Learn the fundamentals of cognitive behavior and how to make the most of your decision-making capabilities.
Let’s start with the age old question. A pair of a bat and a baseball costs $1.10. If the bat costs $1 more than the ball, how much does the baseball cost? If you are like most people, you will answer the question in an instant.
So what’s the answer?
If you answered 10 cents, then unfortunately you are wrong. Your mind just tricked you. If you spend a minute or two on the question, you will realize that the correct price of the baseball is 5 cents or $0.05. Now, if the bat costs a dollar more than the ball, it will cost $1.05 for a total combined cost of $1.10 for the set. If the baseball costs $0.10, the bat will cost $1.10 and the total cost for the pair would end up exceeding $1.10.
Amazing, right? What went wrong?
Daniel Kahneman starts his 2011 best-seller book Thinking, Fast and Slow with the way our brain is programmed to think and make decisions. He begins with talking about the two systems that every human possesses, which by the name of the book you might have guessed already. These two systems are just like two characters in a story. System One, as Kahneman calls it, is your gut-based intuitive way of thinking which is driven by your everyday habits and is tasked with most of your day-to-day decisions, such as ironing your clothes, making coffee and catching the bus to school.
Related Article: What I learned from “Thinking Fast and Slow”
System Two, unlike its counterpart, is an analytical and systematic mode of thinking which only comes out of hibernation when you face a challenging situation or are tasked with something that requires complex thinking, such as SAT or the GRE, which contains complex mathematics problems that your otherwise intuitive system will not be able to solve. With System Two, you burn a lot of mental energy and sometimes your heart will even start to race.
In the baseball question above, when you answered $0.1, your brain thought the question was simple and tasked the System One with solving it. Since this system is driven with intuition and habit, it simplified the problem by quickly associating the cost of the bat to $1. Then, after subtracting this value from the total amount, it ended up with the price of $0.10 for the ball. But when you spent some more thinking about it, the System Two leapt into action and systematically solved the question.
Both systems work simultaneously to make use of your brain’s limited energy. Since the brain is considered to be a lazy organ, it relies on the System One for most of your daily tasks and System Two is only awaken when the task appears to be tedious. If your brain did not work in this manner, you will get exhausted by ordinary day-to-day activities, such as riding the bike or talking to your colleagues. But it does not hide the fact that, while System One is quick to solve the problem, it is often prone to making mistakes along the way, which is what we saw earlier in this post.
Kahneman’s book summarizes the present-day view of the psychological behavior of how our mind goes about certain situations. He has written about how most people just jump to conclusions even when they have very limited information about the subject. He has a special word for this behavior — WYSIATI — which translates to “What You See Is All There Is”, which causes the majority of us to ignore the information is absent or not accessible and focus on what is visible.
Some other behaviors discussed in the book are:
The law of Small Numbers
Since people do not comprehend statistics very well, they associate a small number to the representation of a larger system, such as 500 people compared to the entire population.
Most of the people fabricate stories and flawed explanations for past events to undervalue their reactions to those events. The “I knew it all along” bias makes people exaggerate the possibility that they expected the said event or they thought it was highly unlikely for a certain event to occur after it does not occur.
Because of the WYSIATI bias, people are quick to settle on partial evidence that confirms their previous standing on a matter and will not seek further evidence that may go against their beliefs.
The illusion of understanding due to WYSIATI causes people to become overconfident in their everyday judgments and predictions. This overconfidence is the result of ignoring what we do not know or choose not to understand to keep the “I know it all” illusion.
The Outside View
Most people have a tendency to create plans based on the best-case scenario without considering all similar cases of the past. This results in flawed plans and our projects do not see the light of fruition.
Through his book Thinking, Fast and Slow, Daniel Kahneman has tried to convey several complex research concepts backed with numerous examples in a fun and easy to read manner so you can get acquainted with the decision making scenarios we face on a day-to-day basis and understand when and how thinking fast and slow can benefit us in the long run.
I suggest you read the book to get a deeper understanding of the subject matter and experience the wonderful writing skills of one of the brilliant minds of today.