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878 of 926 people found the following review helpful
5.0 out of 5 stars A brilliant book by a brilliant mind. BE SKEPTICAL ANYWAY., November 17, 2011
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This review is from: Thinking, Fast and Slow (Hardcover)
Back in 1994, Massimo Piattelli-Palmarini, Director of the Institute of San Raffaele in Milan, Italy, wrote a charming little book about common cognitive distortions called Inevitable Illusions. It is probably the very first comprehensive summary of behavioral economics intended for general audience. In it, he predicted that the two psychologists behind behavioral economics - Amos Tversky and Daniel Kahneman - would win the Nobel prize. I didn't disagree with the sentiment, but wondered how in the world were they going to get it since these two were psychologists and there is no Nobel prize in psychology. I didn't think there was much chance of them winning the Nobel Prize in economics. I was wrong and Piattelli-Palmarini was right. Kahneman won the Nobel prize in Economic Sciences. (Tversky unfortunately prematurely passed away by this time.) Just as Steve Jobs who was not in the music industry revolutionized it, the non-economists Kahneman and Tversky have revolutionized economic thinking. I have known Kahneman's work for quite some time and was quite excited to see that he was coming out with a non-technical version of his research. My expectations for the book were high and I wasn't disappointed.

Since other reviewers have given an excellent summary of the book, I will be brief in my summary but review the book more broadly.

The basis thesis of the book is simple. In judging the world around us, we use two mental systems: Fast and Slow. The Fast system (System 1) is mostly unconscious and makes snap judgments based on our past experiences and emotions. When we use this system we are as likely to be wrong as right. The Slow system (System 2) is rational, conscious and slow. They work together to provide us a view of the world around us.

So what's the problem? They are incompatible, that's what.

System 1 is fast, but easily swayed by emotions and can be as easily be wrong as be right. You buy more cans of soup when the display says "Limit 12 per customer". We are on autopilot with this system. System 1 controls an amazing array of behavior. System 2 is conscious, rational and careful but painfully slow. It's distracted and hard to engage. These two systems together provide a backdrop for our cognitive biases and achievements.

This very well written book will enlighten and entertain the reader, especially if the reader is not exposed to the full range of research relating to behavioral economics.

This book serves an antidote to Malcolm Gladwell's Blink. Although Gladwell never says that snap judgments are infallible and cannot badly mislead us, many readers got a different message. As the Royal Statistical Society's Significance magazine put it "Although Gladwell's chronicle of cognition shows how quick thinking can lead us both astray and aright, for many readers Blink has become a hymn to the hunch." While Kahneman does show how "fast thinking" can lead to sound judgments, he also notes how they can lead us astray. This point is made much more clearly and deliberately in Kahneman's book

All my admiration for the brilliance and creativity of Kahneman (and Tversky) does not mean that I accept 100% of their thesis. Consider this oft-quoted study. Linda is 31 years old, single, outspoken, and very bright. As a student, she was deeply concerned with the issues of discrimination and social justice, and she also participated in anti-nuclear demonstrations. Which is more probable?
1. Linda is a bank teller.
2. Linda is a bank teller and is active in the feminist movement.
Eighty-five percent of test subjects chose the second option, that Linda was a bank teller and active in the feminist movement. Kahneman's interpretation is that this opinion is wrong because the probability of a (random) woman being a bank teller is greater that than person's being a bank teller AND a feminist. What Kahneman overlooks here is that what most people answered may not be the question that was asked. The respondents may not have been concerned with mathematical probabilities, but rather could be responding to the question in reverse: Is it more likely for a current activist to have been an activist in the past compared to others in the profession? A more formal and theoretically better argued rebuttal of some of Kahneman's hypotheses can be found in the works of Gerd Gigerenzer.

Kahneman notes that even top performers in business and sports tend to revert to the mean in the long run. As a result, he attributes success largely to luck. I'm not so convinced of this. There can be alternative explanations. People who achieve high degree of success are also exposed to a high degree of failure and the reversion to the mean may be attributable to this possible mirror effect. Spectacular success may go with spectacular failure and run-of-the-mill success may go with run-of-the-mill failure. Eventually everyone may revert the mean, but the ride can be very different. Chance may not account for that.

Another concern is that much of the work is done in artificial settings (read college students). While much of what we learnt can perhaps be extended to the real world, it is doubtful every generalization will work in practice. Some may find Kahneman's endorsement of "libertarian paternelism," not acceptable. More importantly, when applied to the real world it did not always found to work.

In spite to these comments this book is written carefully in a rather humble tone. I also appreciated Kahneman's generous and unreserved acknowledgement of Tversky's contributions and his conviction that, had he been alive, Tversky would have been the co-recipient of the Nobel Prize. My cautionary comments probably have more to do with the distortions that might arise by those who uncritically generalize the findings to contexts for which they may not applicable. As mentioned earlier, the wide misinterpretation of Gladwell's Blink comes to mind.

Nevertheless, Thinking Fast and Slow is a very valuable book by one of the most creative minds in psychology. Highly recommended. For a more complete and critical understanding, I also recommend the writings of the critics of behavioral economic models such as Gerd Gigerenzer.

PS. After I published this review, I noticed an odd coincidence between Thinking Fast and Slow and Inevitable Illusions that I mentioned in my opening paragraph. Both books have white covers, with an image of a sharpened yellow pencil with an eraser top. How odd is that?
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Tracked by 8 customers

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Showing 1-10 of 23 posts in this discussion
Initial post: Nov 25, 2011 10:13:25 AM PST
Contrarian says:
Thanks for the review. I too have found the work of Gigerenzer enlightening and I think it deserves more notice. However, I wouldn't say he really provides a "rebuttal". He does offer some interesting insights and counterpoints to some of K&T's work. However, some of his own studies seem to be more designed to support preconceived notions rather than efforts to understand better how we make decisions. There was an exchange of noted between Gigerenzer and Kahneman and Tversky that I think it enlightening. I can track down the reference if you would like.

