Thinking fast and slow: Conclusions

Following the schedule of our Reading Calendar

In this conclusion, system 2 is presented as “fictious Econs, who live in the land of theory” while system 1 is “real human beings”. However, the the real, experiencing self is both system 1 and system 2. Most of this final chapter is a development of that idea: humans are both system 1 and system 2.

This final chapter works more like a “future research” ending remarks on an academic journal paper than applications for living a better life, which is a pity.

Two selves

The main bias here is how we neglect duration and value more “a short period of intense joy over a long period of moderate happiness” which lead us to make unwise decisions on how to live our live, missing opportunities for a long happy period if there might be a poor ending. However, the stories we tell ourselves about our lives also matter, so any policy aiming at improving the citizens of a country wellbeing should consider both.

Econs and Humans

Here Kahneman discusses the idea of rationality itself and point out how divergent is the common sense interpretation of rationality versus the idea of it that economists have. Here lies the more relevant contributions of Kahneman’s work: to point out how mislead economics is and all the different things that need to be considered in order to make economics a little more realistic, considering real human beings and not mathematical abstractions.

Let me quote Kahneman on the subject:

“I often cringe when my work with Amos is credited with demonstrating that human choices are irrational, when in fact our research only showed that Humans are not well described by the rational-agent model”

That doesn’t mean that humans do not need any help and our decisions are perfect. In the following pages, things get a little more interesting as Kahneman gets political and states how a libertarian vision of human beings, as put forward by the Chicago School of Economics is basicly flawed, as it is based in such a limited and non realistic view of rationality.

Instead a behavioral school of economics will point out of the need of a state regulation to equalize mistakes people make due to the biases described in the book. The Chicago School of Economics does not face such a problem, because they believe in a mythical rational human being that can’t be found in the real world.

Kahneman is not completely clear about his own beliefs, but he seems to favor some sort of “nudge” program in which citizens are nudged to take the “best option” for them by making it the default.  Therefore the state has two main roles against biases: first to guarantee that “best options” are offered by default and second to protect humans from con artists that may use biases in order to exploit our weaknesses.

This is a very relevant dicussion, a key one, and I wish that Kahneman had devoted more time to it, instead of bugging us to death with lab experiments.

Two Systems

Here Kahneman develops the main idea of this conclusion, how humans are very complex and fascinating mixture of system 1 and system 2, and gives a more fair description of system 1 and how our intuition, besides of being a source of biases, is also the responsible of lots of things we do rightly and effortlessly. However sometimes it does very wrong things, and we have to be aware of it.

This section looks mostly like a way of distancing himself from Gigerenzer view of “bounded rationality”, done in a oblique way stating that “the heuristic answer is not necessarily simpler or more frugal” playing with Gigerenzer’s paper (and book) “Fast and Frugal Heuristics”.

When considering the applications of all this knowledge in our daily life, Kahneman is -fortunately- very realistic. It is very difficult to change the way System 1 behaves. We have to put a lot of effort into it.

The main mechanism for detect such biases is simple, we have to recognize that our mind is trying a shortcut to solve a very complex problem, slow down and bring on System 2 to make a more detailed analysis of the problem.

But this is not easy, as  Kahneman states:

Except for some effects that I attribute mostly to age, my intuitive thinking is just as prone to overconfidence, extreme predictions and the planning fallacy as it was beofre I made a study of these issues.

And this is because:

The voice of reason may be much fainter than the loud and clear voice of an erroneous intuition, and questioning your intuitions is unpleasant when you face the stress of a big decision. More doubt is the last thing you want when you are in trouble.

Other tools than can helpful

  • Organizations making decisions instead of indidivuals, as they have to think and process decisions more slowly
  • To have  a richer language so we can label errors and biases in a more detailed manner.

Like humans beings, this book is a peculiar mix of system 1 and system 2, good, helpful intuitions on how humans see the world, and boring academic discussions that are only relevant to other academics. It is not the best book I’ve ever read, and certainly not the most entertaining one, but I’ve learned quite a lot things about how other people and myself take decisions and analyze the world, and overall I am happy to have read it.



