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Thinking Beyond Fast and Slow
Thinking, Fast and Slow
By Daniel Kahneman
Farrar, Straus and Giroux, 2011; 512 pp., $30 (cloth)
Reviewed by JOHN TARRANT
Daniel Kahneman’s bestselling Thinking, Fast and Slow is
a gallery of the built-in biases and strategies of the mind. We might
call them the delusions that we come by honestly, just by having a
is a psychologist who won the Nobel Prize for economics. His
experiments in decision-making theory, with his colleague Amos Tversky,
have influenced everything from baseball (the movie Moneyball tells that story) to stock-picking to the graphical user experience in browsers.
asks questions about how we decide things. They’re often things to do
with numbers, such as salary negotiations or financial gambles. At
bottom he’s always wondering how to observe and think clearly. His
gallery of illusions and delusions is a typology with easily
identifiable names such as confirmation bias, in which the mind searches only for confirming evidence of, say, weapons of mass destruction in Iraq; or the illusion of understanding,
in which a coherent story gives us the impression that we understand a
situation when we don’t (what happened in Prague will happen in Baghdad,
and after the changeover, Iraq will choose democracy and peace). Such
mental processes are not intrinsically flawed; they are heuristics—rules
of thumb, stereotypes, shortcuts. They are strategies the mind adopts
to find a path in a tsunami of data.
was wondering about Kahneman’s own thread through all the data, until
Madonna’s halftime song at the Super Bowl. She seemed to be playing to
Lady Gaga or at least to herself at thirty. “Eureka,” I said. “It’s
about loss aversion.” Then I found a sample of my own life in Kahneman’s gallery.
The Endowment Effect
been rebuilding my house and bought a fancy red window at a door and
window boneyard. It was at the limit of what I wanted to pay. That
afternoon a contractor called me, wanting just that window. “I’ll give
you double what you paid.” “I’ll think about it,” I said. He called
later and offered more than triple. “No,” I said, “I have plans for that
window.” The window was barely worth $400 to me when I bought it, but
soon after, I wouldn’t sell it for more than triple that amount.
a trading point of view this was ridiculous; the reason I was in the
boneyard in the first place was to save money. But suddenly I wasn’t a
trader; I was superglued to my window. Kahneman calls this the endowment effect.
If I don’t yet have the window, I’m risking money to buy it, and I’m
cautious. But when I have the window, caution works the other way. It
has become precious, and I don’t want to lose my identity as the proud
owner of a custom-made window. This is a specific example of loss
the same way, Smith Corona, the innovative manufacturer of typewriters,
dropped an alliance with a computer company, Acer. It was 1995 and they
didn’t want to lose any of their typewriter business. Smith Corona went
bankrupt. Acer didn’t.
Can We Dodge That Bit About Suffering?
Buddhism is deeply interested in answering the question “Why do we suffer and can we escape from suffering?”
traditional Buddhist answer about suffering is that it helps to know
its causes. Every culture has a theory about that—it’s the SAT rating
for cultures. A culture that says we are unhappy because our neighbors
are barely human and must be punished gets a low grade on the test. A
culture that gets us to look within has a better shot at being both
enduring and fun, and Kahneman would like to help with that project. He
gives us a vocabulary for answering the age-old question “why?” in an
unaccustomed way—as an equation about loss.
escape suffering, we have to pay. The currency we hand over is our
familiar patterns and our idea of who we are. Anything painful in our
lives is tied up with the familiar. But we overvalue what we have and
won’t trade it for a new life. This is why people who begin meditating
are both excited and frightened about what they might find. Kahneman
points out that liking security and disliking loss are deep patterns
that affect most decisions.
might find it depressing that such biases are built into the mind, but
we suspected that anyway. You could instead find it liberating. There is
an innocence about what our DNA gave us and a nobility about the
attempt to see more clearly—our DNA gave us that too. There’s no blame.
It’s just, “This is so. This is what it is to be a human with the best
brains that our Darwin dollars could purchase for us.”