Thinking, Fast and Slow

Author: Daniel Kahneman

Published: 2010 (418 pages)

Started reading: 15.January.2017

Finished reading: 12.April.2017

Brief description

Thinking, Fast and Slow is a collection of Daniel Kahneman’s life’s work, which is immense.

Kahneman is the Nobel Prize-winning Israeli psychologist who helped kickstart the field of behavioural economics, changed the way we think about human rationality, and, for the better part of 30 years, worked in partnership with the late Amos Tversky to deliver some of the most original psychological insights of the 20th century.


A graphical representation of loss aversion, the central element of Prospect Theory, Kahneman and Tversky’s most famous idea. If you remember one image from the book, make it this one. The pain of a loss is roughly twice the pleasure of an equivalent gain. Losing $100 dollars feels about twice as bad as winning $100 feels good. The implications of this, for decision theory, psychology, the markets and policy, are huge.

Kahneman, now 84, is often described as the most important and influential psychologist alive. He is also generous with his time. Having emailed him on two separate occasions, he replied both times. (Perhaps there is a lesson in this, given he has made a study of happiness.)

Kahneman’s tortured approach to writing the book offers another glimpse into his character: self-doubting genius. He vacillated for a long time about whether Thinking, Fast and Slow would ruin or crown his career, and even paid four younger colleagues $2000 each to provide anonymous advice about whether to abandon the manuscript.  He was shocked that it would sell over a million copies, be critically acclaimed and win awards (the details of how much he hated writing it are covered in Michael Lewis’ beautiful book The Undoing Project).

Thinking, Fast and Slow is a large book and can be divided into three parts. The first part is about two systems, the second about two species, and the third, two selves.


Danny K

Two Systems

Kahneman sets the stage for a mental drama between “two systems”. (This is a useful metaphor, not a realistic model of our minds.) System 1 is the intuitive, effortless, immediate aspect of your mind, which reacts to stimuli without prompting. It’s the part of you that automatically knows the answer to 2+2, judges whether a social situation is hostile or friendly, and perceives coherent stories even in events that are not causally linked.

System 2 is the smarter yet lazier witness to the judgments of System 1. It’s the thinking mind. It’s the part of you that clanks into gear when asked what 28 x 47 is. System 2 receives and interprets the information offered by System 1, but often accepts it uncritically because vetting requires cognitive effort.

“You have now been introduced to that stranger in you, which may be in control of much of what you do, although you rarely have a glimpse of it. System 1 provides the impressions that often turn into your beliefs, and is the source of the impulses that often become your choices and your actions…And it does most of this without your conscious awareness of its activities. System 1 is also, as we will see in the following chapter, the origin of many of the systematic errors in your intuitions.”

Two Species

Adopting the lexicon of his friend and collaborator Richard Thaler (author of Misbehaving), Kahneman distinguishes Econs (the fictional, supremely rational characters populating economists’ models) from Humans (the sometimes irrational, bias-afflicted people who inhabit the real world).

Humans are “beautiful devices”. We very well adapted to what we do, but there are some situations where our System 1 thinking breaks down in systematic and predictable ways. These repeatable glitches in reasoning are known as cognitive biases, and Kahneman makes a comprehensive catalogue of their various flavours.

Take, for example, the availability heuristic. People tend to judge the frequency of an event category by how easily they can call examples to mind. As a result, you might feel irrationally frightened of terrorism or a shark attack, because these situations are well-documented by media, despite their statistical rarity.

Kahneman argues that being aware of biases won’t stop them from afflicting you: he wrote the book on them and even he remains prone to predictable errors in judgment. I am not so sure this is absolutely true but I can’t offer much more than a hunch on that. Kahneman, for his part, does allow one exception. On page 131 he notes that teams and marriages can come into conflict because people remember their own actions better than others’, so availability biases lead individual participants to overweight their own contributions and view the other parties as slacking and/or ungrateful. Being aware of this and observing that “there is usually more than 100% credit to go around” can defuse the situation. But this, he says, is one of the few situations where debiasing works because it can be easily anticipated.

Two Selves

In the 1990s, his relationship with his chief collaborator Tversky (who died in 1996) growing strained, Kahneman began to focus more on hedonic psychology (a close relation of positive psychology) and the study of happiness. His biggest contribution to this field has been to add a layer of complexity and nuance to the debate about happiness by exposing a distinction between our remembering selves and our experiencing selves. (This is the topic of Kahneman’s 2010 TED talk.)

