Best Summary: Thinking, Fast and Slow by Daniel KahnemanIf you are involved with strategy in any way, I strongly recommend that you read book by the Nobel prize winning Psychologist, Daniel Kahneman. The book forces me to stop and think more slowly about things. More importantly it is about when our mechanisms for thinking let us down and how we can become more aware of what decisions we are making, how we are making them and the quality of those decisions. In the book, Daniel Kahneman sets up two metaphors for how we think and make decisions. He describes these two systems for decision making as being like two characters in a novel.
Thinking fast and slow about strategy and decision making
A human being "is a dark and veiled thing; and whereas the hare has seven skins, the human being can shed seven times seventy skins and still not be able to say: This is really you, this is no longer outer shell. The idea surged in the 20th century and became a commonplace, a "whole climate of opinion" , in Auden's phrase. It's still a commonplace, but it's changing shape. It used to be thought that the things we didn't know about ourselves were dark — emotionally fetid, sexually charged. This was supposed to be why we were ignorant of them: we couldn't face them, so we repressed them.
How fine it must be to have Daniel Kahneman's confidence in the effect of one's words! And indeed he does, to an extent recognised in by the award of the Nobel Prize in economics. Kahneman and his intellectual partner Amos Tversky, who died in , humanised economics by demonstrating systematic biases in the way people assess prospects and make decisions. They offered evidence about mental processes in place of the economists' traditional assumption that humans make their choices by thinking rationally. Now their view of the mind has become conventional, and that passionless accountant homo economicus survives only as a straw man who illustrates the superior understanding of psychologically informed "behavioural" economics.
Lazy Brain Shortcuts
In Thinking, Fast and Slow , Nobel Prize-winning psychologist Daniel Kahneman looks at the human brain and examines why we are so prone to making poor judgements and, consequently, bad decisions. The book is taught in business schools around the world. In the mids, Kahneman changed the way we thought about thinking. With his friend Amos Tversky, Kahneman explained that the brain creates cognitive shortcuts to resolve problems. Kahneman outlines the System 1 fast and System 2 slow thinking modes of the human brain and explains how we use heuristics to aid decision-making. Availability heuristics help us to process the likelihood of an event occurring based on our recall.
It was the winner of the National Academies Communication Award for best creative work that helps the public understanding of topics in behavioral science , engineering and medicine. The book summarizes research that Kahneman conducted over decades, often in collaboration with Amos Tversky. The central thesis is a dichotomy between two modes of thought : "System 1" is fast, instinctive and emotional ; "System 2" is slower, more deliberative , and more logical. The book delineates cognitive biases associated with each type of thinking, starting with Kahneman's own research on loss aversion. From framing choices to people's tendency to replace a difficult question with one which is easy to answer, the book highlights several decades of academic research to suggest that people place too much confidence in human judgement.
I've read books in the past four years. Some were awful. Others were incredible. But I took notes on all of them. I've never known what to do with these notes. Then I got an idea: I'll dump some of the highlights into a weekly article.