Book Review “Thinking, Fast and Slow” Essay

I read the international bestseller Thinking, unfluctuating and Slow of Daniel Kahneman (Winner of the Nobel Prize) over the last 3-4 weeks. I think it is a very raise hold up and it is describing very critic onlyy the serviceman brain and mind, which gave me many insights into decision-making and errors we are doing automatically without noticing it every day. He is very a great deal talking active clay 1 and brass 2. form 1 is fast its intuitive, associative, metaphorical, automatic, impressionistic, and it keept be switched off. Its trading operations involve no sense of intentional control, but its the secret author of many of the choices and judgments you actualise and its the hero of Daniel Kahnemans book Thinking, Fast and Slow. System 2 is slow, deliberate, effortful. Its operations require attention.System 2 takes over, kind of unwillingly, when things get difficult. Its the conscious existence you call I, and one of Kahnemans master(prenominal) points is th at this is a mistake. Youre wrong to unwrap with System 2, for you are in addition and every bit and profoundly System 1. Kahneman compares System 2 to a supporting character who believes herself to be the lead actor and oft has gnomish idea of whats going on. System 2 is slothful, and tires easily so it normally accepts what System 1 tells it. Its often right to do so, because System 1 is for the most part pretty smashing at what it does its highly sharp to subtle environmental cues, signs of danger, and so on.It does, however, net a high price for speed. It loves to simplify, to need WYSIATI (what you see is all there is), correct as it gossips and embroiders and confabulates. Its hopelessly cock-a-hoop at the kind of statistical thought often required for good decisions, it jumps wildly to conclusions and its subject to a uncivilised suite of irrational biases and interference force (the halo effect, the Florida effect, framing effects, anchoring effects, the chit bias, outcome bias, hindsight bias, availability bias, the counselling illusion, and so on). Thousands of experiments have been conducted, right across the resistant board of human life, all to the akin general effect. We bustt inhabit who we are or what were like, we dont know what were authentically doing and we dont know why were doing it. Thats a System 1 exaggeration, for sure, but theres more truth in it than you can easily imagine. Judges think they make considered decisions about parole based rigorously on the situations of the case. It turns out (to simplify all slightly) that it is their blood-sugar levels really sitting in judgment.We also hugely underestimate the role of run a risk in life (this is again System 1s work). Analysis of the exertion of fund managers over the longer term proves conclusively that youd do notwithstanding as well if you entrusted your financial decisions to a monkey throwing darts at a board. There is a tremendously stiff illusion that sustains managers in their belief their results, when good, are the result of skill Kahneman explains how the illusion works. The fact remains that performance bonuses are awarded for luck, not skill. They might as well be handed out on the cuckold of a die theyre entirely un stillified. This may be why both(prenominal) banks now speak of retention bonuses quite an than performance bonuses, but the idea that retention bonuses are needed depends on the divided myth of skill, and since the myth is kn have got to be a myth, the system is profoundly fraudulent unless the dart-throwing monkeys are going to be cauterize in. In an experiment designed to taste the anchoring effect, highly experienced adjudicate were given a description of a shrinkage offence.They were then anchored to different poesy by being asked to roll a pair of dice that had been secretly rigid to produce only two totals leash or nine. Finally, they were asked whether the prison sentence for the s hoplifting offence should be greater or fewer, in months, than the total showing on the dice. Normally the judges would have do extremely similar judgments, but those who had just rolled nine proposed an second-rate of octad months while those who had rolled three proposed an average of only five months. All were unaware of the anchoring effect. The same goes for all of us, almost all the sequence. We think were smart were confident we wont be unconsciously swayed by the high rock price of a house.Were wrong. (Kahneman admits his own inability to counter some of these effects.) Were also hopelessly subject to the focusing illusion, which can be conveyed in one sentence Nothing in life is as important as you think it is when youre thinking about it. Whatever we focus on, it bulges in the disturb of our attention until we assume its role in our life as a whole is greater than it is. Daniel Kahneman won a Nobel measure for economics in 2002 and much of his time hes working in c oncert with Amos Tversky. Thinking, Fast and Slow has its roots in their joint work. It is an outstanding book, distinguished by beauty and clarity of detail, precision of presentation and gentleness of manner.