Thinking, Fast and Slow. 38 Thinking About Live

Following the schedule of our Reading Calendar

Well, well, well, we came to the last chapter of the book (Only the conclusions chapter left). I personally have to say that this book has taught me what mental depletion means. In a practical way.

The chapter begins bringing us hope. It begins with a chart about marriage happiness and, for a moment, I thought that we will be given behavioral based marital advice. But not, the chart is used only to illustrate theoretical points already presented in the book, basically that we substitute particular thoughts for a general evaluation when considering our general satisfaction with life. That married and non married people are similarly happy. It is simply that recently married people “think” that they are happier.

This is such an weird way of thinking that Kahneman himself begins to realize it and talks about a “hybrid approach”. What do you exactly mean by “someone thinks that he is happy but he is not”? I understand the mechanical definition of it but it still smells weird. Perceived satisfaction with life, which can be relative to our goals, character, biases, etc, is a very real reality in our minds.

From this point on, we talk about happiness. First we are told that is genetically based. That there are people happier than others in the same circumstances. We all new that.

Then we center in the focusing illusion and its part in the now well known limitations that we humans have in make predictions about our future emotional states. This is a real source of disappointment and incorrect planning in life and it should be taken into account very seriously. Avoiding or weakening the power of “miswanting” is something we should work at in our lives.

However to go to a guy with a colostomy who declares that he would do everything to get rid of it and try to convince him, using actual experience tests of his life, that he is not at all unhappy, is going to prove complicated.

And since this is the last chapter I will review: Mister Kanheman, how could you write such a BORING book with so many interesting things to say is something that future generations will study in humanities departments.


Thinking Fast and slow: 37 Experienced Well Being

Following the schedule of our Reading Calendar

In this chapter Kahneman revises our idea of well being, based on the idea of flow, developed by psychologist Mihaly Csikszentmihalyi. The main idea is to substitute the idea of a “general well being” which is clearly too ambiguous to be of any help, by the idea of “experienced well being” making people to recall their experiences in a given day (Day Reconstruction Method or DRM).

The main aim of this chapter is to argue for this “experienced well being” as a better way to mesure well being and inform policies in order to assure a better well being of citizens.

The results described are not very espectacular. Some of them are common sense: suffering is unevenly distributed and some people seem to have no worries in a whole day while other people spend most of their time in emotional distress and pain. Active hobbies are better than passive leisure like watching TV. Having children generates more stress but produce a higher life evaluation. Some are a little less evident, like the fact that people with better education tend to report higher stress, or that religion does not help to reduce depression or worry. Severe poverty also amplifies bad effects, beyond the mere economical facts, and illness has a more negative effect in people under extreme poverty.

Probably, the most quoted and surprising result is how experienced well being grows with salary but only to a point. When you pass the $ 75.000 income in high cost areas there is no relevant increase in experienced well being. Money gives happiness, but only to a certain point. Then it is irrelevant for that.

When developing his studies, Kahneman used  DRM because  “Experience sampling is expensive and burdensome.” BUt now it is not anymore. You can design an app and ask thousands of volunteers to participate in a research on well being. This has actually been done in several experiments but results are quite similar to those obtained by Kahneman and his team, as far as I can tell.

Thinking, Fast and Slow. 35 Two Selves

Following the schedule of our Reading Calendar

This chapter presents a curious bias. Our memories of past experiences do not correspond exactly to what we actually were experiencing while living them but are essentially focused on the the maximal intensities of pain/pleasure and the final moments of the experience. The total duration is neglected. The result of this is a contradiction between the self reported level of pain/pleasure when currently undergoing the experience and the memory that we have of it afterwards.

And this has a very powerful consequence. Since we will be making future decisions based on our memories of past events (we do not have any other information to resort to), in the case of discrepancies between the “experienced” and the “remembered”, we are going to take erroneous decisions. That is, we will choose options that will provide less pleasure/more pain than the alternatives. Take that, homo economicous!

Isn’t it funny?