Strategiq Corporation

By Daniel Kahneman

Lauded as the most influential book you’ll read this year, this best-seller claims to change the way you make decisions.

Using simple and practical techniques, psychologist Daniel Kahneman shows you how to slow down your thinking to make better choices at work, at home, and in everything you do.

He deconstructs our conscious and unconscious thought processes, shedding light on the mind tricks we play on ourselves, and our often-flawed human reasoning.

In part 1, the author demonstrates the fundamental psychology behind judgement and cognitive processing. The concept of how we perceive things using either fast thinking or slow thinking is referred to as:

The Two Systems

The Two Systems
System 1 – operates automatically and quickly, with little or no effort and no sense of voluntary control.
For example: perceiving distance between two objects, hearing a sound, or understanding simple sentences.

System 2 – allocates attention to the effortful mental activities that demand it, including complex computations.
For example: measuring exact distances, distinguishing sounds, or learning a new language.

These systems are widely used in psychology to differentiate between our innate animalistic impulses and skills; and our more involved mental processing abilities.

The principal understanding is that the operations of System 2 require fixed attention, and are disrupted when attention is drawn away. In other words, to perform them well, you should not try to multi-task too many complicated things at once. And when you’re intently absorbed by one particular thing, you are likely to not notice other things.

Various studies on the Two Systems have found we can be blind to the obvious, and we are also blind to our blindness. We let the illusions of what we want to see overshadow the logic of what really is.

Kahneman goes on to provide a more detailed account of how the Two Systems function.

Attention and effort

Experiments show there are many physical responses to mental stimuli. Muscle tension, increased heart rate, and pupil dilation being the leading contenders. It is easy to determine, therefore, when someone is engaged in demanding mental activity. The more challenging the task, the more heightened the physical response.

But when exposed to too much stimulation, the person will switch off, and their bodily functions will gradually return to normal. So, it also becomes apparent when they have given up or reached a solution.

Switching between two demanding tasks requires significant energy, especially when under pressure. Juggling too many mental activities at once under time restraints increases the speed of thought as a person tries to retain the information before it’s lost.

As you become skilled at a task, its demand for energy diminishes. People gravitate toward the least demanding course of action. We are inherently lazy, so the less energy an activity requires, the better.

The Lazy Controller

System 2 has a natural speed, expending as little energy as possible. It feels leisurely and pleasant, like a comfortable stroll. Thoughts flow slowly and effortlessly, and ideas and solutions arise freely.

When cognitive activity starts to pick up the pace, however, clarity of thought diminishes, and mental capacity becomes overburdened.

Task switching and sped-up mental work are not pleasurable, and people will avoid them where possible. Maintaining a coherent train of thought requires discipline and self-control. It’s incredibly easy to get distracted.

But some people are able to expend considerable effort for long periods without ado. Hungarian-American psychologist Mihaly Csikszentmihalyi refers to this state as flow. He describes it as:

“… effortless concentration so deep that they lose their sense of time, of themselves, of their problems.”

Self-control and cognitive effort are forms of mental work. System 1 has more influence on behaviour when System 2 is busy. When you are overloaded with mental activity, it’s easy to let your involuntary responses take control. That is – you make poor choices, and are prone to selfishness, sexism, and superficial judgements. It has the same effects as a few drinks or a sleepless night.

Self-control requires attention and effort.

The Associative Machine

System 1 has a happy knack of involuntarily making associations between 2 or more ideas. It’s called associative activation. That is:

Ideas that have been evoked trigger many other ideas, in a spreading cascade of activity in your brain.

It’s not just a lineal thought, and then another – one idea can activate a flurry of ideas at once, which then continuously stimulate more. Like ripples on a pond. Only a few of these ideas, however, will register in your conscious thought. The rest operate silently in your subconscious.

Memories and recognition of these ideas provoke automatic cognitive, emotional and physical responses. Thoughts do not just occur in the brain – they affect your whole system. And you can be influenced by things you don’t even realise are causing an effect. You are completely unaware.

A single thought primes you to respond in a particular way. It affects your behaviour without you consciously knowing why or how.

System 1 is the source of rapid and intuitive impulses that often become your choices and your actions.

Cognitive Ease

Your brain is continually computing and filtering. System 1 does this automatically to determine whether extra effort is required from System 2.

It works out whether a cognitive process is going to be easy or strained. Sometimes you can better deal with higher energy demands than at other times, depending on the circumstance or what mood you are in etc.

Ease creates casual, comfortable, superficial thinking. It is intuitive and creative, but also open to more errors.

Strain causes you to invest more effort, to be focused and less likely to make errors. In doing so, your creative and intuitive mind gets put on hold.

Ideas become more familiar and comfortable the more you experience them, and the more recently they are encountered. They become easier through repetition. Sometimes the exposure of a stimulus is subliminal; you are not even consciously aware of it.

Cognitive ease is associated with good feelings. Ideas are much more readily liked when they are familiar.

A Machine for Jumping to Conclusions

Jumping to conclusions saves time and effort if the situation is familiar. System 1 will happily take control of this one. If the scenario is not familiar, however, conclusion-jumping is a risky business. If System 2 does not step in to guide System 1, intuitive errors are probable. Uncertainty and conscious doubt are the domain of System 2 – which demands mental effort.

System 1 is very good at creating illusions based on what it wants to see, without conscious or logical thought.

How Judgements Happen

System 1 has evolved to provide a constant intuitive assessment of our internal and external environment. Our basic survival instincts let us know if we are facing any threats. Continuous judgements act as feedback on whether we should fight or take flight.

We associate safety and familiarity with good mood and cognitive ease.

The normal state of your mind is that you have intuitive feelings and opinions about almost everything that comes your way.

In part 2, the author looks at mental short cuts and biases.

The Anchoring Effect

We link our judgements with information we have already received, regardless of whether that information is correct or even relevant. The input that is offered anchors to our response, creating an instant bias.

Powerful anchoring effects are found in decisions that people make about money when considering how much they should contribute or spend. If shown a figure first, their outlay will more closely match that figure, than if they are shown nothing.

System 2 finds some information easier to retrieve, making it susceptible to the biasing influence of anchors. It’s why our decision making is often profoundly influenced by good media marketing.

More in-depth discussions on psychology studies and tested theorem complete the final chapters.

Kahneman delves further into how we make decisions based on probability and predicting outcome. He also details our tendency towards prejudice and stereotypical responses, and the see-saw between intuition and logic – the uneasy interactions between System 1 and System 2.

The author provides insight into how to tame our intuitive predictions for better results. He shows how and when we can trust our intuition.

In part 3, he holds a mirror to our propensity for overconfidence, highlighting the illusion of understanding. That is, we often think we know more than we do.

In the remaining chapters, Kahneman fully demonstrates his wealth of knowledge. If you’re passionate about the workings of the mind, this book provides you with a comprehensive guide to psychological discoveries and scientific data. An ambitious read, it presents a fascinating account of human nature and biology.

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