05 March 2019

5th March 1934 - Daniel Kahneman born

The Israeli-American psychologist Daniel Kahneman was born on 5th March 1934 and is notable for gaining a Nobel Prize in 2002 in Economics. He won it for his work on the psychology of judgement and decision-making, and its effect on economics. There is no Nobel Prize in Psychology so he is very rare in being a psychologist who got a Nobel Prize.

He is best known recently for his book Thinking Fast and Slow. He finds it helpful to divide how we think and make decisions into System 1 and System 2. System 1 is fast and intuitive. System 2 is more hard work and takes time to work things out. So you may see a picture of an angry face and immediately know the face is angry: that is System 1. You may see the sum 19 x 23: that takes time to work out and is system 2. Skills are learned and what was system 2 becomes system 1, like learning to drive,.

Most of the time System 1 is fine and works well but there are times when it can get things wrong. Kahneman uses the question. 'A bat and a ball cost £1.10 in total. The bat costs £1 more than the ball. How much does the ball cost?'

Many people have the tendency to think 10p. That is a system 1 immediate response. Some people will give that answer. Others will check their answer first, and use system 2. No! that cant be right. That would make £1.20 ... Then they work it out 5p.

System 1 thinking works well most of the time but sometimes leads us astray in ways that Daniel Kahneman shows are predictable. This led him to demonstrate in economics that decisions are not always rational but are biased by factors such as associations with what happened before. Ask the following questions in one order 'How Happy are you as a person?" and "How many dates have you had in the last month?" and there will be little correlation between the answers. But ask "How many dates have you had in the last month? and 'How Happy are you as a person?" and the answers become correlated. There is a cause and effect.

Thankyou to Wikipedia March 5 for the date.

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