Jeff Hirsh Read: February 2021
Inspiration: Why is this book so frequently cited in discussion of psychology and economics?
Summary
Written with the help of ChatGPT, below is a brief summary to understand what is covered in the book.
“Thinking, Fast and Slow”, published in 2011 by author, psychologist, and professor Daniel Kahneman introduces the concept of “System 1” and “System 2” thinking, which represent how our brains make decisions. System 1 is fast, automatic, and emotional, while System 2 is slower, more deliberative, and logical. The book discusses how our cognitive biases, or systematic patterns of deviation from norm or rationality in judgment, can influence our decision making and how we perceive the world around us. It also explores how to improve decision making by being aware of and trying to overcome these biases. The book covers a wide range of topics, including how our brains process information, how we make judgments and decisions, and how we can improve our thinking and decision making.
Unedited Notes
Direct from my original book log, below are my unedited notes (abbreviations and misspellings included) to show how I take notes as I read.
S1=rapid, intuition (real hero of story), S2=deliberate, effortful (thinks hero, but S1 guides/mobilizes S2), pupils dilate in accordance with effort, shrink when stop effort, S2 good for complex, S1 intuitions influence S2, ideomotor effect is the influencing of an action by an idea (“priming”, happens subconsciously when see or hear certain things then do actions later), brain is naturally associative and creates ties/links even when not needed, mind and body react together (body reacts just as much), system 1 is key associative machine where priming occurs that later triggers beliefs and actions and impulses, cognitive ease vs strain (strain decreases creativity and comfort but less errors and more effort), familiarity not easily distinguished from truth (result in illusions of truth if repeated), s2 is lazy and try for least effort, S1 make bets to interpret things (cost of being wrong usually low but sometimes S2 intervene), Halo Effect is when like one thing about a person and assume other qualities you have no info about are good and admirable, halo means big weight on first impressions, what we see is all there is (leads to overconfidence, based on quality of story you tell self), S2 often just accepts S1 intuitions, present state of mind looms large when evaulate your happiness (can be framed by preceding q’s), drawn to content of findings more than reliability (ignore sample size more than should, paints simpler picture of world), forget small samples get more extremes on both sides, think the opposite is good way to combat anchoring (anchors impact us way more than expect), adding detail makes scenarios more persuasive and more plausible thus judged as more likely when really more vague/general scenarios are more likely (more detail scenario=less likely to come true), conjuction fallacy is view two events together snd more probable than one on own in direct comparison, regression to mean is why people think punishing bad works (yell then person improves next time so think yelling is good when really just regress to mean, poor followed by good and good followed by poor, why think praise hurts performance, think causal but just regression), correlation and regression to mean are diff angles of same concept (if imperfect correlation then will regress), to make intuitive predictions think about baseline avg then think about your intuition then think about correlation and meet in middle (intuition overestimates so must tame), use premortem where pretend a year in future and decision went poorly and explain why it failed before actually make decision), overweight small probabilities (possibility effect, decision weight deviate from probabilities), risk averse in gains and risk seeking in losses (pay premium for sure gain vs gamble to avoid sure loss), better to sell losing stocks than winners bc winners likely to keep winning but goes against emotions and mental accounts where want to gain/win, broad frame of judgements and joint evaluation improves rationality, losses evoke stronger negative emotions that costs (feel better avoiding discount than paying surcharge, we are bound by framing not by reality, organ donation determined by whether have to opt in or opt out (if default is yes and have to opt out then 80%+ vs if default is no and have to opt in 15%), experiencing self vs remembering self are different—remember based on peak-end rule which differs from experience (peak intensity and intensity at end dictate memory of event), remembering self neglects duration which can be bad long term, people care more about remembering selves not experiencing selves, duration neglect of remembering self and peak-end rule lead to favor short term intense happiness over long term moderate happiness, libertarian paternalism guided by nudges from gvt to good behavior based on framing and psych but not forced (e.g Obama USDA require 90% fat free/10% fat labeling)
