How a person estimates value and risks is all down to “loss aversion” and the “endowment effect.”.Since system 2 is slow and energy consuming, it’d be wise to involve it mostly when the stakes are high and when we’re about to make an important decision. Due to the fact that system 1 operates automatically, biases can be difficult to prevent.We distort reality due to our “hindsight bias,” which means realigning memories and past events with new information.We tend to seek reasons for random events, think rare incidents more likely than they are, and tell simple stories for complex reality while making our own experiences more important than they really are.If endorsed by System 2, those instinctive suggestions turn into beliefs and actions. System 1 automatically generates instinctive suggestions for System 2.System 2 requires focus and operates slowly and methodically with greater effort required.It kicks in without much effort, working automatically. System 1 makes fast instinctive judgments based on familiar patterns.We use 2 cognitive systems when thinking they work together, but they often clash with each other.Here are some key summary points from the book:
What are the main summary points of Thinking Fast & Slow? Who is the Author of Thinking Fast And Slow?ĭaniel Kahneman is an Israeli-American psychologist notable for his work on the psychology of judgment and decision-making, as well as behavioral economics, for which he was awarded the 2002 Nobel Memorial Prize in Economic Sciences (shared with Vernon L. From framing choices to people's tendency to replace a difficult question with one which is easy to answer, the book summarizes several decades of research to suggest that people have too much confidence in human judgment. The book delineates rational and non-rational motivations or triggers associated with each type of thinking process, and how they complement each other, starting with Kahneman's own research on loss aversion. Thinking Fast & Slow's main thesis is that there’s a dichotomy between two modes of thought: "System 1" is fast, instinctive, and emotional "System 2" is slower, more deliberative, and more logical. This is a summary review of Thinking Fast & Slow containing key details about the book.
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