Book Review “Thinking, Fast and Slow” Essay

I read the planetary bestseller Thinking, unfluctuating and Slow of Daniel Kahneman (Winner of the Nobel Prize) over the last 3-4 weeks. I withdraw it is a very(prenominal) interesting defy and it is describing very critically the human brain and mind, which gave me many insights into decision-making and errors we atomic number 18 doing automatically without noticing it every day. He is very ofttimes talking near clay 1 and governance 2. System 1 is quick its intuitive, associative, metaphorical, automatic, impressionistic, and it cant be switched off. Its operations involve no sense of intentional control, simply its the secret author of many of the choices and judgments you make and its the hero of Daniel Kahnemans book Thinking, Fast and Slow. System 2 is slow, deliberate, effortful. Its operations require attention.System 2 takes over, rather unwillingly, when things get difficult. Its the apprised being you call I, and one of Kahnemans main points is that this is a m istake. Youre wrong to identify with System 2, for you are also and equally and deeply System 1. Kahneman compares System 2 to a supporting instance who believes herself to be the lead actor and often has little idea of whats going on. System 2 is slothful, and tires easily so it usually accepts what System 1 tells it. Its often right to do so, because System 1 is for the most part pretty good at what it does its higher(prenominal)ly sensitive to keen environmental cues, signs of danger, and so on.It does, however, pay a high price for speed. It loves to simplify, to assume WYSIATI (what you see is all thither is), even as it gossips and embroiders and confabulates. Its hopelessly bad at the kind of statistical thinking often required for good decisions, it jumps wildly to conclusions and its subject to a fantastic suite of irrational biases and load resultants (the halo effect, the Florida effect, framing effects, anchoring effects, the confirmation bias, outcome bias, hinds ight bias, availability bias, the focusing fallacy, and so on). Thousands of experiments turn out been conducted, right across the broad board of human life, all to the same general effect. We dont know who we are or what were like, we dont know what were really doing and we dont know why were doing it. Thats a System 1 exaggeration, for sure, but at that places more truth in it than you can easily imagine. Judges think they make considered decisions about parole based strictly on the facts of the case. It turns out (to simplify only slightly) that it is their blood-sugar levels really sitting in judgment.We also hugely underestimate the role of chance in life (this is again System 1s work). Analysis of the performance of fund managers over the longer term proves conclusively that youd do just as well if you entrusted your financial decisions to a monkey throwing darts at a board. in that location is a tremendously powerful illusion that sustains managers in their belief their results, when good, are the result of skill Kahneman explains how the illusion works. The fact remains that performance bonuses are awarded for luck, not skill. They might as well be reach out on the roll of a die theyre completely unjustified. This may be why some banks now speak of retention bonuses rather than performance bonuses, but the idea that retention bonuses are needed depends on the shared myth of skill, and since the myth is known to be a myth, the system is profoundly dishonest unless the dart-throwing monkeys are going to be cut in. In an experiment designed to test the anchoring effect, highly experienced judges were given a description of a shoplifting offence.They were then anchored to contrary numbers by being asked to roll a pair of dice that had been secretly loaded to cite only two totals cardinal or nine. Finally, they were asked whether the prison sentence for the shoplifting offence should be greater or fewer, in months, than the total showing on the d ice. Normally the judges would have made super similar judgments, but those who had just rolled nine proposed an average of eight months while those who had rolled three proposed an average of only five months. All were unaware of the anchoring effect. The same goes for all of us, almost all the time. We think were smart were confident we wont be unconsciously swayed by the high list price of a house.Were wrong. (Kahneman admits his own inability to counter some of these effects.) Were also hopelessly subject to the focusing illusion, which can be conveyed in one sentence slide fastener in life is as important as you think it is when youre thinking about it. some(prenominal) we focus on, it bulges in the heat of our attention until we assume its role in our life as a whole is greater than it is. Daniel Kahneman won a Nobel prize for economics in 2002 and much of his time hes working together with Amos Tversky. Thinking, Fast and Slow has its roots in their joint work. It is an ou tstanding book, opulent by beauty and clarity of detail, precision of presentation and gentleness of manner.