Thinking Fast and Slow

Author: Daniel Kahneman
Genre: non fiction, economics, psychology

Nobel laureate Kahneman’s book is essentially a summary of the work on decision making that he has done along with his long-time collaborator, Amos Tversky. If I were to describe this book in one word, I’d say that it is extremely insightful. A lot of the points that the author describes throughout the book seem trivial; but if understood completely they will forever change the way you think and prevent you from making a lot of commonly made mistakes.

The central argument made in the book is that intuitive guesses are generally biased. Although intuition is very helpful in many ways, the same biases can lead to the making of some wrong decisions as well. Kahneman warns that the overconfidence in intuitive guesses is ill founded and it is always better to stop and think for a while. He writes that we are not good intuitive statisticians; in fact, even the best in statistics fail when making an intuitive guess! This difficulty in thinking about statistics and probability causes many limitations, which affects the decisions we make; not only in daily life but also in the stock market, politics and at the executive levels of companies and that too by the experts in these fields.

The final part talks about a slightly different concept- how there are two selves within each one of us: an experiencing self and a remembering self. The differences between these two can cause a conflict between how we experience painful events versus how these events are recalled. The same also goes for pursuing happiness.

Personally, this is the second ‘economics’ book that I’m reading and I thoroughly enjoyed it. The writing is easily comprehensible and there is an easy flow from one chapter to another. The author has managed to convey his ideas very efficiently- with ample of examples and data but without making it boring. I did manage to learn quite a few things about decision making which are relevant in a lot of common situations as well.

I would highly recommend this book to anyone who wishes to have a mind blowing read!