Joshua Wright's Reviews > Thinking, Fast and Slow

Despite the fact that he is a psychologist, Daniel Kahneman won a Nobel Prize in Economics for his work on cognitive biases. He worked with another psychologist, Amos Tversky, who would have shared the Nobel had he lived long enough. Together they proved that the traditional model of economics, based on the "rational human mind" was deeply flawed. Their work laid the foundation for Behavioral Economics and pointed out the many ways in which we fail often to act in a rational manner. Contrary to the traditional model, humans frequently make decisions that are not logical and counter to our own interests. We pay too much attention to how a question is framed instead of focusing on the information provided. Our minds remember large traumatic events such as plane crashes with ease and as a result, we tend to overestimate their frequency. We have a tendency to discount or misinterpret statistical data when some anecdotal information is also present.

Kahneman has been producing research papers for decades but this is his first book targeted to the general public. It is an excellent resource for anyone interested in learning how our minds work and how to make better decisions. He explains when to trust your intuition and when to slow down and really analyze a question. Take this one for example;

A bat and a ball cost $1.10. The bat costs $1.00 more than the ball. How much does the ball cost?

Your intuition probably gave you the answer of .10 cents almost instantly. But is that the right answer? Slow down and do the math.