Thinking, Fast and Slow

Summary

A groundbreaking exploration of the two systems that drive the way we think: System 1 (fast, intuitive, emotional) and System 2 (slow, deliberate, logical). Kahneman reveals the cognitive biases that affect our judgment and decision-making.

Key Takeaways

- Two Systems: Our brain operates using two distinct systems - System 1 (automatic) and System 2 (effortful).

• Cognitive Biases: We are subject to numerous biases like anchoring, availability heuristic, and loss aversion.
• Prospect Theory: People value gains and losses differently, being more sensitive to losses than equivalent gains.
• Peak-End Rule: We judge experiences based on how they felt at their peak and at their end, not the average.
• Planning Fallacy: We consistently underestimate the time, costs, and risks of future actions.

Quotes

> "Nothing in life is as important as you think it is, while you are thinking about it."

> "A reliable way to make people believe in falsehoods is frequent repetition, because familiarity is not easily distinguished from truth."

> "The idea that the future is unpredictable is undermined every day by the ease with which the past is explained."

Application

I've become more aware of my own cognitive biases, particularly the planning fallacy. I now add buffer time to my project estimates and try to consult the "outside view" by looking at how long similar projects have taken in the past.