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Monday, June 4, 2012

Thinking: Post#1 - Overview

Overview: Winner of the Nobel Prize in Economics, Daniel Kahneman tells us that we use intuition all the time—and often well—to make daily decisions. But sometimes, even at important times, we use intuition and make very bad and harmful decisions. Getting up in age these days, Kahneman appears to have written this opus magnum as a great compilation of his research and that of his much admired academic partner, Amos Teversky (now deceased).  A leader in psychology and specifically decision making and behavioral economics, Kahneman explores two systems of how we think. System 1 is the quick-to-judge, emotional, and intuitive thinking system we all seem to possess and use often. System 2 is the slower, more deliberate and logical kind of thinking we also all possess. Kahneman profiles the amazingly fast and omnipresent power and influence of intuitive thinking…both its profound contribution to daily life and its hidden traps when making big decisions too quickly—fueled by the biases of System 1 thinking. He shows how anchoring, loss aversion, and various cognitive biases can powerfully affect our decision making at home, at work and in the marketplace. At the same time, he introduces us to the slower, more logical, and more deliberate partner, System 2, and how it can be used to moderate, even mitigate, the flaws in the fast-thinking System 1. In essence, he helps us understand when and where to use each of these systems to maximize our outcomes. His bottom line advice: When we make important decisions, we need to slow down.

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