Reviewed in the United States 🇺🇸 on January 14, 2012
A scientist's look at how we think
Review of Kahneman's Thinking, fast and slow by Paul F. Ross
A friend called Kahneman's book to my attention. I purchased it immediately and put it at the top of my stack of "to be read" books. Having finished the read just a day ago, writing my impressions immediately is important to catching the details of my observations, the yin and yang of this book. The work, indeed, captures my high interest. Kahneman, psychologist at Princeton University, is known for his work on understanding people as they interact with "the economy," work Kahneman did in concert with Amos Tversky. The work won the 2002 Nobel prize in economics for having persuaded economists that humans, contrary to the assumptions long a part of economists' theories of people as economic actors, do _____________________________________________________________________________________
Kahneman, Daniel Thinking, fast and slow 2011, Farrar, Straus and Giroux, New York NY, vi + 499 pages
not always consider all the information available to them and make choices in their own individual best interests with respect to wealth. The difference between Econs and Humans, these labels adopted from today's economist Richard Thaler, is one of the continuing themes of Kahneman's story. Daniel Bernoulli (d. 1782, he and Adam Smith working at the same time ... there being not a single reference in Kahneman to Adam Smith) proposed that people make their economic choices so as to maximize the decision-maker's own wealth. Kahneman sees too many economists today, including several from the highly regarded (University of) Chicago School, as accepting this erroneous view of economic actors (as Econs) and failing to understand that people (as Humans) are influenced in their choices by many circumstances well beyond the decision's outcome as it affects the decision-maker's wealth. This book is Kahneman's explanation for the general reader about the work which won the Nobel prize.
In thirty nine chapters divided into five parts, Kahneman makes distinctions between Econs and Humans, between associative memory that thinks fast using simplified relationships (he calls it System 1) and analytical mental processes which think slowly and, prodded into doing work, can cope with complexity (he calls it System 2), between heuristics and biases in thinking, between choices as Econs make choices and choices as Humans make choices, between the influence of the decision's frame and the details of the choice itself, between broadly framed decision-making and narrowly focused decision-making. The publisher reprints as appendices the 1974 paper in Science by Tversky and Kahneman (Judgment under uncertainty: heuristics and biases) and the 1984 paper in American Psychologist by Kahneman and Tversky (Choices, values, and frames) which were key steps in winning widespread recognition for their work. "Prospect theory," described in their 1984 paper, was a step in their thinking that showed the sharp distinction Humans make between gains and losses. Kahneman and Tversky can be classified among the behavioral economists who do experiments with people in choice-making exercises to uncover the regularities and irregularities in, the influences upon, peoples' decisions.
I thoroughly enjoy this work by Kahneman (Tversky died in 1996) especially because it shows so distinctly the observed-in-experiments, evidence-based foundations for psychology and psychology's claim to understanding human behavior. I enthusiastically recommend the read for those thoughtfully interested in people and people-effects on our individual lives as well as our shared lives in organizations, governments, and cultures. Walk up and down the aisles of the local large bookstore looking for psychology and one finds self help books that present "ways to think about" our lives, implying by their very structure and presentation that all one needs to do to understand self and others is to take thought. That's pure nonsense, yet that's the modal view - actually it's almost the only view - of how psychological science gets built. For those willing to read the footnotes, Kahneman thoroughly undoes this view. Psychology, as all psychologists should know, is built upon empirical investigations of human behavior. It is something of a bitter joke that it should take two psychologists to persuade economists that human beings make economic decisions using inputs well beyond the wealth-maximizing rule posited by Bernoulli in the 18th century. Yet, as Kahneman states so clearly in his chapter titled Conclusions, there are still many economists who continue to use the Econ model of the human being as the individual economic actor. The subject of economics is taught in universities with Econ as the decision-making universal actor for all humankind. The Econ model is simply incomplete as a model for the individual actor and obviously even has its difficulties in accurately forecasting group behavior as we are learning through hard lessons in our inadequately understood attempts in Keynesian economics following the 2008-2009 economic downturn, efforts we make as we grope for economic recovery.
Begin reading Kahneman's book by first reading the chapter on Conclusions, the last in the book. While that may prove a bit difficult because of the unfamiliar concepts presented as key words or phrases (Econs, Humans, System 1, System 2, prospect theory, utility theory, etc. etc.), the reader can quickly learn some of the handles that Kahneman uses and, particularly, the view of politics and society from which he thinks and writes. Then, of course, read the Conclusions again as you finish the book.
Very much admiring this work by the behavioral economists and by the neurobiologists in exploring human behavior with respect to economic choices, I'm also critical. Psychologists and thoughtful readers need to know not only the achievements of this work but also its shortfalls ... thus perhaps avoiding frustrations in the reading and errors of overgeneralization for the findings.
