, using the author’s prospect theory.
Summary Of The Book
In Thinking Fast And Slow, readers will have the opportunity to delve deep into how the brain functions and makes decisions.
Kahneman developed the prospect theory which states that people make decisions based on how much they stand to lose or gain, and not on the final result. This was a groundbreaking theory in behavioral economics as it directly challenged the long standing utility theory.
Thinking Fast And Slow begins with Kahneman stating that the brain generates thoughts in two ways, System 1 and System 2. The first system started automatically, was used frequently and subconsciously, and was emotional. System 2 on the other hand, operated slowly, consciously, and rationally. Kahneman maintained that most people like to assume that they are governed by the second system, which is not the case. It is System 1 that is the dominant force, which makes the big decisions, and influences thoughts and judgements. It is only by understanding both systems that people will comprehend why they do what they do.
In the following section, titled Heuristics and Biases, the author offers explanations as to why people have a difficult time with thinking statistically. Kahneman states that by thinking heuristically, people tend to think of similar cases to the situation at hand, rather than new ways of resolving the matter. He mentions several biases such as anchoring, availability, substitution, framing, and sunk-cost, which impact people’s way of thinking.
In the section titled Choices, Kahneman offers suggestions as to how readers can avoid many of the shortcomings of System 1. In the final chapter, titled Happiness and Rationality, Kahneman suggests that conceptual biases exist in human thought because it is adaptive, and leads to happiness, which is preferred by our thinking process.
Thinking Fast And Slow won the L. A. Times Book Prize in 2011.
About Daniel Kahneman
Daniel Kahneman is an author, and psychologist, whose research interests focus on judgment, decision making, and behavioral economics. He has also authored Choices, Values And Frames, International Differences In Well-Being, and Well-Being: Foundations in Hedonic Psychology.
He was born in 1934 in Tel Aviv. Kahneman holds a BSc degree from Hebrew University of Jerusalem and completed his doctorate in Psychology from the University of California, Berkeley. In 2002, he received the Nobel Memorial Prize in Economic Sciences for his work on Prospect Theory. He is currently a Professor Emeritus in the Department of Psychology, at Princeton University. Kahneman is married to Anne Treisman, who is a psychology professor at Princeton University.
A brilliant book by a brilliant mind.
27 Feb, 2013
reat it fast and slow
11 Apr, 2012
5.0 out of 5 stars...... A brilliant book by a brilliant mind
22 Dec, 2011
Catchy title..compels to start reading..then there is no ending..
26 Dec, 2011
17 Dec, 2012
Every page is an eye-opener
13 Jan, 2014
One of the most fascinating books i have read after Bhagwat Gita & A Brief History of Time.
31 Jan, 2014
An absolute thriller
18 May, 2012
A nice peek in our cognition and thinking
7 Mar, 2012
Absolute Delight - Pathetic WS RETAIL
31 Jul, 2013