Analysis Of Kahneman 's Thinking, Fast And Slow Essay

760 Words Nov 2nd, 2015 4 Pages
I plan to write my essay on Kahneman’s Thinking, Fast and Slow, which examines how the brain’s meager grasp of statistics can lead to poor choices. Kahneman essentially separates the brain into two parts: System 1, which makes quick, intuitive assessments based on associative memories, and System 2, which deals with more involved decisions. The inherent laziness of System 2, a function of its limited resources, leads the brain to make often-inaccurate judgements – especially in the realms of logic, probability, and causation.

Of course, the two systems typically work well together, at least from an evolutionary perspective. Defaulting to System 1 not only allowed our ancestors to run away from hungry predators, but it also gives modern humans the courage to ask their romantic interests out. Nevertheless, the dichotomy between the two Systems has led humans to what traditional economic theory might call “irrational” behavior – particularly when framing the same problem in different ways leads to different decisions.

Because of System 1’s power, typically “wise” people may make “unwise” choices when faced with numbers or small probabilities. (Indeed, Kahneman won a Nobel Prize in Economics for elucidating Prospect Theory, which explains why people treat unlikely events disproportionately – particularly when large losses are involved.) Yet as economist Richard Thaler notes in his 2008 book Nudge, institutions like the government can actually use the brain’s laziness to…

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