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Thinking, Fast and Slow by Daniel Kahneman - 3 Big Ideas



Find out:

  • The pitfalls of your inner genius

  • How you might be a sucker

  • What memories are made of...

Right after this awesome intro.


Intro


This was written by the world-renowned brilliant psychologist Daniel Kahneman.

This one is pretty jam-packed so this is a short intro.

Prepare yourself.


I’m Luke, this is Maddi and you are here to learn 3 big ideas from this book…


3 Big Ideas


1. The Two Systems


Inside our minds are two creatures.

The impulsive genius, who Daniel Kahneman calls system 1, and you, system 2.


System 1 thinks fast and system 2 thinks slow-ly.


Together, you are a brilliant team whose species has, on the whole, dominated everything they have ever touched.


And while there are many benefits to having an impulsive genius in your head, there are a few pitfalls.


Gullibility

System 1 feels the responsibility for figuring things out. So, when presented with information, he has to assume it is correct and run the calculations from there.


And that’s right, if you don’t step in and say, “come on, you know pigs aren’t green” you will be likely to later tell your friends about the astounding discovery you made while reading Green Eggs and Ham.

If you are preoccupied or being inattentive or lazy, system 1 is in control and you are extremely gullible –

Especially when you are in a good mood… speaking of –


Mood, Substitution and Cognitive Ease

In one study, people were asked how happy they were these days. After they answered, they were asked how many dates they went on. There was no correlation between the answers.


BUT


When they reversed the order of the questions, the effect was explosive. As expected, those who had went on fewer dates, rated themselves as less happy these days.


In the second case, they were primed with an overall unrelated question, but system 2 picked it up and marked it as associated, influencing the answer to the broad question with something of a narrow focus.


As well, in another study asking people about their overall happiness with life, a dime was set on a copier, to be found by half the participants. Those who found the dime rated their entire lives as more happy on average - just because they were primed to be in a better mood.


Also, when you scowl, like when looking at small black font on a white background, your system 2 is more active and you try harder. When something is easy or makes you happy, like when looking at large colorful font on a colored background, you are more gullible and perform more impulsively.


The Availability Heuristic

Why terrorism works to scare us all.


The ease with which we recall events influences how often we think those events occur.

If you are told to list 3 moments in which you were assertive, they come to you quickly and you will rank yourself as assertive. But if you are told to think of 9 examples, the last few come to you much slower and you will think of yourself as far less assertive. You. The same person. But two different judgements of yourself.


Availability is fluency plus emotional charge.


This is why when the news blasts you once a week with terrorism news and threats, you are more likely to be very scared, when it’s not really much to worry about in relation to other problems.


System 1 works under the impression that “what you see is all there is.” You can overcome the impulses of System 1 through self-control – but system 1 is always on and he never gets tired. This is important to recognize. Because this has important effects…


2. Econs and Humans


Econs are humans as according to the economic model that capitalism was built on and economists plan through.

Humans are people from the real world. People I also like to call, suckers.


Framing Effects

Sugar is bad for health. One bar has the phrase, 90% non-sugar; the other has the phrase, 10% sugar. Same bar. Same sugar. Not same response.


System 1 jumps out of his chair and shakes you, yelling, “look! That one is 90% non sugar! No contest! And they thought we would get the 10% sugar,” he finishes, shaking his head, smiling.


Once again, without the vigilance of system 2, System 1 will be swayed by how the information is presented.


Anchoring

Be warned - you may die from learning this.


How tall is the tallest redwood? People who were primed with 1200 ft. said 844 ft on average and those primed with 180 ft. said 282 feet on average. A difference of 562 ft.


But guess what… it works with random numbers too.


Participants were asked a question about the UN. The answer was a percentage. In the background a rigged wheel of fortune had been spun. If the wheel landed on 10, the average answer to the percentage question was 25% and if the wheel landed on 65, the average answer was 45%. And the wheel of fortune had nothing to do with the question but it still had a huge impact on the answers.


And the worst one. Judges. Loaded dice. Shoplifting woman. Sentencing. Dice said 3, average sentence 5 months. Dice said 9, average sentence 8 months.


Keeping score

The impulsive genius in our heads with us, tracks our status, our money and many other accounts, by compartmentalizing them by context. Here’s an example:


Say you bought some $80 tickets to a show. Then you lost the tickets. Would you buy tickets to the show again?


Not likely. No way you’re spending double to see this show.


Now say you check your wallet before buying tickets to find you’ve lost $80. The equivalent amount, except in cash. Do you still buy the tickets?


Probably. Though this is the same financial loss in both examples, according to system 1, the money lost comes from two separate accounts.


The loss or gain is judged from the reference point of the account.


Negativity bias

But account score is also influenced and affected by negativity bias.


Bad is stronger than good. Realistically and symbolically.


Animals fight harder to avoid losses than to gain and professional golfers putt better to avoid bogie than to get birdie. It’s true.


And the worst part of this is the sunk cost fallacy. You really don’t want to lose, so much so that when you start to lose, you don’t quit when you know you should, because you have already put so much into it. Turning a medium loss into a catastrophe. This happens in wars, in businesses and all over, due to system one keeping score, tracking wins and losses relative to specific, contextual accounts.


Were all suckers.


3. The Two Selves


Ice cold water.

Participants were instructed to submerge their hand into ice cold water for 60 seconds.

Then, they were asked to hold their hand in the water again, ice cold remember, for 60 seconds, then the study runners turned the temperature up by a few degrees and the participants kept their hands in for an extra 30 seconds.


So recap, first trial, pain for 60 seconds.

Next trial, pain for 60 seconds then slightly decreased pain for 30 more seconds.


Then, they were asked to do the trial again, but they could pick which one they wanted to do. At this point you probably won’t be surprised to know, the majority picked the 90 seconds of pain.


Here, you and system 1 are divided again. You, the experiential self would have chosen to do less pain. But system 1 has already filed the experience away, bookmarking two factors to draw from.


When remembering an experience, system 1 averages the peak experience plus the end experience.

The memory of the first trial was peak experience, pain and end experience, pain. For an average of pain.

The memory of the second trial was peak experience, pain and end experience, slightly less pain. For an average that was in-between pain and slightly less pain. Which meant this was the better memory.

It was not the better experience. But, most didn’t consider this, and chose what they remembered as better.


The duration of the experience is not a factor that is considered in memory.


Memories are stories that combine peak experience and end experience. This is how you remember and rate the shows you watch, your marriage and your vacations.


Concoct your experiences with this in mind. Have a really great time at least once and make sure it ends well.


Recap


System 1 is genius, but it’s genius comes at the cost of assumptions and falling for false patterns.


You may think of yourself as a rational actor… but odds are, some of the time, you’re a sucker just like the rest of us.


Experiences on the whole aren’t as important to us as the peak of an experience combined with the end of the experience.


Its too bad this show isn’t called 100 things you can use – or I would have just read the book to you.

Incredibly smart, sciencey and full of studies, Daniel Kahneman still is able to get the idea across and even expresses how you would recognize these different effects in normal day to day life.

This book was a combination of Strangers to Ourselves and Pre-suasion. A look into the brilliant unconscious mind that was also full of studies showing how biased and vulnerable people can be.


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By the way, it was a suggestion!

Thanks Klaus!

Now you leave us a suggestion!


The 2 year anniversary of this channel was yesterday. How cool!

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We’ll see you next week!

Bye!


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