How often do you trust your Intuition? Do you think it is always fruitful or optimal to follow your gut? I mean just think about it, more often than not, we are constantly under the play of cognitive biases that control our thought process.
Hello Readers, Welcome back to this book review, where I handpick the greatest books in the world on personal growth, business, and self-development anything that is going to help us take control of our life and elevate it to the next level. In today’s book review, we are going to explore a phenomenal book “Thinking Fast and Slow” by Daniel Kahneman. We will discover how always following our gut and intuition can be counter-productive and comprehend different types of biases that can control our thought process.
This book is on Behavioral Psychology and Decision-Making, summarizing the research conducted by author Daniel Kahneman in collaboration with Amos Tsuki, another inspiring personality. Daniel Kahneman is an Israeli American psychologist and economist, remarkably known for his work done in psychology and decision-making as well as behavioral economics. Daniel Kahneman was awarded the Nobel Memorial Prize in 2002 for his work in economics science.
Books like “Thinking Fast and Slow” to be honest are kind of daunting, it is no light read that you can pick up while you rock your baby to sleep or try to read it to them or even enjoy it when the baby does fall asleep! I mean it is 400 pages of dense reading accompanied by several scientific pieces of literature. It is one of those books, which demands intense focus and deep reading! Nevertheless, I have tried to encapsulate the essence of the book into 8 big highlights. This blog gives you a condensed version of the 400 pages into 8 big highlights that can help us take concrete action to enhance our lives.
8 Best Highlights from Thinking Fast & Slow by Daniel Kahneman
Highlight 1 – The Breakdown of our Two Systems
Well, the central premise in the book is the dichotomy between the 2 modes of thought. Daniel Kahneman says our brain pretty much switches between on and off-state! We have two systems that control our entire thought process thereby controlling our lives.
The first system is more instinctive, emotional, sort of like an automatic system. It is referred to as the fast system also called the sympathetic nervous system. Something that is wired into us! You see our brain is designed to keep us alive and make us survive. Yes, it is part of our nature and it is great since it has kept us alive for so long. However, there is a downside to it as well! The fast system forbids us to think logically about any incident and forces us to react to the first emotion that we feel. Scientifically speaking we are constantly going under hyper-aware sympathetic dominance, therefore, fast-thinking we generally skip the things that really matter to us. During the evolution of humans, sure fast system was part of the brain that helped us to put ourselves at the top of the food chain. However, the slow system was the reason for humans to flourish in the last couple of centuries. Daniel Kahneman explains that the slow system is slower, deliberate, and more rational which compels to look for logic in order to act appropriately.
We have to be cognizant and consciously use a slow system in order to push it past the fast system. You need to tap into the slow system if you want to source your decision from the truest, most rational, and highest form of ourselves. This second slow system helps us to be present in life as well as guides us to slow ourselves to comprehend the meaning of being better, thereby helping us to control our lives.
Highlight 2- Availability
One of the most common fallacy, we all fall into is forming judgments from information that is repeated in front of us the majority of the time. More available that information is to us more we think that it is likely to happen. However, reality can be completely different; either it can be disproportionately common or disproportionately uncommon. For instance, we see people getting murdered or committing suicide in the news. However, the science of availability says that just because that part of the news is most talked about, we can recall it since it is at the top of our heads. However, it doesn’t mean it is going true. Essentially, just because we see that particular information everywhere like in news, in movies, in articles, or in conversation while having tea with our family we feel that the probability of that information actually happening is very high. However, the science of availability doesn’t really mean it will be happening left, right, and center.
Highlight 3- Peak and End Rule
Author Daniel Kahneman explains that we don’t remember the entire experience rather a few noticeable highlights from those experiences. For instance, consider a vacation you had three years ago or your entire five years of relationship. Do you remember every moment of it? If yes, think again!
It isn’t possible to remember every moment in real-time. This is because our brains categorize and store information in a three-part summary – The Beginning, The End, and The Peak Experience. Essentially, that is the reason why you can know how it all started as well as how it ended and you can recall peaks and valleys in between the beginning and end. Now, when you think about those experiences you only can think about fun times or times when it was sad. Have you ever tried to recreate those peak experiences and then think to yourself is it all there is to it? You realize that on recreating those peaks it loses its possessions. Fast systems like to store everything in the form of snapshots and categorize our experience into these bytes size chunks that flash in front of us as soon we think about those experiences. However, if you dig deeper the slow system takes over and helps us remember the whole experience one where we want that phase to pass when we were living it because of pain that we now have forgotten. The crux being we can’t suck our happiness away today from our misconstrued and incomplete version of what happened in the past.
