We all try to make the best decisions we can with the information available… Don’t we?
Yet, somehow, a survival chance of 90% seems better than a mortality rate of 10%, and as it turns out, we as fallible humans are prey to all manner of dubious heuristics.
Nobel Prize winner Dr. Daniel Kahneman lays out for us two sytems of thought process:
- Fast, intuitive, emotional
- Slow, deliberate, logical
He makes the case for how and why we do need both, but often end up using the wrong one. He notes how the first is required for efficiency, or we would spend all day deciding what socks to wear… The second, meanwhile, is required for high-stakes decisions, but is lazy by nature, and often we don’t engage it when we ought to.
Over the course of many diverse examples, Dr. Kahneman shows how again and again, the second system is slowly cogitating at the back of the class, while the first system is bouncing up and down with its hand in the air saying “I know! I know!”, even when, in fact, it does not know.
For a book largely founded in economics (it’s a massive takedown of the notion of the rational consumer), it is not at all dry, and is very readable in style. It’s engaging throughout, and readers far removed from Wall Street will find plenty of ways it relates to our everyday lives.
Bottom line: if you’d like to avoid making many mistakes in what you’d assumed to be rational decisions, this book is critical reading.
Click here to check out “Thinking, Fast And Slow”, and enjoy the results of better decisions!
