Thinking Fast And Slow Highlights

 One of the best books I've read this year is "Thinking Fast and Slow" By Daniel Kahneman the Nobel Prize winning behavioral economist.

The book breaks down the difference between cognition and heuristics to explain why we think the way we do about things.

In essence he argues that there are two systems of thinking:

System 1 is instant and not bound by the rules of logic EX: Driving a car or reciting your #
System 2 is deeper thinking with well supported thought out ideas and arguments. EX: arguing about politics or explaining how to bake a cake.

Here's some quotes and ideas that interested me:

System 1 provides impressions that often turn into your beliefs and is the source of the impulses that often become your choices and actions. It offers a tacit interpretation off what happens to you and around you, linking the present with the recent past and with expectations about the near future. It contains the model of the world that instantly evaluates events as surprising or normal. It is the source of rapid and often precise intuition and it does most of this without your conscious awareness of it's activities.

The sequence of characteristics we observe in a person are often determined by chance. Sequence matters however because the halo effect increases the weight of first impressions sometimes to the point that subsequent information is mostly wasted.

WYSIATI- What you see is all there is. One of the ways System 1 distorts reality to make us feel correct.

Overconfidence: as the WYSIATI rule implies neither the quantity nor the quality of evidence counts much for subjective confidence. The confidence that individuals have in their beliefs depends mostly on the quality of story they can tell themselves about what they see, even if they see a little. We often fail to allow for the possibility that evidence that should be critical to our judgement is missing- what we see is all there is.

An example of basic assessment is the ability to distinguish friend from foe. This contributes to our chances of survival in the wild.  Alex Todarov of Princeton has explored the biological roots of rapid judgement of how safe it is to interact with a stranger. He showed that we are hardwired to look for two facts about that person: How dominant they are and how trustworthy they are.

Substituting questions. If a satisfactory answer is not found quickly system 1 will find a related question that is easier and answer that instead. The target question is the assessment you intended to produce. The heuristic question is a simpler question you answered instead.

Anchoring Effects- This happens when you are given a # or idea to prime you before being asked a question. For example if you are asked if Gandhi was more than 114 years old when he died you will guess a higher age than if you are asked if he were older than 35. The same thing happens with asking prices of homes etc...

Availability- This refers to how people's impressions are altered by a requirement to list a specific number of instances. In the experiment they asked people to list 6-12 instances in which they behaved assertively and then evaluate how assertive they were. People who had just listed 12 instances rated themselves as less assertive than those who had listed 6. Furthermore participants that had ben asked to think of 12 examples of times they had not behaved assertively ended up thinking of themselves as very assertive. If you cannot easily come up with 12 examples of meek behavior you are likely to conclude you are not meek at all.

Subjective confidence in a judgement is not a reasoned evaluation of the probability that this judgement is correct. Confidence is a feeling which reflects the coherence of the information and the cognitive ease of processing. It is wise to take admissions of uncertainty seriously but declarations of high confidence mainly tell you that an individual has constructed a coherent story in his mind, not that the story is true.

We are confident when the story we tell ourselves comes easily to mind with no contradiction and no competing scenario.

Low probability events are much more heavily weighted when they are described in terms of relative frequency 1 in 100,000 children will die than in percentages 0.0001

Attention is key. Our emotional state is largely determined by what we attend to, our current activity and environment

Affective forecasting- knowing the odds but believing they don't apply to you. Like couples who know most marriages end in divorce on their wedding day but do it anyway believing they are different.

Miswanting- bad choices that arise from errors of affective forecasting. Most prominent when people are asked how happy they would be after a tragedy followed by comparing that with happiness ratings of people who have had misfortunes.

There's a bunch of really interesting stuff in the book and I highly recommend you pick it up if you want to understand why we all make the choices we make.

JS