By Steve Kelman

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The power of slow thinking

book cover

In 2011, Daniel Kahneman published a book called "Thinking, Fast and Slow," which was a non-fiction bestseller. I write about it now because it just came out in paperback. It is a great read, and I guarantee it will teach you a great deal.

Kahneman is an emeritus professor at Princeton University's Woodrow Wilson School of Public and International Affairs and the first non-economist by profession to win the Nobel Prize in Economics. In his book, he tells us that our minds have two systems for making decisions, which he straightforwardly calls System 1 and System 2.

System 1 has arisen from millennia of human evolution and from repeated experiences people have over the course of their lives. System 1 is fast. It provides intuitive reactions to what we should do. System 2 is methodical and deliberative thinking, when we ponder evidence and weigh pros and cons. It is much slower, and it takes mental effort and energy. Often, Kahneman notes, System 2 acts as a check on System 1.

Academics like me and Kahneman are unsurprisingly (dare I say instinctively?) System 2 believers, though a minority of scholars who study decisions argue that such expertise has become largely intuitive.

Here's what Kahneman says: For many situations in which our reactions are governed by System 1, speed is essential. We are extremely sensitive to danger, quickly noticing and reacting to it because a microsecond advantage could determine whether our pre-human ancestors were eaten or not. Furthermore, in situations in which people have frequent experience — say, in playing basketball or diagnosing disease — and where feedback about the result of a decision is quick and unambiguous, the mind eventually develops good intuition that often cannot be expressed in words.

However, System 1 often does not provide an intuitive answer. To cite an example Kahneman provides, there is no System 1 answer to the question "How much is 49 times 27?" We need to develop and use System 2 to help us.

Beyond that, though, System 1 answers are sometimes just wrong. Our instincts lead us in a direction that generally makes sense but produces absurd results. These are the kinds of situations Kahneman became famous for studying. People will prefer being subjected to 10 minutes of severe pain followed by 5 minutes of mild pain rather than only 10 minutes of severe pain, though a moment's thought tells us this is irrational. Many experiments show that people are dramatically overconfident about how much they know or how successful their efforts are likely to be. And in situations in which there is not frequent, unambiguous feedback, expert intuitions have a poor record of success.

So, true to his status as a professor, Kahneman wants to see more System 2 in our decisions. But System 2 takes effort, and our minds prefer to be lazy. And often the times we most need System 2 as a check are those when we least realize we need it because System 1's message is so unequivocal.

At the end of the book, Kahneman extends his analysis from the individual to the organization.

"Organizations are better than individuals when it comes to avoiding errors because they naturally think more slowly and have the power to impose orderly procedures.… Whatever else it produces, an organization is a factory that manufactures judgments and decisions. Every factory must have ways to ensure the quality of its products in the initial design, in fabrication and in final inspections."

Sounds like a topic for another book.

Posted on May 09, 2013 at 12:09 PM


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