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Thinking, Fast and Slow by Daniel Kahneman

Think Clearly Blog

A blog about thinking clearly and other things that interest me

Thinking, Fast and Slow by Daniel Kahneman

Greg Laugero

Central Argument

Kahneman argues that our thinking is controlled by two "systems." System 1 is intuitive, associative, fast and largely in control of our decision making process -- more than we know. System 2 is deliberative, logical, slow and must be called into action as a check to System 1. System 2 is fundamentally "lazy" and will defer to System 1 unless we take steps to actively bring it to life for any given decision. 

Key Concepts

System 1

Thought processes that are intuitive, associative, emotional. It "operates automatically and quickly, with little or no effort and no sense of voluntary control" (20). System 1 is where out biases live and it is particularly good at hiding those biases from System 2. 

System 1 is at work in the following exercise: 

A bat and ball cost $1.10.
The bat costs one dollar more than the ball. 
How much does the ball cost?

If 10 cents came immediately to mind, then System 1 dominated your thinking. The correct answer is 5 cents, which would be discovered by kicking in System 2. 

System 2

Thought processes that are deliberative, rational, and orderly make up System 2. It is a "controller" for System 1, but it is fundamentally "lazy." It needs effort and queues to come into play. In the bat and ball example above, if you slowed down and thought, "This is a trick question," then System 2 exerted its control over System 1. It surely didn't prevent "10 cents" from popping into your head immediately. System 2 doesn't stop System 1 from functioning; rather it's a check on System 1 intuitions. 

Takeaways

We need to train our System 2 thinking to kick in when appropriate. 

We can use concepts like System 1 and System 2 to label the type of thinking that is driving any given business decision.

This is not to say that System 1 is "bad" and System 2 is "good." Rather, System 1 can be very effective, especially in creative industries, in making new connections and driving innovations. 

It's easier to see System 1 dominance in others than in ourselves.

We often think that System 2 is in charge, when it really isn't. 

System 1 feels good and is creative and innovative, but it is also very "gullible." It needs System 2 as a check to gullibility.

System 2 is difficult, suspicious, and requires effort. This can make it challenging to invoke System 2 when necessary.  

Who should read this?

Any leader who wants to improve his or her ability to understand the source of errors of judgement -- in themselves and others

Any board member or advisor that wants to provide a System 2 check on organizational decision making

Quotes