Thinking fast and slow

1. Thinking fast and slow Daniel Kahneman 2011 Winner of 2002 Nobel prize for economics

2. View of rationality • 1970s believed that people are generally rational • Strong emotions cause departure from rationality Since then behavioural psychologists and economists have developed a different view based on an analysis of how we think…

3. System1 thinking How does this woman feel?

4. System 2 thinking 17 x 24 = • Deliberate • Effortful • Orderly

5. System 1 – fast thinking • Detect one object is more distant than another • Orient the source of a sudden sound • Complete the phrase “bread and …” • Make a “disgust face” when shown a horrible picture • Detect hostility in a voice • Answer to 2 + 2 =?

6. System 1 – fast thinking • Read words on large billboards • Drive a car on an empty road • Find a strong move in chess (if you are a chess master) • Understand simple sentences • Recognise that a “meek and tidy soul with a passion for detail” resembles an occupational stereotype.

7. System 2 – slow thinking • Brace for the starter gun in a race • Focus attention on the clowns in a circus • Look for a woman with white hair • Search memory to identify a surprising sound • Maintain a faster walking speed than is natural for you • Monitor the appropriateness of you behaviour in a social situation

8. System 2 – slow thinking • Count the occurrences of the letter a in a page of text • Tell someone your phone number • Park in a narrow space (for most people) • Compare two washing machines for overall value • Fill out a tax form • Check the validity of a complex logical argument

9. System 1 System 2 Both active when awake Automatically generates suggestions Intuitions Impulses Usually accepts suggestions Belief Voluntary actions

10. System 1 System 2 Tries to make sense Is polite Pays attention when driving Notices anomalies Minimise effort and optimise performance

11. System 1 Generally very good Short term predictions accurate Initial reactions swift and appropriate But Has systemic biases Doesn’t understand logic and statistics Cannot be turned off

12. System 2 (I) knows they are the same length System 1 still sees the top line longer

13. Attention & Effort System 2 is the supporting actor who thinks he’s the hero It’s operations are effortful and it is lazy

14. System 2 = hard work • Self control • Cognitive effort • Consumes glucose • Ego depletion

15. Ego depletion consequences 8 parole judges reviewing applications for parole 6 minutes each Default is denial 35% approved 65% approved after a meal 0% before next meal

16. Ego depletion consequences When System 2 is tired: • Supervisory function weak • More impulsive Impatient Keen for immediate gratification

17. A bat and a ball cost $1.10 The bat costs one dollar more than the ball How much does the bat cost? What number comes to mind? All roses are flowers Some flowers fade quickly Therefore some roses fade quickly True or false?

18. vomit

19. The Associative Machine • Experience unpleasant images and memories • face twists slightly in disgust • heart rate increases • hair on arms rises a little • sweat glands activated Attentuated version of how you would react to actual event, beyond your control • May have a temporary aversion to bananas

20. The Associative Machine • Spreading cascade of activity – memories, emotions, facial expressions • Coherent • Each element is connected • Each supports and strengthens the others • Simultaneous and immediate • Self reinforcing cognitive, emotional and physical pattern

21. Priming • Everything that happens around you effects the state of your memory • depending what you have just heard and seen you are ready to recognise and respond to associated objects and concepts SO _P

22. The Florida Effect • Students 18 – 25 NY university • Assemble 4 word sentences from 5 words Eg: “finds he it yellow instantly” One group scrambled sentences include Florida, forgetful, old, grey, wrinkle Asked to walk to another room…

23. Priming • Tests done while subjects are smiling or frowning • Nodding or shaking head • Cartoons funnier • Upsetting pics worse

24. Priming Arizona ballot to increase school funding

25. Priming • Support greater when in a school • exposure to pictures of classrooms & school lockers increased support • bigger than parents

26. Disbelief is not an option • These findings are true • They are true of YOU

27. Cognitive Ease Repeated experience Feels familiar Clear display Feels effortless Ease Primed idea Feels good Good mood Feels true

28. Anything that makes associations easier will bias beliefs Repetition makes people believe falsehood Familiarity is hard to distinguish from the truth

29. If you want people to believe something • Maximise contrast between characters and background • Text in bright blue or red • Simple language • Put in verse • Cite source easy to pronounce

