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Book Review: Thinking, Fast and Slow (Daniel Kahneman)

In our daily lifes we are subject to countless fallacies and biases which inevitably lead to wrong decisions and judgments.
This book condenses decades of psychological findings into a guide on how to recognize and overcome them!

The book in three sentences

  1. In simplified terms, the human mind works within two system: The intuitive, fast and mainly subconscious System 1, and the logical and slower System 2 with which we associate our identity.
  2. Even though usually quite accurate, there are numerous fundamental biases and fallacies which System 1 is subject to regularly.
  3. By developing the right way to think, recognize and speak about these failures of System 1, we can reduce the likelihood of committing these misjudgements and irrationalities ourselves.

How I stumbled upon it

As usual, awesome books are recommended by awesome people. This time it was one of my best friends who’s studying psychology in the Netherlands at the moment.

As she’s easily one of the most literate people I know and she surely has to know what she’s talking about with her psychological background, I had to give it a try.

Due to the decision making and thinking process being an essential part of basically everyone’s life and all of the author’s claims being backed up with decades of scientific research (something that is rare to encounter when it comes to the self-improvement genre), the book immediately had me hooked!

It’s probably also noteworthy that the author, Daniel Kahneman, won the Nobel Prize in Economic Sciences for one of the findings which are presented in the book. It’s safe to say, that it is easily one of the most influential books in behavioral psychology.

Who should read it

Basically, anyone who has to make difficult decisions and judgements on a daily basis (which as I stated before is all of us). After years of experience in our job or life we tend to overestimate our proficiency in decision-making. The book shows you how to avoid or recognize fundamental errors in others and yourself.

People with a scientific background. As I know from my own experience with experimenting, it’s easy to jump to conclusions too quickly and trying to find patterns in your data, which are not really existent. Kahneman teaches you when you should avoid intuition and rather trust statistics, math and logic.

If you’re at the beginning of studying psychology or really interested in this field of research. The theories of cognitive sciences serve as a neat introduction into the field of behavioral psychology and cognitive sciences.

If you’re working in finance or economics, then it might also be worth your time. You’ll learn about many cases where the “rational-agent model” that many assumptions are based on, simply doesn’t work out.

You should definitely avoid it if you’re usually preferring light literature. With around 500 pages and many passages that require a lot of focus to grasp the theories, it’s definitely no casual read. In the audio book format, however, I imagine it being quite bearable.

Impressions

One of the aspects that I enjoyed most is the tendency of Kahneman to conduct experiments with you as the reader, while you’re reading along. Often, before a fallacy of System 1 is discussed, you’re led right into making the same mistake as the participants of his research years ago.

We usually tend to think that we are special and not as prone to the mistakes that others make. These little mind games Kahneman plays with you will certainly convince you of the opposite.

As a little teaser, here’s an example which will obviously only work if you weren’t exposed to it before and really play along:

My Top 3 Quotes

  • “Intuition is nothing more and nothing less than recognition.”
  • “Our comforting conviction that the world makes sense rests on a secure foundation: our almost unlimited ability to ignore our ignorance.”
  • “The confidence that people have in their intuitions is not a reliable guide to their validity. In other words, do not trust anyone—including yourself—to tell you how much you should trust their judgement.”

How the book influenced me

  1. The main goal of the book as proclaimed is to make you more attentive to your and other people’s mistakes. The more I read and revise all the fallacies and biases of System 1, the more that actually becomes the case. Of course, it is easier to notice other people’s mistakes, but the more you do so, the better you get with it in your own life.
    Kahneman’s advice at the end of each chapter shows you how to precisely talk about these mistakes. Personally, this enabled me to give much better criticism in various situations!
  2. The second huge take-away is being able to better avoid financial mistakes. This is not only due to an increased ability to see through all the marketing strategies that are trying to manipulate you each and every day but also because on his advice on investing into the stock market.
    People who are trying to convince you that they are able to beat the market are largely only be able to do so in the short term. But more on that in another article 🙂
  3. What really resonated with me is Kahneman’s suggestion of a regret-avoidance-policy. To be short, whenever you make an important decision you don’t want to be able to blame yourself in the future because you missed an important fact due to some fallacy which led to a failure.
    He suggests either thoroughly applying yourself to the decision-making process, considering biases and acting as logically as possible or doing the exact opposite and being completely casual.
    Because consequently, either you did the best you could and things weren’t in your hands or you accepted the possibility of a loss long beforehand.
  4. My last take-away is to evaluate actually evaluate things of little importance with little importance. Usually, if we think about an undesirable event (bad grades, some dish we were cooking not working, …) in our life it becomes a dominating thought that is able to put us into a bad mood for days.
    Of course – how else could it be – this is another bias of System 1 called “What you see is all there is”. If you take a step back and think about such miniscule problems on a global scheme you’ll quickly notice that they shouldn’t matter as much as you make them.

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It’s especially helpful to people who are new to the self-development scene but should but taken with a grain of salt!

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