Summary | Thinking, Fast and Slow (2011)

What is it about? Thinking, Fast and Slow is Nobel prize winner Daniel Kahneman's best-selling book. In the book, Dr. Khaneman describes that people's thought systems operate in two different manners: 

• Fast - is impulsive and intuitive that is primarily based on emotional perceptions. 
• Slow - is conscious and thoughtful, mainly based on logical and deliberative reasonings. 

The theory explains the importance of developing a decision-making process to void irrational choices, biases, or attention-narrowing effects.

Why bother?  The Nobel prize-winning theory forms behavior science's foundation (formerly behavior economics). The related researches have won several Noble prizes, including: 

• 2012 Daniel Kahneman - Book: Thinking, Fast and Slow (2011)  
• 2013 Rober J. Shiller - Book: Irrational Exuberance (2000)
• 2017 Richard Thaler - Book Nudge: Improving Decisions About Health, Wealth, and Happiness (2009),  known for "Mental Accounting." 

The recommendation to read the book after reading this summary is 5 out of 5.

Key Ideas  Kahneman says although we often think we make rational decisions, we instead decide most of the time with fast and "lazy" considerations. The thought process is the so-called fast thinking that can cause many irrational biases such as: 

• Priming Effect - means the exposure to other stimuli influences the decisions. 
• Availability Heuristic - means we rely on immediately available information or examples. 
• Recency Effect - means we rely on more recent data for judgment. 
• Halo Effect - means the initial impressions on people influence the perception. 
• Anchoring Effect - means we heavily depend on the first piece of information. 
• Endowment Effect - means we overvalue things that we already own.
• Framing Effect - means how information is presented matters. 
• Duration Neglect and Peak-End Rule - we overemphasize what occurs at the end of an event.

The theory explains the importance of creating a decision-making process to void irrational choices, biases, or attention-narrowing effects. For example, we can analyze if the decision went wrong and intentionally listen to opposite opinions or criticisms. 

On the other hand, knowing the existence of fast thinking helps us consider the attention-narrowing effects (caused by the visceral factors) [1] and the D-K effect (Dunning-Kruger) when we expect others to make decisions. ​​​​ " Visceral factors are states such as hunger, thirst, sexual desire, drug cravings, physical pain, and fervent emotion that influence how much goods and actions are valued. "(iResearchNet) ​. "Dunning–Kruger effect is a cognitive bias in which people mistakenly assess their cognitive ability as greater than it is." ​(Wikipedia)

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Favorite Quotes 

“If you care about being thought credible and intelligent, do not use complex language where simpler language will do.” 
― Daniel Kahneman, Thinking, Fast and Slow

References 

• George Loewenstein, Out of Control: Visceral Influences on Behavior, 1996