009: Thinking Fast + Slow

Pilot Eps Feb 24, 2020

“Thinking, Fast and Slow” (2011) is a non-fiction book by Daniel Kahneman about decision-making and behavioral economics. It has changed how I approach life and work by giving me frameworks to think about biases, errors in judgment, and cognitive energy.

TFAS describes patterns in how we:

  • Use available information
  • Assess risk and value
  • Balance the past, present and future

Kahneman identifies our two primary mental "operating systems”. They each serve key functions and can lead us astray (neither is perfect).


Until fairly recently, economists assumed that people were rational agents who coolly optimized for self-interest.  

This assumption was obviously ridiculous.

People make emotional decisions and fall for 'cognitive illusions' all the time (myself included!). It turns out that we do so in consistent, predictable ways.


Assumptions:

  • Humans evolved for survival: Food, status, safety, affiliation etc.
  • Our brain is a recent design. We're still a relatively ~new species.

Short Summary

Our operating systems are System 1 and System 2. These are universal modes of thinking - common to all. Kahneman describes them as:

Agents with their individual abilities, limitations and functions."
  • System 1 = "fast"
  • System 2 = "slow"

System 1 is instinctive, unconscious, designed for pattern recognition. It is confident and intuitive. It's the evolutionary survival aspect of our brain.

System 1 kicks in first (by default).
It perceives the world, recognizes objects, approximates distances and recoils from danger. By maintaining simple models of the world, System 1 automatically makes metaphors and associations. It sees situations and thinks "I know this, I can handle it".

System 2 is deliberate, conscious, designed for complex thinking. It enables analysis and experiences doubt. It is a more recent part of our brain.

By comparison, System 2 requires deliberate energy. It is much more cognitively demanding and fatiguing. It fuels comprehensive assessment and reasoning. But it consumes far more glucose along the way (the brain loves sugar 🍰).

To be human is to use both. Systems 1 and 2 exist in constant dialogue with each other.

Kahneman's key point: The brain seeks to conserve cognitive effort, when possible.

  • When we’re hungry, distracted or tired, we make worse decisions
  • It’s hard to hold multiple conflicting thoughts simultaneously

Thus, our thinking falls into paths of least resistance. So we're vulnerable to System 1's shortcuts. Many pages are devoted to describing mental "heuristics" and common biases (more here and here, if you wish).

System 1 continuously generates suggestions for System 2: impressions, intuitions, intentions, and feelings. If endorsed by System 2, impressions and intuitions turn into beliefs, and impulses turn into voluntary actions... You generally believe your impressions and act on your desires, and that is fine - usually."

The operative word: Metaphors and associations usually help us make sense of the complex world. They preserve valuable (and limited) brain-juice. But this default mode of thinking (via System 1) comes with risks:

  • We jump to conclusions
  • We rationalize away facts that don’t fit a narrative
  • We slip into selective attention (or denial)

In a way, this is human nature. A few weeks back, I described how the characters in Battlestar Galactica make decisions emotionally, and justify them rationally. It's frustrating, but also totally relatable (it's always easier to spot other people's mistakes than it is to acknowledge our own).

So, what?

If you accept these theories, the world starts to look different.

For me, TFAS changed how I think about habits, marketing, design, memory, public policy etc. It gave me language to describe things like anchoring effects, loss aversion, and defaults. And a way to think about overconfidence - the tendency to overestimate our abilities and odds of success.

Once you have names for these things, you start to recognize them everywhere. This book is long and written in kind of a dry, academic style. But it's full of powerful ideas and mental models - most of which continue to stick with me today.

The best part of reading it?
Proving how humans are wildly irrational creatures.

The worst: Realizing that I'm an idiot too.



Thanks for reading!



Citations 👇
"Thinking, Fast and Slow"
"The Undoing Project"
"Nudge"
"The Two Friends Who Changed How We Think About How We Think"