Highlight 4 – Endowment Effect
Author Daniel Kahneman explains the Endowment Effect with research he performed on a bunch of college students. He gave a group of random students a coffee mug and then ask them how much are they willing to sell the mug for? To another group of random students, he asked whether they would like to have the coffee mug or money equivalent to the value of the mug. Let’s call the first group “Sellers” and the second group “Choosers”. When the author asked the Seller group the value of the mug for which they would sell it, they answered that mug should be sold at a price of $7.12. However, when the same question was asked to the Chooser group who didn’t own the mug or didn’t have any emotional attachment for the mug they priced it at $3.12. Yeah! Same mug, slightly different point of view but drastically different perceived value. The fact being, we overvalue what we own and invest in and automatically undervalue the other.
We think something is worth more only because it’s ours and get trapped in the past and likely to maintain the status quo. It is best if you have a close friend, a family member, or partner, a mentor who is able to really sit down with you and if you ask them what do I really have to work on they will give you honest answers.
Highlight 5 – Framing
One of the most common biases that creeps into our head while we make judgments or decide on certain actions. It actually works because our brain – system 1 primarily fixate on the frame of events and the way information is presented in front of us.
This bias arises when people make different choices based on how a decision problem is presented in front of us or how it is interpreted by us. Perhaps the best way I would say to deal with this bias is to change your perspective and look at it from different angles.
Highlight 6 – Loss Aversion
After a decade of research, author Daniel Kahneman says losses loom larger than gains. In fact, his research shows that an average person will psychologically weigh his losses more than his gains. Kind of bias that points to our inclination towards fear of losing anything. According to this bias, we work much harder not to lose something than we will gain something. This is why change is hard and making a move sucks sometimes. We can be in the same job that doesn’t fulfill us yet we stick to it. By default, it is easier to just say there and get complacent in our life. However, we need to stop settling and start living so that we can maximize what we are able to do. The best way of making the past loss of aversion bias is how we get significant growth. Continue to push yourself, keep striving for new things, and push yourself towards plans. If u keep doing what u have always done then u will get something u something u already got
Highlight 7 – Sunk Cost
Sometimes we have invested so many resources, energy, time, money, and effort that it is difficult to leave it. Instead of leaving it, since it is not working, we continue to throw more money, time, and effort. Sunk costs are the reasons I have so many shoes in my closet.
I have not thrown those always since they are very expensive. It is actually the fear that if we quit now, every single ounce of energy, money, and time that we have invested will be wasted. It is easier to justify by investing more money, more time, and more energy than it is to cut our losses. As they rightly say, “know when to hold them, know when to fold them”. The sunk cost is part of the ways where the fast system of the brain hijacks our optimism and forces us to stay in the things that aren’t sincerely serving us
Highlight 8 – Slow Down
Now we know whatever we might think and perceive at first instance can be based on our existing biases resulting in decisions and judgments that might be inclined in a particular direction. Our fast system can color our judgment as well as cloud our ability of decision-making. If you want to break past this fast system that propels you to take actions that may be sub-optimal for you, here are few things that worked for me – Take a day off from your work and relax, do things that really interest you!
The main idea from the book is to comprehend your brain and its working and thought process. A lot of times we don’t understand why we do certain things or why do we judge others or jump to conclusions. So when we understand our fast system and slow system we realize why were are behaving in a certain way. We understand ourselves better, it can guard us against avoiding jumping to certain conclusions that you would have if you hadn’t read this book or my review. So, next time when you have a fast-thinking preference, slow down, and scan your faulty checking checklist!
That was the core message that I got from reading Thinking Fast and Slow by Daniel Kahneman
Hope it helps you as much it has helped me!
Kahneman, D. (2011). Thinking, fast and slow. New York: Farrar, Straus and Giroux.
If you are interested in investing in some good books like this one – You can find the book “Thinking Fast and Slow“ by Daniel Kahneman both Paperbook and Kindle version on Amazon