9 Learnings from “Thinking, Fast and Slow” You Can Apply in Your Day-to-Day Life
The workings of the human mind can be quite mysterious, particularly when considering our subconscious thoughts.
Daniel Kahneman dissects this phenomenon in his fantastic book, Thinking, Fast and Slow”, elucidating the dual nature of our brains.
In this article, I’ll be sharing nine key insights that I’ve gleaned from the book.
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| Photo by Keegan Houser on Unsplash |
1. Use Familiarity to your Advantage
Humans (our System 1) substitute difficult questions with easier ones. For example, the question of probability is substituted with the question of availability (this is the availability heuristic).
How can you use this cognitive bias?
Harness the power of this effect to give a positive boost to someone’s perspective on a topic that is important to you. Infuse your conversations with a sense of familiarity, letting your passion shine through. Don’t be shy about emphasizing key facts - repetition is your ally here. Watch as the magic of influence works its charm, creating a shared understanding and, perhaps, even aligning attitudes. It’s not just a conversation; it’s a chance to shape perceptions.
Remember: repeat the facts more often during the conversation. This creates familiarity and familiarity is difficult to distinguish from truth.
2. Use the Anchor Effect
The anchor effect is ingrained in our thinking, operating subconsciously, making it often imperceptible to your conversation partner. It can be a useful tool in negotiations.
To leverage the anchor effect, initiate the negotiation by presenting the first offer. Establish it at the outer limit of what you think is possible (and beneficial to you). This value serves as the anchor that influences the trajectory of the entire negotiation.
The other party will respond with a counteroffer, but more often than not, the adjustment tends to be on the conservative side. This hesitancy to deviate significantly from the initial value arises from an unconscious desire to avoid offending others by proposing a drastically different figure.
3. Fuel up your Attention Battery
Our causal-thinking-self (System 2) is energy hungry. To pay attention to something, avoid certain thoughts or simply control yourself, your System 2 consumes energy. The term “ego depletion” describes this phenomenon.
The energy consumed in this way is not available to System 2 for cognitively demanding tasks. If you’ve just wrapped up a lengthy meeting demanding your full attention, chances are you’ve tapped into your cognitive resources significantly.
To replenish the energy reserves for System 2, you can boost it by consuming glucose.
So, when tackling a demanding task, make sure to fuel up with plenty of hydration and energy-rich foods before you start. Your brain will thank you!
4. Think of the Regression to the Mean
Humans are poor intuitive statisticians and we tend to underestimate the role of chance in our daily life.
We recognize patterns everywhere, even if they are just there by chance. This is best explained with one example:
When Daniel Kahneman tries to teach military flight pilots that praise works better than criticizing, they disagree.
One officer says that whenever he praises his students, they are significantly worse afterwards. If, on the other hand, he criticizes them, they are usually better afterwards.
Kahneman explains this with statistical effects. If we assume that good and bad flying are roughly normally distributed, then the probability is greater that a good flight will be followed by a bad one - regardless of whether the teacher praises his student or not. The situation is similar with a bad flight: regardless of whether the instructor criticizes his student, the probability is greater that a good flight will follow a bad one.
The flight teachers simply overestimate the effect of their doing on the students’ performance.
Don’t be like the flight teachers. If you have statistical figures use them and don’t trust the statistical intuition of your System 1.
5. Taming Intuitive Predictions
There exists an easy but yet effective method to tame your intuitive predictions.
Combine your estimates with base rates (take the regression to the mean into account):
- Intuitive estimation based on the known information
- Weighting by correlation coefficient
- Combination with mean values
6. Reference Class Forecast
People are overly optimistic about their own plans - external views are sometimes deliberately ignored. This is the planning fallacy
We are all prone to fall for this fallacy. Even Daniel Kahneman did fall for it.
Daniel Kahneman and a group of researchers embarked on creating a curriculum. Upon initiating the project, they sought an expert’s evaluation of their progress and an estimate of the time needed to complete the curriculum. Despite the team’s optimistic perception of their advancements and their belief in a swift finalization of the project, the expert projected a significantly longer timeframe, of around 7 years in total. The team believed that they could do much better and went on. However, the reality unfolded differently, with the curriculum ultimately taking a total of 8 years to complete.
To overcome this cognitive bias, the “Reference Class Forecast” is a great method.
Reference Class Forecasting involves predicting the future by examining analogous past situations and their outcomes (e.g. past projects). This method anticipates the results of a planned action by drawing on actual outcomes from a reference class comprising similar actions to the one being forecasted.
7. Use Numbers rather than Percentages
The manner in which a probability is presented can impact our evaluation of options (such as 1 person in 100 versus 1%).
Human decision-making is predominantly influenced by emotions rather than statistics. When we encounter a statistic like one in one hundred persons,” we vividly visualize the individual in our mind’s eye. In contrast, when presented with the percentage “1%,” the emotional connection is diminished.
Use this to your favor and try to convey statistic-facts in concrete terms, such as “1 in 100,” to enhance emotional resonance and understanding.
8. Don’t be fooled by the safety effect
Humans are risk-averse. We even pay a premium for not taking risks (safety-effect). Most of us would not take the following lottery:
- 50 % chance of loosing 100$ and 50 % chance of winning 102$.
But don’t let the safety effect fool you: Decisions should not be evaluated in isolation.
Similar situations will continue to arise throughout your life.
Even if there is the probability of occasional losses, embracing such risks will lead to better overall outcomes in the long run. As long as the risk is non-existential, embrace it!
9. Mean of maximum value and final value
Memories are shaped by averaging the maximum value and the final value of our emotional states. For good memories they are a combination of maximum pleasure and final pleasure and for unpleasant memories it is the combination of maximum pain and final pain level.
This rule is easy, but can be powerful if you apply it correctly: end your conversations, meetings, discussions etc. on a positive note. Your conversation partners or the meeting participants will form a more positive memory.
Thank you for reading!
This was the the third part of my comprehensive series delving into “Thinking, Fast and Slow” by Daniel Kahneman. Check out the entire series here: