Thinking, Fast and Slow

Have you ever come across a book that gives you so much information that you are left completely over-whelmed? Well, "Thinking, Fast and Slow" by Daniel Kahneman is a fine specimen in that regard, it is full of well-researched and insightful concepts and could easily have been split into 3 books.

The criticism (if any) that I could find were that it doesn't fit well as an audiobook and for someone like me who does most of their listening on the move it was hard to latch on to some of the concepts. The other is that I found it really hard to tie in all the different things I learnt in a coherent concept that I can carry around and pull back from memory. But these are mostly my issues and I can't fault the book for them.

I initially picked this book because I was looking for a framework that would help me think and respond fast in impromptu situations, but what got was a lot more. Here are my (many) take-aways from this book:

• The 2 thinking systems: Our brains have 2 thinking systems, the faster and intuitive 'System 1' and the slower and contemplative 'System 2'. Although, our intuition (System 1) has served us well in a lot of scenarios it still doesn't get it right on many occasions which require a more contemplative approach, and we tend to be oblivious to this failing.

"What you see is all there is" - this is basically the mode that 'System 1' operates in, it disregards any other possibilities.

• The lazy 'System 2': Now that we know that 'System 1' isn't the best person for the job in all scenarios, the solution is simple, just get 'System 2' to weigh in on decisions, right? Well, that would be the right answer if it wasn't for the lethargy of 'System 2', it takes a lot to engage it and to keep it engaged. If you aren't watchful then to save itself the effort it might substitute a hard question for a relatively easy one.

The Substitution effect: "Who will win the election?" is substituted by "What is my impression of the candidates?" or "What was the response from the last few people I causally asked about the election?" by System 2.

• Experts get it wrong: The above 2 system thinking affects everyone, even the hardest experts, so question what you're hearing from them and apply your own 'System 2'. Research suggests that an expert intuition is generally worse than a dart throwing monkey.

External Factors Impacting the Quality of our Decisions/Actions

• Never on an empty stomach: The most eye opening research was the quality of parole decisions being taken by adjudicating Judges before, after and between meals. It seems that the decisions immediately after a meal were more favourable as compared to later, this is due to the depletion of glucose levels in the body which is used by the nervous system while engaging in complex cognitive tasks.
• You've been primed: This one is a bit scary if you read through the research and it's effectiveness. In short, it's really easy to influence the final outcome of any action/thought of an individual by priming them. For instance, the action of smiling primes us for creative thinking, whereas frowning primes us to be more critical, that's why people naturally tend to frown when faced with a tough problem which 'System 1' can't resolve. Similarly, seeing small sized text activates 'System 2' due to the increased cognitive load, whereas bold text promotes cognitive ease and is believed and received more readily.
• The Anchoring effect: Similar to priming is the anchoring effect where a mere suggestion of a number can get you anchored to it and your own (seemingly independent) evaluation will be fairly close to it, unless you activate 'System 2'. This is relevant in price negotiations of any kind, so for your sake, walk away from a negotiation where the other side has anchored to a very high or low number.

Encountering a new (unknown and possibly hard to pronounce) name can generate a sense of unfamiliarity and unease.

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Understanding our Inherent Biases

• Halo Effect - The impact of the "First Impressions" we carry from our initial encounters on our judgements in any subsequent interactions is well documented and we need to be constantly vigilant of it's impact. It plagues us all and was also revealed by the author's own bias while grading papers for his students through the term.
• Outcome Bias - Our inability to evaluate 'cause & effect' correctly leads to outcome biases and as someone who consumes a lot of content from 'Business writers' I need to be particularly watchful of this bias. Business writers tend to be affected by this as they attribute the business success or failure to certain practices, structures, or leaders. The fact is that the correlation between the success of certain practices or effectiveness of leaders is just a little better than 50:50, the most relevant example of this is the book "Good to Great" by Jim Collins where the companies researched and touted as winners underperformed the Dow a few years down the line.
• Validity Bias - This one should probably be right at the top since it has a profound impact on how we evaluate candidates in our recruitment pipelines. The efficacy of 'group discussions' that are still widely used in MBA entrances and candidate evaluations or the biases in play in the 1-to-1 interviews need a very serious review. Research on Israeli army recruits suggests that you are likely to get better results from a role-based objective checklist rather than by using your own (overrated) subjective evaluation. Time I started playing a lot more attention to the checklist on our recruitment portal.
• Regression towards mediocrity - There are 2 concepts tied to this, first is the problem of relying on small sample sizes in any survey as such surveys are highly likely to produce extreme results. The other concept is that extreme results naturally deviate towards the mean over time, therefore carefully evaluate the decisions you are taking based on the extreme results you have seen from a small sample. Experiments on children with acute depression showed improvement not because of any treatment but because they tended to deviate towards the mean over time.
• Recency Effect - We evaluate risk based on 'System 1's' ability to retrieve occurrences or news from recent memory, this explains the sudden consciousness to air accidents or even drug abuse among celebrities.

About Intuition: Intuition can only be relied on when the environment presents stable conditions.

In conclusion, it's extremely hard (if not impossible) to summarise the lessons from this book in a paragraph, so I am not even going to attempt it. The best way to possibly end this post is by strongly recommending that you read this book.

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Interested in other book reviews and articles by Jagbir? Here is a quick reference guide.