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Strategic Mind: How To Make Decision-Making A Skill?

A Book Review Of Thinking, Fast and Slow By Daniel Kahneman

What if you could make better decisions by thinking more logically and clearly? This article primarily reviews Daniel Kahneman’s book Thinking, Fast and Slow which examines how decision-making can be easily learned by comprehending the two systems of the mind.

image by Freepik
image by Freepik

Table of Contents:


“Although Humans are not irrational, they often need help to make more accurate judgements and better decisions, and in some cases, policies and institutions can provide that help” Daniel Kahneman’s conclusion. 

Daniel Kahneman is a psychologist born in Israel. He finished his bachelor's degree in psychology at the Hebrew University of Jerusalem. He served in the army in the psychology department of the Israeli Defence Forces. In addition to being the Eugene Higgins Professor of Psychology at Princeton University, he teaches psychology and public affairs at the Woodrow Wilson School of Public and International Affairs. He won the 2002 Nobel Prize in Economic Sciences as a result of his dedicated work with Amos Tversky in decision-making research.

“Thinking, Fast and Slow” shows the reader the pitfalls by taking a small tour inside the mind. The book includes numerous references to the original articles, books and discussions for sceptical readers. However, the narrative’s strength lies in its lucid explanation of numerous intriguing yet straightforward experiments. This book provides a thorough analysis of the reasons behind our decision-making processes.

Since most of us lack a solid understanding of the probability, we are not familiar with determining the relative risks. The questions we ask ourselves influence the decisions we make. According to Kahneman, the part of our brain responsible for intuition and decision-making has two personalities, which he uses to explain how our mind forms conclusions and makes choices. He claims that these traits are not two separate or distinct systems but rather that to comprehend them more fully, we will need to assign personalities that will allow us to relate to them on a personal level. 

Acknowledge The Two Systems in Decision-Making 

For convenience, the two systems are called System 1 and System 2. System 1 is quick-witted, critical, manipulable and watchful. Conversely, System 2 is the complete opposite of System 1; it is intelligent but lazy in the back of our minds. It is also stubborn and hard to persuade. These two systems work together for us to have a better assessment of the problem and analyze situations.

Kahneman continued that System 1 operates automatically and cannot be turned off at will, errors of intuitive thought are often difficult to prevent. Biases cannot always be avoided because System 2 may have no clue to the error. Even when cues to likely errors are available, errors can be prevented only by enhanced monitoring and effortful activity of System 2

System 1 - System 2

Answer to 2+2 =

Answer to f(x) = x^3 - 6x^2 + 11x - 6.

Understand simple sentences

In a crowd, look for a woman with white hair

Drive a vehicle on a vacant road

Counting how many letters “e” are in this article

Make a “disgusted face” when confronted with a terrible image

Prepare yourself for the race’s starter gun.

Spotting dislike in a voice

Keeping up a walking pace that is quicker than usual for you

Determine the source of the sound

Parking in a small area.

Using this structure, Kahneman goes into a wealth of research on bias in thought. Energy is needed for ego depletion and self-restraint, and usually do not activate System 2 unless we are coerced into doing so or have trained our minds so.

Our surroundings, including insignificant objects, can influence our emotions and behaviours at the moment. There is a wealth of information and research available regarding the conditioning of the minds of people with money.

A psychologist found that the ease with which many related words can be evoked changes immediately and measurably after exposure to a word Kahneman calls it the priming effect where your System 1 is exposed to a word or a story that will make your system 2 believe it.

Speaking of cognitive ease, Daniel Kahneman talks about the effect of ease and strain on our mind. Discovering the path with the least amount of mental obstacles and making assumptions that are the mental equivalent of reading clear instructions shows an example of cognitive ease.

The human brain can detect casualty everywhere, even in situations where it is absent. The effects of the different causes of ease or strain are similar. When you feel strained, you are more likely to be watchful and sceptical and when you are in a state of cognitive ease, you are probably in a good mood and feel like everything seems comfortable to you.

 Later in the book’s chapter, Kahneman talks about WHAT YOU SEE IS ALL THERE IS (WYSIATI). System 1 leaps to a conclusion with no proof when the information is scarce, which is because of quick-witted System 1 and a lazy System 2. 

Those who heard only one side could easily generate the argument for the other side. Nevertheless, the presentation of one-sided evidence had a very pronounced effect on the judgment” Kahneman while observing participants in court situations.

This is what you would expect if the confidence that people experience is determined by the coherence of the story they manage to construct from available information. It is the consistency of the information that matters for a good story, not its completeness. Indeed, you will often find that knowing little makes it easier to fit everything you know into a coherent pattern” He added.

