EPC Book Review: May 2019

Title:

Thinking Fast and Slow 

Author(s):

By Daniel Kahneman (May, 2012)

 

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Thinking Fast and Slow: A book on behavioural psychology and decision making by Daniel Kahneman, the winner of the Nobel Memorial Prize in Economic Sciences.

Based on years of research by Kahneman, this book contains some profound concepts around how people make decisions. While there are many ways to describe and categorise the different decision biases we carry, he introduces an easy-to-understand abstraction to our thought processes, which he classifies as System 1 (Fast thoughts) and System 2 (Slow thoughts).

System 1 (based on intuitions and instincts):

This is intuitive, 'gut reaction' way of thinking and making decisions. It is autonomous and efficient, requiring little energy or attention.  But it is prone to biases and systemic errors and is often the reason why we jump to conclusions.

System 2 (based on rational thinking):

This is the analytical, “critical thinking” way of making decisions. It requires energy and can’t work without attention but, once engaged, it filters the instincts of System 1.

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Image source: How to Increase Your Brain Power and Improve the Quality of Outputs You Produce


Top 3 takeaways from the book:

1. Although both system 1 and system 2 are active when we are awake, the majority of the time we use system 1 thinking to make quick decisions as the brain is mostly in the energy saving mode. System 1 continually generates suggestions for system 2 based on intuition, impressions and intentions.  If endorsed by system 2, you believe your intuition and act on your desires.

Most of the time system 2 adopts the suggestions of system 1 with little or no modification. However, what is critical to understand is that although most of our less-good decision-making originates from system 1 thinking, it is also the source of what we do right most of the time - which is most of what we do.

2. Kahneman suggests that we jump to conclusions or form opinions based on limited information. This explains why sometimes people form beliefs on a few data points and insufficient evidence. If you personally observe one incident, you are more likely to generalise this occurrence to the whole population.

If presented with data, our mind tends to focus on the part of the data which confirms our existing perspective (confirmation bias) - This is because our brain develops a coherent story around what we want to believe.

To add to the complexity, the same data framed differently can also evoke a different reaction; for years marketers have “framed” statistics and statements to persuade and achieve desired output from consumers.

Remember: 10% fat, and 90% fat fee is the same, but we prefer the latter.

3. This brings us on the third take away point.  System 1 thinking is generally accurate, but is often laced with biases and emotions which can lead to wrong judgements. Sometimes we might feel like we are conducting a critical analysis when making a strategic decision, but often we are reliant on the bias-affected memories and expectations that System 1 serves up for us. Being aware of our personal biases can help you make mindful and unbiased decisions while helping to “police” our decision-making process.


Ending thoughts:

As resilience leaders, we are tasked to make critical decisions every day in this “Volatile, Uncertain, Complex and Ambiguous” world. But rarely do we stop and think if our decision-making process is still accurate and fully optimised, not to mention if it's riddled with personal biases.

There is much wisdom packed in the 467 pages of Thinking Fast and Slow on how the coordinated functions of two contrasting systems (System 1 and System 2) make the human brain and mind uniquely powerful. Most books about behavioural psychology and decision making emphasise the failings of system 1 intuition, creating an impression of vast human irrationality. One of the strengths of the book is that the author combines both the positive and negative aspects of intuition into one coherent story.

Although the book doesn't go into depth about how and when to use System 1 and System 2, it does help build self-awareness so we can be more mindful of our judgments and decision making.


Top Quote from the book:

“If there is time to reflect, slowing down is likely to be a good idea.” — Daniel Kahneman


Our Comment:

This is a very lucid, sharp and economical resume of Daniel Kahneman’s book.  I am almost tempted to suggest that you don’t really have to read the whole thing now.  But I wouldn’t say that would I?

Why did we put it up for review?  Well, a psychologist colleague of mine once said that “when Kahneman speaks, the profession tends to listen”.  


Reviewed By:

 

Mohsin A Shafiq BA, MA

Business Support Executive, Emergency Planning College

Date of Review: May 2019
Buy on Amazon: Thinking Fast and Slow