28 July 2013

Thinking, Fast and Slow

I've just recently finished reading an amazing book, which I would like to recommend to you. It is by a psychologist named Daniel Kahneman, who was awarded the 2002 Nobel Prize.

In Economics.


It's called "Thinking, Fast and Slow."

The book looks at how humans make decisions, and presents fairly conclusive evidence that we use calm, objective, rational, self-interested thinking to make AN EXTREMELY SMALL portion of our judgments, decisions and choices. Rather than our rational self being the "one in charge except during my emotional moments," it seems that our decisions are largely determined by the twenty or so "cognitive biases" that Kahneman identifies and describes and of which he provides (what appears to be solid) scientific evidence and clear examples. It happened numerous times during my reading of the book that I laughed and shook my head as I recognized the behavior he was describing—one of the cognitive biases at work—as a frequent winner in my own decision-making process.

I can't really afford to purchase a copy of the book for everybody I know, or even for my devoted blog readers, nor would I want to burden everybody with something they may not want to read. But I was really REALLY impressed with this book and strongly recommend it to anybody who is interested in (a) how we make decisions, and (b) why the theory of the rational decision maker—which is a foundational concept of modern economics—is basically crap.

HOWEVER, despite this strong recommendation from me, I realize that you probably won't read the book, if only because of its 500 or so pages. So here's the next best thing: a pretty good and in-depth good book review by Mr. Jim Holt of the New York Times, published in November 2011.

If you find the subject of this blog interesting, then by all means, rush to wherever you buy books; it's only $8.50 plus shipping on Amazon. Failing that, at least read Mr. Holt's review.

You're welcome.


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