Heuristic and Biases: Steer Clear of Conflicts In Decision-Making

In part 2 of the book Daniel Kahneman talks about the heuristic and biases in our decision making. First is the anchoring effect where the author says that it occurs when someone thinks about a specific value for an unknown quantity before estimating it. We end up filtering all new information through the mental framework we first created when we become attached to a particular figure or course of action, which distorts our perception. 

Followed by the science of availability where we characterized it as the method of determining frequency based on how quickly examples can be recalled. The availability heuristic can result in poor choices because easily recalled memories are frequently insufficient to determine the likelihood that these events will occur again. In the end, our overestimation gives us poor-quality data on which to base our choices. Less significant  occurrences, however, that have higher-quality data supporting our predictions go unnoticed.

Example of the availability heuristic. Consider how many words you could make with the two sets of letters below. 







In the later part of this book, the author talks about the regression to the mean. The RTM or regression to the mean refers to the extreme scores' innate tendency to return to the mean scores. The harsh reality is that we are far too ready to accept the idea that a large portion of these effects is the result of chance or luck.

Our problems with System 1 and System 2 are the root of our problems with the concept of regression. The relationship between correlations and regression is still unclear in many situations even with statistical instruction, let alone without it. System 2 has trouble learning and comprehending. This is partly because System 1's insistence on casual interpretations is one of its characteristics.

  • How do Heuristics and Biases Affect Our Mental Health?

Heuristics are shortcuts we use in our decision-making process, but occasionally, they result in biases that negatively impact our judgment. This will fall into confirmation bias and can be detrimental to our mental health. This may serve to confirm unfavourable mental habits or self-perceptions. These cognitive shortcuts can also cause decisional paralysis, which keeps people from accepting or requesting mental health care.

Kahneman provides readers with a thorough understanding of the relationship between mental heuristics and biases, highlighting the significance of carefully re-evaluating one’s point of view and coping mechanism.

Challenge Your Assumption, Avoid Overconfidence

Let's examine how Daniel Kahneman analyze Overconfidence in the process of Decision-Making

Through different research, Daniel Kahneman illustrates the extent of our history we recognise. He brings up the illusion of understanding which the WHAT YOU SEE IS ALL THERE IS (WYSIATI) is applied where you act with the little knowledge you have. Using the information at your end, you construct the best narrative, if it provides a good outcome, then you decide to believe it.

Ironically, when you don't know much, and there are fewer pieces in the challenge, it is simpler to put together a cohesive tale. Our reassuring belief that everything in the world makes sense is based on a solid foundation: our nearly limitless capacity to overlook our ignorance.

The author explains intuition vs formula where he cites two factors on why expert intuition gets destroyed by straightforward algorithms. The situation adds disturbances, causing System 1 thinking to be activated, starting with inconsistencies.

By completing the gaps in various pieces of information, System 1 thinking creates narratives. Kahneman concludes the chapter by saying that intuition can be helpful even after outlining its downsides, but only after a careful collection of accurate information.

Before acting, every advisor and guide conducts assessments.

Before being absorbed by the distraction that comes with every situation, it's critical to have a structured set of questions and patterns that can be used to assess the circumstances and surroundings objectively. 

"The mystery of knowing without knowing is not a distinctive feature of intuition; it is the norm of mental life” Kahneman’s remark about Herbert Simon's definition of intuition

Kahneman also examines the idea of optimism bias in this chapter. Due to this bias, people tend to think that bad things happen to other people less frequently. For instance, the majority of software engineers think they have never encountered a problem they are unable to solve, which is an unreasonable assumption in any complex setting. People's tendency to exaggerate their abilities is what causes this effect. 

Can You Trust Your Choice?

In this chapter, Daniel Kahneman discusses the prospect theory as a well-known alternative to the anticipated use of decision-making. Followed by the endowment effect that explains the tendency for people to place a higher value on possessions than they otherwise would. This implies that vendors frequently attempt to overcharge for goods that could be purchased for less.

The Fourfold Pattern offers a framework for considering how individuals act when faced with choices involving a high probability (certain effect) or a low probability of success and failure. Kahneman talks about the two effects that frequently have an impact on group decision-making. The potential effect comes initially when an outcome chance increases from zero to even a small one (5% probability). This is known as the possibility effect. Individuals consider the possibility of the outcomes to be far greater in this situation. When a result can be certain, we get the second effect, which is known as the certainty effect. In this case, people prioritize results that are likely over certain ones, 

In intricate decision-making instances, there is a greater chance of leaving money on the line when these biases are combined with a limited strategy that prioritizes making decisions as they come up. Kahneman suggests establishing risk policies as an answer. A risk policy is a wide framework for making choices. The purpose of a risk policy in work prioritization is to prevent overly cautious behaviour brought on by loss aversion and the pessimism of the planning fallacy.