Our whole lives are tug-of-war games between our remembering and experiencing selves. For example, getting drunk would be fun for the experiencing self, but may literally leave the remembering self with little to look back on. Sometimes we can over-budget for our remembering selves, at the expense of the present. Incessant photography on holidays is one example of how gathering memories, bowerbird-like, for the benefit of a future ego or to construct an image that will reflect favourably with peers impairs fully savouring (and, ironically, recalling) those same moments.

But these behaviours hint at a deep truth. In experiments and surveys conducted by Kahneman and his colleagues, we come across as remarkably indifferent to our experiencing selves. Would you take an experience you knew was going to be blissful but that would be wiped from your memory afterwards, or an average one that stays with you? Most people would choose the second option as if the first was pointless. On the other hand, would you be okay with an extremely painful operation, under no anaesthetic, where you are promised a drug that you take at the end, which wipes your memory of the entire episode? Given the amnesic drug, most people seem not to care about the prospect of pain.

We all want a good life story, to feel like we mattered. What’s most interesting when we reflect on our lives and the lives of others is how we measure their overall goodness or badness. We do not, as one might expect, measure the integral, or area under the curve (picturing happiness as a function of time here). Instead, we judge them by moments and endings, an idea which I will explain a little more in the actionable insights below.

For now, here is an example of how this looks. In one study by Ed Diener that Kahneman cites, participants were asked to assess the overall desirability of a fictional character’s life, who dies suddenly in a car accident at either the age of 30 or 60. “Jen” lived an exceptional life until her death. She was extremely happy, enjoyed her work, took vacations and loved her friends and family. In another version of the story, given to a separate group, Jen’s life is extended by 5 years, to 35 or 65, but those extra years are described as pleasant though not as good as before: Jen sort of fizzles out. As Kahneman notes, “Adding 5 ‘slightly happy’ years to a very happy life caused a substantial drop in evaluations of the total happiness of that life.”

If the remembering self is all that matters, you remember the average and not the sum of your life’s graph. For me this means we should sacrifice instant gratification for achieving great things – you wouldn’t have remembered all the pleasure anyway, and you won’t remember all the pain, but you will remember your own narrative with satisfaction.

“Odd as it may seem, I am my remembering self, and the experiencing self, who does my living, is like a stranger to me.”

Thinking, Fast and Slow is a masterpiece, possibly marred by the inclusion of some studies that have since failed to be replicated (eg. priming). However, I think that can be overlooked for what it teaches us about checking our intuitions and biases and for enriching the concept of happiness.

I can think of at least a dozen practical ideas I have taken from Kahneman’s book: loss aversion, the possibility effect, availability bias, optimism bias, the affect heuristic, the the base rate problem, anchoring, competition neglect, the illusion of skill, the ‘fourfold pattern’, the law of small numbers, ‘WYSIATI’, the focusing illusion, the representativeness heuristic. Choosing two is hard, but here are a couple that have been coming to mind more recently.

Actionable insights

> Beware the planning fallacy. Due to optimism bias, people are likely to make overly rosy projections about the timelines of their own projects. We overestimate our own abilities and fail to anticipate challenges. Nassim Taleb has pointed to the Sydney Opera House as an example of the planning fallacy (it was 1357% over budget and 10 years late). Realistic timelines can be set by identifying the statistical baseline for projects in your category. Kahneman calls this taking the “outside view” as opposed to the “inside view”.

> Find ways to apply the peak-end rule. Returning to our discussion about the remembering self, our lasting impression of a pleasurable/painful experience is based on how pleasurable/painful it was at the most intense point and at the end. We simply neglect the duration of the experience. Our brains have evolved to deal with pleasure and pain in this way and there’s little way around it. Accordingly, find ways to apply this to your own life and memories. For example, I recently co-hosted a party and our guest speaker went a bit off the rails. A friend in the audience attempted to persuade me to pull him off the stage, but I thought it better to let the performance go on for a few more minutes until it finished, and then step in and ask some more appropriate topics as questions, to finish on a high note. If I hadn’t done this, people’s abiding memory of the event would have been of the speaker’s poor performance and me interrupting him.

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