00b - Author's Introduction

Introduction

• purpose: improve vocab. for talking about judg’ts & choices of others, the company’s new policies, a colleague’s investment decisions. — ∃ distinctive patterns in the errors people make, systematic errors, biases
• the mental work that produces impressions, intuitions, & many decisions is unconsc.
• most of our judg’ts & actions are appropr. most of the time — but not always
• Aim: improve ability to identify, underst. errors of judg’t & choice — in others, eventually in selves, provide richer, more precise lang. to discuss them

Origins

• current underst. of judg’t & decision making ß psychological discoveries of recent decades
• collaboration w. the late Amos Tversky, many years

Where We Are Now

• to present a view of how the mind works that draws on recent devep’ts in cognitive & social psych’y —we now underst. intuitive thought, its marvels & flaws
• one kind of valid intuition ß experts have learned to recog. familiar elements in a new situation, act approp’ly — good intuitive judg’ts come to mind immed’ly — w. relevant expertise, recog. situation, intuitive sol’n likely correct — intuition may also work when difficult question & skilled sol’n available
• emotion very impt. in intuitive judg’ts & choices
• the essence of intuitive heuristics: faced w. a difficult question, we often answ. an easier question instead, usually without noticing
• spontaneous search for intuitive sol’n sometimes fails —no expert sol’n & no heuristic answ. comes to mind — then may switch to a slower, more deliberate, effortful form of thinking, i.e. “Slow Thinking
• “Fast Thinking” incl. both variants of intuitive thought, the expert & the heuristic, also auto. perception & memory

What Comes Next

·         Part 1. Two Systems :  basic elements of two-systems approach to judg’t & choice — elaborates distinction of auto. operations of System 1 vs. controlled operations of System 2, shows how associative memory ( the core of S1) continually constructs a coherent interpr’n of what is going on in our world at any instant — the complexity & richness of the auto. & often unconscious processes that underlie intuitive thinking, how they explain the heuristics of judg’t — a goal is to introduce a language for thinking & talking about the mind

·         Part 2. Heuristics and Biases: updates the study of judg’t heuristics — asks: Why is it so difficult for us to think statistically?  — we easily think associatively, metaphorically, causally — but statistics req. thinking about many things at once — S1 is not designed for that

·         Part 3. Overconfidence: our excessive confid. in what we believe we know, inability to acknowl. our ignorance & uncertainty of the world we live in —illustr. by difficulties of statistical thinking —prone to overestimate how much we underst. the world, underest. the role of chance — overconfid. increased by certaintyof hindsight (illusory)

·         I hope for watercooler conversations that intelligently explore the lessons that can be learned fr. the past while resisting the lure of hindsight & the illusion of certainty

·         Part 4. Choices: in economics, the nature of decision making,  & assumpt’n that econ. agents are rational —using the two-system model, the key concepts of prospect theory (our model of choice, Amos & I, pub’d 1979) — subseq. chapters: ways human choices deviate fr. rationality, tendency to treat problems in isolation, & w. framing effects, decisions shaped by inconsequential features of choice problems — a deep challenge to the rationality assumption favored in standard economics

·         Part 5. Two Selves: disting. experiencing self vs. remembering self, hv diff. interests — e.g. expose people to 2 painful exper’s, one worse, i.e. longer, but we can exploit the auto. formation of memories (a feature of S1) so that worse episode leaves better memory; when people later choose which episode to repeat, they are guided by their rememb. self, expose selves to unnecess. pain —2 selves theory applied to measurement of wellbeing, what makes the experiencing self happy is diff. fr. remembering self — difficult question: How can two selves within a single body pursue happiness?  for individuals, for societies that view well-being of pop’n as policy objective

·         Concluding chapter: in reverse order, implications of three distinctions drawn in the book: (1) experiencing vs. remembering selves, (2) conception of agents in classical economics vs. in behavioral economics (which borrows fr. Psych’y), (3) auto. System 1 vs. effortful System 2 — then, the virtues of educating gossip, how organizations can improve the quality of judg’ts & decisions made on their behalf

·         Appendixes: 2 articles author wrote w. Amos —review of judg’t under uncertainty — prospect theory, studies of framing effects — cited by the Nobel committee—suprisingly simple —will give you a sense of how much we knew long ago, also how much learned in recent decades