Feelings of regret are fascinating feelings that merit careful thought. It's a system 1 emotion, meaning we experience it when we stop, think back on our lives and evaluate the choices we've taken or not taken. Our brain is engaged, and quick and System 1 is not capable of feeling regret. It operates in the present and responds to our input at that very moment. It is too preoccupied with the here and now and its surroundings to be the one generating regret, but it can take in system 2’s regret as a suggestion and modify it with new choices and behaviour.

“We spend so much of our day anticipating, and trying to avoid, the emotional pains we inflict on ourselves. How seriously should we take these intangible outcomes, the self-administered punishment (and occasional rewards) that we experience as we score lives?” Kahneman talks about the responsibility of regret

They lead to actions that are detrimental to health and to wealth of the individuals, to the soundness of the policy, and the welfare of the society , he added.

Daniel Kahneman proposes that when making decisions, we all presume they are the best for us. Usually, this is not the case. Perceptions that are not always accurate will affect our decisions. Believers in the rationality of choice should be wary of decisions that do not result in the best possible experience. Our preferences do not always accurately represent our interests. Even to these perceptions founded on current information and firsthand experience, this lack of trust is real.

Recognize Your Two Selves: Miscommunication in Decision-Making 

So what are two selves? Kahneman points out the “remembering selves” and the “experiencing selves”. Only the present is known to and lived in by the experiencing self and what we keep from our remembering self is our memories. The remembering self keeps score, creates, maintains and tells the story of our lives. In a witty summary, Kahneman said that we were more likely to complain about our good fortune at the final toll booth when our remembering selves were at work rather than the experiencing selves when we could easily navigate those places. 

Experiencing Self

Remembering Self

As you relax on the beach, taking in the warm sun, the smooth sand beneath your feet and the sound of the waves.

After the vacation, you look back on the memories you created. But your remembering self may also omit less enjoyable moments, such as a short downpour or a delayed flight.

In this instance, your remembering self is concerned with the overall evaluation of the experience based on the memories created, whereas your experiencing self is concentrated on the feelings and sensations experienced during vacations. According to Kahneman's theory, these two occasionally have distinct priorities and points of view, which can provide fascinating new insights into how people make decisions and manage their well-being.

The two biases that affect the narratives we tell about our lives are the subject of this chapter of the book called  “Life As A Story”. The concept of duration neglect holds that the length of an event and the character's state during it are less significant than the character's state after the story, and as a result, the duration will be eliminated from the narrative.

People write stories and preserve them for later use. The way that System 1 operates lends acceptance to the notion that stories are significant. It creates narratives by tying concepts and recollections together. Creating stories that trigger inspiring memories can be accomplished through brief phrases which produce small improvements. 

The experience of growth, fulfilment, and wellness is a part of “Experienced Well-Being”. Kahneman addresses the concept of assessing well-being in this chapter to help economists and psychologists understand the factors that influence well-being. Kahneman demonstrates the way we feel.

People typically pay attention to their immediate surroundings and what they are engaged in at the moment. The connection between engagement and a more favourable understanding is another important lesson from this chapter.

"The easiest way to increase happiness is to control your use of time. Can you find more time to do the things you enjoy?” Kahneman speaks about the “Experience of Well-Being”.

Realizing that people’s perceptions of their lives are different from their lived experiences brings the chapter to a close. We tend to focus on what is happening right now rather than what has happened over time due to biases like duration neglect. In this chapter, Kahneman discusses some topics, one of which is the weak relationship between an individual's circumstances and life satisfaction.

Unpredictable mutations play a major role in determining one's level of experienced happiness and life satisfaction. Positive temperaments lead to greater satisfaction. 


It took me several months to finish this book, but the effort was well worth it. One thing that changed my perspective is that our system 1 serves as the primary foundation for decision-making. Even though there may be moments when we wish we had chosen differently, this does not indicate that we are acting irrationally all the time. It does not make you wholly unreasonable to be unable to make an inappropriate decision. In his conclusion, Daniel Kahneman stated that “ A rational person can prefer being hated over being loved,so long as his preferences are consistent.”

We cannot entirely rely on our two imperfect systems to help us become better decision-makers, just as our regret system is a component of our “remembering self” in system 2. We must accept whatever decision we make (as long as it does not put other people at risk) because we have the freedom to choose, even though we may have to deal with the consequences of our actions sometimes.

Written By Ethil Besana

Edited by Virginia Helzainka


Kahneman, Daniel. (2011). Thinking, Fast and Slow . London: Penguin Books.

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