In reply to an earlier post on Nov 27, 2011 2:13:28 PM PST
@ Contrarian

You are right. Counterpoints may be a better word than rebuttal in describing Gigerenzer's arguments against K&T's inferences. I should be more careful in my use of words. I didn't mean to say I accept Gigerenzer's counterpoints (even though I find them very well made), but I do think his work deserves a wider audience. Kahneman's research is so creative and his exposition so good that I am afraid that, with most of us, System 1 takes over. My calling attention to critics of behavioral economics is a really a call to engage System 2 as well while reading Kahneman.

Yes, if you could locate the reference it would be helpful. Thank you for the offer.

In reply to an earlier post on Jan 8, 2013 11:27:09 AM PST
Zosh says:
Please supply the reference. Thanks.

In reply to an earlier post on Jan 9, 2013 6:03:42 AM PST
Contrarian says:
Gigerenzer, G. (1991). How to make cognitive illusions disappear: Beyond "heuristics and biases." In W. Stroebe & M. Hewstone (Eds.),
European review of social psychology, (Vol. 2, pp. 83-115). Chichester,
England: Wileyhttp://library.mpib-berlin.mpg.de/ft/gg/GG_How_1991.pdf

Kahneman, D., & Tversky, A. (1996). On the reality of cognitive illusions. Psychological Review, 103, 582-591.
http://psy2.ucsd.edu/~mckenzie/KahnemanTversky1996PsychRev.pdf

Gigerenzer, G. (1996). On narrow norms and vague heuristics: a reply to Kahneman and Tversky (1996).
Psychological Review, 103, 592-596.
http://library.mpib-berlin.mpg.de/ft/gg/GG_On%20Narrow_1996.pdf

This also sounds like it might be insightful

Gigerenzer's normative critique of Kahneman and Tversky
Peter B.M. Vranas
http://faculty.arts.ubc.ca/pbartha/p520w07/vranas.pdf

In reply to an earlier post on Jan 9, 2013 6:04:40 AM PST
Last edited by the author on Jan 9, 2013 6:05:20 AM PST
Contrarian says:
Hi, I realize I offered to provide references but then dropped the ball (until someone else asked). They are listed above (and below).

Gigerenzer, G. (1991). How to make cognitive illusions disappear: Beyond "heuristics and biases." In W. Stroebe & M. Hewstone (Eds.),
European review of social psychology, (Vol. 2, pp. 83-115). Chichester,
England: Wileyhttp://library.mpib-berlin.mpg.de/ft/gg/GG_How_1991.pdf

Kahneman, D., & Tversky, A. (1996). On the reality of cognitive illusions. Psychological Review, 103, 582-591.
http://psy2.ucsd.edu/~mckenzie/KahnemanTversky1996PsychRev.pdf

Gigerenzer, G. (1996). On narrow norms and vague heuristics: a reply to Kahneman and Tversky (1996).
Psychological Review, 103, 592-596.
http://library.mpib-berlin.mpg.de/ft/gg/GG_On%20Narrow_1996.pdf

This also sounds like it might be insightful

Gigerenzer's normative critique of Kahneman and Tversky
Peter B.M. Vranas
http://faculty.arts.ubc.ca/pbartha/p520w07/vranas.pdf

In reply to an earlier post on Jan 9, 2013 7:11:24 AM PST
@ contrarian

Thank you for the references. Since you had not responded, I assumed you perhaps had not read my response. I'm sure these references will be of interest to others, in addition to myself and Zosh.

@ Zosh

Thank you for following it through.

Posted on Jan 27, 2013 8:25:46 AM PST
Martin Zook says:
So what's the problem? They are incompatible, that's what.

I am just now through the first section in which K establishes the bifurcated processes of thinking. Maybe I missed something, but it seems to me that the two processes described by K lead us to perceive differently, but that nonetheless the two processes are complementary, even if they lead to differing - sometimes opposed - perceptions. Maybe it's my Buddhist (awakened mind) bias showing through, but it seems to me that the processes K explores are integrated currents of the same stream.

Posted on Jan 27, 2013 9:25:19 AM PST
Vadim says:
Concerning your comment about the Linda-experiment. I think Kahneman makes it clear in his book that he DOES NOT overlook what you claim he overlooks. He actually cites the responses of other scientists to that experiment, which are like yours, and goes on explain why they are not justified. Maybe the best responce is the experiment described right after the Linda-experiment. There is a die with four green faces and two red faces, which would be rolled 20 times. Participants were shown three sequences of greens and reds and were asked to choose one. If that sequence shows up in the sequence of 20 rolls, the participant "wins". The sequences are as follows: RGRRR, GRGRRR and GRRRRR. In this experiment the outcome was the same as in the Linda-experiment (many participants chose the second sequence over the first one). Here the possibilities of misinterpreting the question are minimized. Also it is highly unlikely (I'd say impossible) that Kahneman would not take into account that the participants might answer the wrong question as he devotes whole chapters to the substitution bias.

Posted on Mar 22, 2013 5:53:55 AM PDT
Thanks for your interesting review. I noticed that you are an avid reader on the subject of decision making, and I thought you would be interested in reading the book by Jonathan Haidt, The Righteous Mind.

Posted on Jun 3, 2013 7:01:26 PM PDT
Last edited by the author on Jun 3, 2013 7:04:06 PM PDT
Perhaps the publisher was thinking fast when selecting the cover. :)
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