Daniel Kahneman is an Israeli-American psychologist who, in 2002, won a Nobel Prize (shared with Vernon L. Smith) for his work in economic science.
I found this book absolutely fascinating as Kahneman, bit by bit, uncovers the hidden biases that influence our decision-making. His work involves describing the two parts of the human brain that he calls System 1 and System 2. The role of the two systems are completely different. System 1 is the intuitive part of the brain that makes decisions quickly based on past experiences, existing beliefs and prejudices and System 2 works much more slowly and is analytical, deliberate and consciously effortful.
We like to think we are rational creatures and that our conscious thoughts can override our biases but science has proved that the ‘boss’ of our brain is System 1.
System 2 is lazy and is easily affected by System 1 which means if we have faulty information and biases existing in System 1, unless we are consciously questioning them – which can be almost impossible because we are almost certainly unaware of our errors – we can make important mistakes in our decision making.
An example of the laziness of System 2 is in asking for an answer to a simple mathematical problem. If a bat and ball cost £1.10 and the bat costs £1 more than the ball, how much is the ball? The vast majority of people will give the answer 10p, which after a certain amount of effortful thought, we will know is the wrong answer. But it’s the easiest one to arrive at because it looks right.
The general point about the size of our self-ignorance extends beyond the details of Systems 1 and 2. We’re astonishingly susceptible to being influenced – puppeted – by features of our surroundings in ways we don’t suspect. One famous (pre-mobile phone) experiment centred on a New York City phone booth. Each time a person came out of the booth after having made a call, an accident was staged – someone dropped all their papers on the pavement. Sometimes a dime had been placed in the phone booth, sometimes not (a dime was then enough to make a call). If there was no dime in the phone booth, only 4% of the exiting callers helped to pick up the papers. If there was a dime, no fewer than 88% helped.
It could be said that the decision to help would be based on the values we hold but those values can be affected by the interpretation of external circumstances, which then affects our mood. We are often unaware of the reasons for our behaviour but nevertheless still responsible for it.
This is one of the most important books I have read in what could loosely be termed the arena of psychology and economic science, and I believe you would find it incredibly enlightening. Time and again, when reading another experiment on how our biases prevent us from thinking rationally, I thought: “that can’t be right” but the scientific evidence proves it to be so. If you’re a sceptic and like a good argument with a book, buy this one.