Books

Thinking, Fast and Slow- book review

After over a year of off-and-on reading, I finally finished Thinking, Fast and Slow, one of the most challenging books I’ve ever read. In the time it took me to finish this, I moved countries and places twice, finished over 15 books, traveled to six countries, and got a new job.Written by Nobel Prize-winning economist and academic Daniel Kahneman, the book explains the two modes of thinking and how these affect people’s decisions and actions.

System 1 refers to one’s impulsive or intuitive thinking, whereas System 2 is the more thoughtful and methodical way of thinking. Usually, people use System 1 when they encounter problems, which leads to a lot of unwise reactions or judgements. It’s not surprising because a lot of times, we do things based on how we feel or see things (WYSIATI or what you see is all there is) but things might be different if we take a step back and think about the situation, which we don’t often do. Of course, we can’t help it because it’s normal human nature or a biased nature. The book presents dozens of situations in which Kahneman explains the way how both systems work, how our biases influence our decisions at the expense of rationality, how overconfidence in what we think we know affects us, and how our memories of things we’ve experienced can sometimes outweigh the actual effects of experiences.

For instance, causes trumps statistics (chapter 16) shows that people are often more convinced by causal explanations than by statistics, and that individual cases or examples are more compelling than statistics. The illusion of validity and skill (chapter 20) is a regular occurrence when people take things to be true, such as good fortune in picking stocks as evidence of supposed genuine skill, even if statistical evidence shows the opposite. And keeping score (chapter 32) shows how people often make choices to avoid regret or refuse to cut losses in order to try to gain it back (disposition effect). This latter often results in the sunk-cost fallacy, a situation in which you continue to put effort or resources into something even if it is failing because you’ve already put in a lot of effort and are worried about wasting it completely, such as gamblers who lose but continue to bet big instead of walking away.

I have to admit it’s a little unfair to deem this book as the most challenging I’ve ever read because I did not read it in the way it should have been read. So don’t be like me and read it in segments over a long time period. Read it daily or regularly over a week or month so you could remember all the different points and explanations. You’ll certainly gain a lot of new insights and perspectives that will open your eyes, or rather your mind.

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