Video from a Live Talks Business Forum featuring Nobel laureate Daniel Kahneman discussing his new book, Thinking Fast, and Slow. The Forum was held on November 4th, 2011 at The City Club on Bunker Hill. Kahneman was in conversation with Paul Zak, neuroeconomist and author.
Daniel Kahneman, Nobel Laureate in Economic Sciences
in conversation with Paul Zak, Neuroeconomist
Thinking, Fast and Slow
A Nobel laureate in economics (one of the only non-economists to earn this honor) and a research psychologist world-renowned for his seminal work on judgment, decision making, and happiness and well-being, Daniel Kahneman has been hugely influential on notable writers like Dan Ariely, Richard Thaler, Steven Pinker, and Daniel Gilbert. His ideas have revolutionized economics, medicine, psychology, philosophy, legal studies, and a host of other disciplines by challenging fundamental ideas about rationality in thinking and decision making. In Kahneman’s view of the mind, developed through decades of path-breaking research, we are blind to our cognitive blind spots: we often don’t know why we make the judgments and choices we do, we are bad at knowing what we want and what will make us happy, and the model of the world in our heads often doesn’t correspond to the world as it really is. Our thinking and behavior are shaped by systematic cognitive errors—the biases of intuition that Kahneman is widely credited with first revealing.
In Thinking, Fast and Slow, Kahneman offers for the first time for a general audience an accessible big picture of the human mind – a comprehensive look at the ideas that have won him acclaim over the last forty years of his career, and an introduction to his latest research. The result: an invigorating master class with huge implications for how we think about our personal and professional lives.
He illumnates what he calls the “machinery of the mind.” Two systems drive the way we think and make choices: System One is fast, intuitive, and emotional: System Two is slower, more deliberative, and more logical. Examining how both systems function, Kahneman exposes both the extraordinary capabilities and also the faults and biases of fast thinking, and the pervasive influence of intuitive impressions on our thoughts and our choices. He shares personal insights into how these ideas were developed, from his time in the Israeli army to his work with Amos Tversky on prospect theory, loss aversion, and framing effects (which won him the Nobel), to his many discussions with some of the most important business leaders in the world.
In the course of explaining his revolutionary work on judgment, decision making, and happiness and well-being, Kahneman tackles a host of other fascinating real-world issues: the role of overconfidence and optimism as an engine for capitalism; the difference between our experiencing and remembering selves and its impact on happiness; when you can trust an expert; why successful golfers unconsciously try harder when putting to avoid a bogey than to achieve a birdie; how individuals, businesses, and governments should think about risk; the nature of regret and stereotyping; how businesses can institute strategies, including premortems, for better decision making; why hawks tend to win policy debates; why hot-hand streaks in basketball are illusions, and much more. Each of these can only be understood by knowing how the two systems work together to shape our judgments and choices.
Daniel Kahneman is the Eugene Higgins Professor of Psychology Emeritus at Princeton University and Professor of Psychology Public Affairs Emeritus at Princeton’s Woodrow Wilson School of Public and International Affairs. He received the 2002 Nobel Prize in Economic Sciences for his pioneering work with Amos Tversky on decision making.
“Daniel Kahneman is among the most influential psychologists in history and certainly the most important psychologist alive today. He has a gift for uncovering remarkable features of the human mind, many of which have become textbook classics and part of the conventional wisdom. His work has reshaped social psychology, cognitive science, the study of reason and of happiness, and behavioral economics, a field that he and his collaborator Amos Tversky helped to launch.” – Steven Pinker, author of How the Mind Works and The Better Angels of our Nature
“Daniel Kahneman is one of the most original and interesting thinkers of our time. There may be no other person on the planet who better understands how and why we make the choices we make. In this absolutely amazing book, he shares a lifetime’s worth of wisdom presented in a manner that is simple and engaging, but nonetheless stunningly profound.” – Steven D. Levitt, Co-author, Freakonomics and SuperFreakonomics.
Paul J. Zak is an economist, scientist and author. He is the founding Director of the Center for Neuroeconomics Studies and Professor of Economics, Psychology and Management at Claremont Graduate University. Dr. Zak also serves as Professor of Neurology at Loma Linda University Medical Center. He is credited with the first published use of the term “neuroeconomics” and has been a vanguard in this new discipline. Zak’s lab discovered in 2004 that the brain chemcial oxytocin allows us to determine who to trust. His current research has shown that oxytocin is responsible for virtuous behaviors, working as the brain’s “moral molecule.” This knowledge is being used to understand the basis for civilization and modern economies, improve negotiations, and treat patients with neurologic and psychiatric disorders. His book The Moral Molecule: Vampire Economics and the New Science of Good and Evil will be published in 2012.