Book Review “Thinking, Fast and Slow” Essay

I read the international bestseller Thinking, Fast and Slow of Daniel Kahneman (Winner of the Nobel Prize) everyplace the last 3-4 weeks. I think it is a very interesting leger and it is describing very critically the human brain and mind, which gave me many insights into decision-making and errors we are doing mechanically without noticing it every day. He is very often talking about form 1 and arrangement 2. System 1 is fast its intuitive, associative, metaphorical, automatic, impressionistic, and it goatt be switched off. Its operations involve no guts of intentional control, yet its the secret author of many of the choices and judgments you even out 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 conscious being you call I, and one of Kahnemans main points is that this is a mistake. Youre wrong to identify with System 2, for you are also and equally and profoundly System 1. Kahneman compares System 2 to a supporting contribution who believes herself to be the lead actor and often has little idea of whats exit 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 postgraduately sensitive to subtle environmental cues, signs of danger, and so on.It does, however, pay a exalted price for speed. It loves to simplify, to tire WYSIATI (what you see is all there is), even as it gossips and embroiders and confabulates. Its hopelessly bad at the kind of statistical persuasion often required for good decisions, it jumps wildly to conclusions and its subject to a fantastic suite of irrational biases and interference way outs (the halo pith, the Florida effect, framing effects, anchoring effects, the confirmation bias, outcome bias, hindsight bias, availabilit y bias, the focusing error, and so on). Thousands of experiments nonplus been conducted, right across the broad board of human life, all to the aforesaid(prenominal) general effect. We dont k promptly 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 theres more truth in it than you can easily imagine. Judges think they make considered decisions about parole base strictly on the events of the case. It turns out (to simplify however slightly) that it is their blood-sugar levels really sit in judgment.We also hugely underestimate the role of chance in life (this is again System 1s work). Analysis of the functioning of fund managers over the longer term proves conclusively that youd do just as vigorous if you entrusted your financial decisions to a monkey throwing fleet at a board. There is a tremendously powerful misrepresentation that sustains managers in their belief their res ults, 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 handed out on the tumbler pigeon of a go wrong theyre completely unjustified. This may be why some banks now speak of storage 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 know 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 offensive activity.They were then anchored to different numbers by being asked to roll a pair of dice that had been secretly loaded to produce only two totals three 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 dice. Normally the judges would have made extremely similar judgments, but those who had just involute 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 selfsame(prenominal) goes for all of us, almost all the prison term. 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 comeback some of these effects.) Were also hopelessly subject to the focusing illusion, which can be conveyed in one sentence Nothing in life is as important as you think it is when youre mentation about it. Whatever 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 it s grow in their joint work. It is an outstanding book, distinguished by beauty and clearness of detail, precision of presentation and gentleness of manner.