30. Good mood Intuition Creativity gullibility Sadness Vigilance Suspicion Analysis approach effort System 1cluster System 2 cluster

31. Jumping to Conclusions What do these three have in common? Not aware of ambiguity Bank could have been river bank

32. System 1Neglect of Ambiguity • Not aware of ambiguity • Uncertainty and doubt belong to System 2 • When system 2 is busy or tired you are more likely to believe almost anything

33. The Halo Effect If you like one thing about a person you have tendency to like everything (and vice versa)

34. The Halo Effect • System 2 looks for confirming evidence • We seek data compatible with our beliefs • Without evidence we attribute good qualities which reinforce our view

35. What do you think of Alan & Ben? Alan: intelligent, industrious, impulsive, critical, stubborn, envious. • Ben: envious, stubborn, critical, impulsive, industrious, intelligent. • Critical and stubborn are ambiguous • We associate them with the first word

36. What you see is all there is • System 1 constructs the best possible story incorporating the ideas that have been activated but does not (cannot) allow for info it doesn’t have. • WillMindik be a good teacher? She is intelligent and strong… • Next adjectives could be corrupt & cruel • We don’t question or analyse, just produce best story available

37. Coherence seeking system 1 + lazy system 2 • We are rarely stumped • Have intuitive feelings & opinions about everything • Like or dislike on sight • Trust or distrust on sight Lazy System 2 endorses our intuitive beliefs

38. “What you see is all you get”explains many biases Overconfidence • Confidence depends on the quality of the story you can tell from what you see/hear • System 1 fails to allow for missing or critical evidence

39. “What you see is all you get”explains many biases Framing effects: Odds of survival are 90% Death within a month of surgery is 10% Meat: 90% fat free Meat: 10% fat

40. Target question Substitution Heuristic question • How much emotion do I feel when I think of dying dolphins • How much would youcontribute to save an endangered species • How happy are you with your life these days? • What is my mood right now? • How popular will the president be six months from now • How popular is the president now?

41. Substitution Heuristic question Target question • How should financial advisors who prey on the elderly be punished • How much anger do I feel when thinking of financial predators • This woman is running for the primary. How far will she go in politics? • Does this woman look like a political winner?

42. Emotions and beliefs • Our likes and dislikes determine our beliefs ie: our political preferences and which arguments we find more compelling: Red meat; nuclear power; global warming; motorcycles; irradiated food; tattoos. If you like these things you think the risks are low and vice versa.

43. System 2 acts as biased lawyer • Searches for information consistent with existing beliefs • Aplogist not critic • Fights in the court of public opinion to persuade others of system 1’s view

44. The Law of small numbers • Study of the incidence of kidney cancer in 3141 counties in the USA The counties in which the incidence of kidney cancer is lowest are mostly rural, sparsely populated, and located in traditionally Republican states in the Midwest, the South and the West. What do you make of this? Clean living, no pollution, fresh food without additives

45. The law of small numbers • Study of the incidence of kidney cancer in 3141 counties in the USA The counties in which the incidence of kidney cancer is highest are mostly rural, sparsely populated, and located in traditionally Republican states in the Midwest, the South and the West. What do you make of this? No access to medical care, high fat diet, tobacco, alcohol

46. The law of small numbers • The key factor is not Republican or rural it is sparsely populated. • Small samples yield extreme outcomes • System 1 very bad at stats • System 1 believes small samples closely resemble the population from which they are drawn.

47. System 1 • Exaggerates consistency • Suppresses ambiguity • Seeks patterns • Believes in a coherent world • Believes in causality Many facts of the world are due to Chance not causality

48. Anchoring Built to stop at 10 & 65

49. Anchoring • Is the percentage of African nations among the UN members larger or smaller than the number you just wrote? • What is your best guess of the percentage of African nations in the UN? 10 = 25% 65=45%

50. Anchoring Annual donation “to save 50000 offshore Pacific Coast seabirds from small offshore oil spills until ways are found or prevent spills or require tanker owners to pay for the operation.” No anchor ($65) Would you be willing to donate $5? ($20) Would you be willing to donate $400? ($143)