How Daniel Kahneman Explains Cognitive Biases and Rational Decisions

A summary of Thinking Fast and Slow

Photo by Mukul Joshi on Unsplash

READ FULL STORY FOR FREE HERE

Daniel Kahneman, in his book titled Thinking, Fast & Slow, unveils how the human mind works by employing two systems — System 1 and System 2. System 1 is fast, intuitive, and emotional; System 2 is slower, more rational, more goal-oriented, and more logical. System 1 is the system we often use in everyday life. Because it operates quickly, System 1 is prone to bias and flawed reasoning, making it quite difficult for humans to be truly rational unless they are trained to be so.

“Sapiens do not operate using cold mathematical logic, but rather work using warm social logic. Sapiens are ruled by emotion.”

Yuval Noah Harari

In my opinion, Daniel Kahneman’s book offers the most accurate illustration of the paradox of knowledge: “The more you know, the more you realize you do not know.” After reading this book, I began to wonder whether democracy is still relevant, whether free markets still hold true, or if perhaps we should entrust all our tasks to robots — if so, where is humanity headed? Once science revealed that humans are prone to bias and are easily manipulated, I became increasingly skeptical of the current system. Democracy and free markets are based on the assumption that humans are rational beings who can be accountable for their choices. Perhaps these questions will answer themselves over time or as I read more. For now, these questions will remain in my mind until an undetermined time.

Two Systems That Drive Our Thinking

Daniel Kahneman explains that there are two systems driving the way our brain thinks. However, these systems are merely used to help us understand how the brain works; they do not correspond to specific regions in the brain.

System 1

We use System 1 in our everyday life — it is fast, intuitive, emotional, impulsive, and sometimes operates both consciously and unconsciously. Simply put, System 1 is employed when, for example, solving 2 + 2 without any extra effort because we already know the answer, or when absorbing light, simple information, such as watching a movie…