The Thinking, Fast and Slow

A Tribute to Daniel Kahneman

Apr 07, 2024

In a year that has seen the brilliant Charlie Munger leave us, on the 27^thof March, we saw the death of Daniel Kahneman. A brilliant psychologist and economist, his work forever changed both fields (and multiple related fields) and helped pave the way for the development of the field of behavioural economics.

The field of behavioural economics combines psychology and economics and allows us to understand why people behave the way they do. It’s behavioural biases, knowledge gaps, information availability, and the existence of heuristics that ensure the field of behavioural economics is changing the wider field of economics.

People don’t always do what is rational. They don’t always make the most optimal decision. It has connections to game theory. When playing poker, there’s sometimes a rather boring player. One who sits there folding until they get a hand they know they can work with. Once they get this hand, they bet big.

When this occurs, it’s rather obvious to those sitting around the table. “Oh, Dave must have a good hand”. Except, more often than not, someone will rise to challenge Dave’s hand. Is this the optimal decision for them? Is it the optimal decision for Dave to be as varied as a plank of wood in his poker approach? Likely not. It makes him incredibly predictable. But this scenario clarifies that we have irrational actors that exist, especially after a few beers!

white and black dice on green table — Photo by Michał Parzuchowski on Unsplash

We’re emotional, ego-filled, impulsive beings. Being aware of this can be one of our biggest superpowers, and it’s something Kahneman worked on for his entire life.

System 1 vs System 2 thinking is another concept discussed by Kahneman in his book Thinking, Fast and Slow.

System 1 thinking is automatic thinking, sometimes described as a gut feeling. It happens intuitively, but that doesn’t mean it’s correct. Sometimes, our biases and heuristics can lead to us believing our system 1 thinking is based on strong intuition, but it was flawed thinking to begin with. Practice over time can improve this.

System 2 thinking is slow thinking. It’s a conscious thought that we make logically.

This concept has an impact on various fields, especially marketing. Many marketers hope consumers make purchases through their system 1 thinking but can reinforce this with system 2 thinking.

gray monkey in bokeh photography — Photo by Juan Rumimpunu on Unsplash

The final concept I’ll explore is adversarial collaboration.

If somebody were to disagree with anything I ramble on about on my Substack, perhaps we could partake in adversarial collaboration. Created by Erez, Latham, and Locke, Kahneman developed a similar concept a decade later independently of the original work of which he had no knowledge. The concept of adversarial collaboration is a form of collaboration in which opposing views work together to advance the area of dispute as a whole. Specifically in science, it is used with two disputed groups and a neutral mediator, and an experiment designed by both seeks to resolve differences.

It’s outside the field of science, however, that I believe the concept of adversarial collaboration could benefit us. The concept was used brilliantly during the Camp David Accords peace between Israel and Egypt, mediated by U.S. President Jimmy Carter.

a dog and a cat looking out a window — Photo by Madalyn Cox on Unsplash

When both sides sat down in front of one another, they became disillusioned with the other’s requests. It wasn’t until Carter acted as a neutral mediator that talks started to move forward. He shuttled between the two sides, often interacting with the delegations rather than the leaders. He’d then shift his approach and repeat the process with the other side. Eventually, the two frameworks were the points the Egyptians and Israelis could agree on, and it led to the peace that has existed ever since.

The world we live in today possesses many unfortunate conflicts with the war in Ukraine, Gaza, and many other wars less covered in the news, like Nagorno-Karabakh last year, and the present-day situation in Haiti, among many others. It’s civilians that suffer the most in these conflicts. It completely up-ends their lives in unimaginable ways to most of us. So why do these fights persist? Is it because we have no mediators? Countries in the world order throw the toys out of the pram when they feel threatened. How can we build countries up as mediators in the world order? Look at Turkey, or Saudi Arabia, for example. They interact with both sides of the multipolar world order. Could they act as mediators? I’m rambling, but I hope you understand my point.

As these conflicts continue to escalate, we reach the precipice. Do we tip beyond the point of no return, or do we step back, and realise what we have to lose, and what we’ve already lost? Mediators make this step back from the brink even more likely. But who wants to fill the shoes?

pair of green rain boots on gray pavement — Photo by Brandy S on Unsplash

Kahneman’s work and his concept of adversarial collaboration can be used outside of science. We all have differences, but these should be celebrated. It makes the world an exciting, challenging place, and it teaches us all to be more understanding of others; and to understand the deep-routed behavioural trends that drive actions and decisions. Importantly, it creates a less biased, more complete experiment in science, and so can create a less biased, less adversarial world, with much greater understanding.

Outside of our differences, we also possess similarities. Even in the direst of situations, we can see similarities between combatants, and aspects of life in which all adversaries are incentivized to pursue peace. Adversarial collaboration is a concept that needs greater attention on a global geopolitical scale. I hope one day we’ll get there, or closer to it at least. If we do, it will be in part thanks to the work of Daniel Kahneman.

Sources

Something Greater

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