First, one of the rules of science is that it seek the simplest possible explanations for the phenomena being explored. Kahneman has the difficult task of speaking from and to both psychological and economics backgrounds, sometimes also adding neuroscience. In taking on that task, he refers to concepts and data from all three disciplines. Sometimes the concepts are closely related, almost duplicates. Needing to communicate with two or three highly specialized audiences, Kahneman uses the several terminologies and offers the reader no charts or tables listing, classifying, and simplifying the concepts. A tour through the book's index turns up ...
affect heuristic, anchoring index, associative coherence, associative memory, availability cascades, baseline predictions, base rates, broad framing, broken-leg rule, causal base rates, causal stereotypes, cognitive ease, cognitive illusion, cognitive strain, coherence, competition neglect, confirmation bias, conjunction fallacy, decision utility, decision weights, decorrelated errors, default options, disposition effect, duration neglect, duration weighting, econs, ego depletion, emotional coherence, endowment effect, evaluability hypothesis, expectation principle, expected utility theory, experienced utility, flowers syllogism, focusing illusion, fourfold pattern, halo effect, happiness, hedonimeter, hubris hypothesis, ideomotor effect, indifference map, joint evaluations, judgment heuristics, law of small numbers, less-is-more pattern, loss aversion, loss aversion ratio, mental shotgun, narrative fallacy, narrow framing, negativity dominance, neuroeconomics, norm theory, one-sided evidence, optimistic bias, outcome bias, peak-end rule, planning fallacy, possibility effect, precautionary principle, preference reversals, pretentiousness language, priming, probability neglect, professional stereotypes, prospect theory, psychopathic charm, rational-agent model, reciprocal priming, recognition-primed decision, reference class forecasting, retrievability of instances, risk assessment, risk aversion, risk seeking, selves, single evaluations, somatic marker hypothesis, structured settlements, sum-like variables, sunk-cost fallacy, System 1, System 2, theory-induced blindness, utility theory, validity, vividness, wealth, well-being, WYSIATI
... and this is indeed a complex mapping of what is intended to be a joined and simplified configuration explaining human thinking particularly as it is exercised in decisions about economic choices. I respect Kahneman's intent. His characterization of System 1 and System 2 is an important and simplified communication. I think he could do an even better job at simplifying what he is teaching, particularly by using tables and other means for classifying, grouping, his concepts. Of course, other bright people have similar problems. The physicists have their Standard Model of seventeen particles and forces classified as fermions and bosons, quarks and leptons, and that is not simple enough to allow the rest of us to keep firmly in mind what these seventeen particles-forces and several classifications mean ... nor does it explain mass, astronomy's dark matter, or even gravity! Communicating science simply often is no easy task. However it is an essential task if science is to have any use beyond mental stimulation. This reader demands that science, in its most valuable form, be useful. Communicating science simply is a task that must be mastered on the way to making one's science maximally useful.
Kahneman, as do the behavioral economists generally, is reporting experiments that have been run, primarily, with college students as participants ... and not even with a representative group of college students. They come heavily from UC Berkeley, U of Oregon, Michigan U ... very selective places where Kahneman and Tversky have taught and their graduate students have done work in the mode of their teachers. A few years ago I entered a conversation with a respected colleague, a colleague much better informed than am I on these matters, at The Ohio State University. "Psychology built upon studies with college sophomores must be questioned," I insisted. "Not so," he responded. "The work frequently generalizes well to the general population." The work Kahneman highlights so well in this book is work built heavily upon experiments run with college students as the participants. Despite these assurances from very able scholars, I cannot brush from my memory the very impressive account that Herrnstein and Murray (1994) presented in their controversial The bell curve which followed a representative cohort of American youth through a rather lengthy part of their life span (maybe age 12 to age 42 ... I don't recall accurately and, as I write now, am setting aside the task of looking it up). The work showed that life as experienced by youth at the high end of the bell curve on intelligence was a very, very different experience from life experienced by youth at the low end. Those at the low end seemed to find life a blooming, buzzing confusion and they got into lots of trouble. Their minds worked differently from the minds of their peers who found themselves to be college eligible and, in many instances, got that education. The evidence was overwhelmingly clear in life's outcomes (current income, marriage, need for and use of social support networks, use of drugs, crime rates, divorce, time in jail, . . .). The people in this longitudinal study had not yet reached the ends of their lives! Having taken the Herrnstein and Murray findings to heart, I think I might be relatively safe in transferring what I learn in Kahneman's book to the professionals and executives I have met in working with organizational leaders, but I'm still not convinced, despite my colleague's assurance from his superior and more current knowledge, that findings learned with college students as the participants can be assumed to be true for all human beings.
The behavioral and management sciences (psychology and economics included) receive a tiny fraction of the world's R&D funding. They are regarded by the college educated populations of the world as second class sciences, at best, and probably not sciences at all. Kahneman's book is a stout statement very much, and appropriately, in the face of this non-knowledge. But to win public support and public funding, to have what is known by these sciences at work in reducing problems that the world faces every day, to see these sciences contribute practices that enhance human well-being, it is absolutely essential that what the sciences know be communicated to opinion leaders - those who escaped college without having learned much about these sciences - in a way that is accurate, clear, and understandable. As shown by the list of ideas from the index of Kahneman's book, I think Kahneman has not yet formed the clearest and most communicable framework for his core ideas and that he, like the rest of us, needs to spend more time practicing communication with able people (non-scientist students and adults) and converting what he learns into written form. Our behavioral and management sciences have much they already know that could significantly relieve problems and add immensely to well-being. Accomplishing those prospective outcomes depends upon us scientists communicating what we know to audiences like those Kahneman is addressing in this book.
Read this book. You'll find you've profited.
19 December 2011
Herrnstein, Richard J. and Murray, Charles The bell curve: Intelligence and class structure in American life 1994, The Free Press, New York NY
Kahneman, Daniel Thinking, fast and slow 2011, Farrar, Straus and Giroux, New York NY
Copyright (c) 2011 by Paul F. Ross All rights reserved.