Thinking, Fast and Slow

Thinking, Fast and Slow

by Daniel Kahneman

Why do we think the way we do? In Thinking Fast and Slow, Daniel Kahneman takes us on a tour of our mind to reveal the processes and systems that shape the way we think. He explains the abilities and faults of the two main types of thinking, fast and slow, and teaches you how to use each type to your advantage. With practical and enlightening insights into how we make choices - both in a professional and personal context - he reveals just how much our surroundings can influence our thought processes, if we allow them to.

Summary Notes

The Characters Of The Story

“We can be blind to the obvious, and we are also blind to our blindness.”

There are two types of thinking, one is fast and the other is slow. Each type of thinking is its own system with individual abilities, limitations, and functions. The main difference between the two is that fast thinking requires little to no effort to operate, whereas a conscious effort is necessary for slow thinking to work. For example, you would use fast thinking to solve the problem “2 + 2 = ?” and slow thinking to fill out a tax form.

This distinction becomes very important when we realize that attention is not unlimited, and when you go beyond the budget you have, you will fail. This is why you can only do multiple things at once when they are relatively easy and undemanding tasks, such as speaking to a passenger while driving on an empty road. However, you would not attempt to have a conversation while making a turn onto a busy road as you need to focus your attention on driving.

While your two types of thinking often split the labor between themselves well, they can clash when an automatic reaction (fast thinking) comes into conflict with an intention to control it (slow thinking). A universal example of this is trying not to stare at an oddly dressed couple in the same room as you. Sometimes, these clashes are caused by cognitive illusions. An example is experiencing a strong attraction towards someone with a history that forms a negative pattern. The good news is, these illusions can be overcome.

Actions to take

Anchors

“Anchoring effects are everywhere.”

The anchoring effect refers to how people tend to consider a particular value for an unknown quantity before estimating that value. A great, and common, example is how when buying a house, you almost certainly will be influenced by the asking price. Meaning, the same house will appear more valuable if the asking price is high, and less valuable if it is low.

There are two types of anchoring effects, each corresponding to a thinking type. “Anchoring by adjustment” describes the operation of slow thinking, where your mind starts at an anchoring number, assesses whether it is too high or too low, then adjusts the original estimate by mentally “moving” from the anchor. The adjustment typically ends prematurely, when you feel like you have “moved” enough. 

“Anchoring as priming effect” describes the operation of fast thinking, where your mind subconsciously associates something you see, feel or hear with your estimate. For example, consider the following questions:

  1. Was Gandhi more or less than 144 years old when he died?

  2. How old was Gandhi when he died?

It is highly unlikely that you would adjust your estimate down from 144 to answer the second question, like with the anchoring by adjustment approach. However, you are likely to provide a high estimate, as your anchor was subconsciously primed by the first question.

Actions to take

Regression To The Mean

“The feedback to which life exposes us is perverse.”

In statistics, regression to the mean refers to a phenomenon where if a sample of a random variable is extreme, the next measurement will be closer to the mean. This phenomenon is common in real life too - for example, if someone performs extraordinarily well on one instance, their next try is more likely to be worse, and vice versa. 

Now, when someone performs very well at a task, they are likely to be praised or rewarded (and similarly, punished for poor performance). Due to the regression to the mean phenomenon, the next time they perform that task, they are likely to do worse - making it seem like rewarding them for good performance results in worse performance. 

Our intuition often interferes with our ability to make accurate judgments and predictions. Intuition is a characteristic of fast thinking - but we can use slow thinking to overcome the bias caused by this characteristic.

Actions to take

Reversals

“The moral intuitions that come to your mind in different situations are not internally consistent.”

The choices you make are heavily dependent on the context in which you make them. For example, let’s say you are faced with two bets:

  1. You have a 30% chance of winning $150, and a 70% chance of losing $15

  2. You have a 95% chance of winning $40, and a 5% chance of losing $10

You would consider the second bet to be more valuable, as you are much more likely to win it. 

Now, let’s say you own that bet - what would be the lowest you would be willing to sell it for? Compare that value to the lowest you would be willing to sell the first bet for. You will find that the first bet is of higher value to you now.

To put it simply, you feel differently about the same thing when the context is changed. This phenomenon is the driving force behind many mistakes, and being able to discern the reality of the situation without being influenced by its context is a valuable life skill.

Actions to take

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