Kahneman has been working since the 1970s to dismantle the idea that human economic behavior consists of rational decision making. He was given a nobel prize in 2002 for his work. This book is a continuation of that grand project. At the heart of the project is of course the contradiction of attempting to create a rational description of what the work ultimately wants to prove is irrational behavior. And within the contradiction is the deeper (unanswered) question of just what rational decision making is.

The book will be popular for many reasons. The worshippers of pure science will eat it up. The political right will see the book's conclusion as scientifically invalidating any attempts at social policy by the government. (people can't be helped because they are not rational) The political left will see the book's conclusion as scientifically invalidating the idea of free market economics in favor of the nanny state. (people can't make their own decisions and need the government to decide for them). The success of Kahneman as a writer is that he has created something that can appeal to a whole lot of people.

What drags down the book is its arrogance and tendency to operate at the boundary between philosophy and observational science. The author also has always had a habit of staying away from the bigger questions just below the surface of his work: The nature and definition of rationality itself. Are statistics and basic logic themselves rational? Can irrational behavior ever really be expressed or described by the arch rational model?

This is at its worst when the author comes back to now famous Linda problem. He admits the controversy around the problem but fails to really address it properly in the book. The Linda problem (in one form) gives a minimum amount of background about a person and then asks which is the more probable of two conclusions. The "correct" answer is based on what is called "reason" but which is in fact a strict interpretation of the question based on statistics and narrow, formal logic. A correct rational answer to the question might be that the information provided is insufficient to make any deduction and that forcing a choice between two alternatives is a false choice. But the author's view is that reason requires the mathematical answer that the probabilty of two conditions being true is always less than the probability of one condition being true. His answer is correct....but it is the only rational answer? Absolutely not. His right answer is the product of defining reason as the sole product of statistics and AND/OR/NOT style logic. Further, its the product of reading a question with a particular mindset in a particular way. The experiment is useful in capturing a type of decision people make. But using it to make a qualtitative judgement about that decision (irrational) is not useful. Its a prime example of how the author overreaches in various ways.

The author in the book comes up with an abstract structural model of human behavior. He divides reasoning into "system 1" (fast) and "system 2" (slow). Its very cute and very useful in this arguments. But I didn't find it very convincing. It doesn't seem to be speed that the issue. Its the approach and the context of the problem. Most people just don't treat life as an endless series of statistics and AND/OR/NOT logic problems on an SAT test. They don't treat decisions that way for good reasons. In particular, IMO, because rational decision making isn't equal to probabilistic statistical decision making or AND/OR/NOT logic. What the author seems IMO to be running into is the problems of his limited math-based model to represent human decision making rather than human decision making necessarly being irrational.

I found the observations in the book about human behavior interesting (the raw data). But not the author's interpretations, models or conclusions about the behavior. The models overreach too much in their conclusions and are too simplisitic (the curse of the so-called social sciences). To me, understanding that people will usually react a particular way in a given situation (observation) is far more interesting than coming up with a half-baked theory explaining "why".
Kahneman has been working since the 1970s to dismantle the idea that human economic behavior consists of rational decision making. He was given a nobel prize in 2002 for his work. This book is a continuation of that grand project. At the heart of the project is of course the contradiction of attempting to create a rational description of what the work ultimately wants to prove is irrational behavior. And within the contradiction is the deeper (unanswered) question of just what rational decision making is. The book will be popular for many reasons. The worshippers of pure science will eat it up. The political right will see the book's conclusion as scientifically invalidating any attempts at social policy by the government. (people can't be helped because they are not rational) The political left will see the book's conclusion as scientifically invalidating the idea of free market economics in favor of the nanny state. (people can't make their own decisions and need the government to decide for them). The success of Kahneman as a writer is that he has created something that can appeal to a whole lot of people. What drags down the book is its arrogance and tendency to operate at the boundary between philosophy and observational science. The author also has always had a habit of staying away from the bigger questions just below the surface of his work: The nature and definition of rationality itself. Are statistics and basic logic themselves rational? Can irrational behavior ever really be expressed or described by the arch rational model? This is at its worst when the author comes back to now famous Linda problem. He admits the controversy around the problem but fails to really address it properly in the book. The Linda problem (in one form) gives a minimum amount of background about a person and then asks which is the more probable of two conclusions. The "correct" answer is based on what is called "reason" but which is in fact a strict interpretation of the question based on statistics and narrow, formal logic. A correct rational answer to the question might be that the information provided is insufficient to make any deduction and that forcing a choice between two alternatives is a false choice. But the author's view is that reason requires the mathematical answer that the probabilty of two conditions being true is always less than the probability of one condition being true. His answer is correct.... but it is the only rational answer? Absolutely not. His right answer is the product of defining reason as the sole product of statistics and AND/OR/NOT style logic. Further, its the product of reading a question with a particular mindset in a particular way. The experiment is useful in capturing a type of decision people make. But using it to make a qualtitative judgement about that decision (irrational) is not useful. Its a prime example of how the author overreaches in various ways. The author in the book comes up with an abstract structural model of human behavior. He divides reasoning into "system 1" (fast) and "system 2" (slow). Its very cute and very useful in this arguments. But I didn't find it very convincing. It doesn't seem to be speed that the issue. Its the approach and the context of the problem. Most people just don't treat life as an endless series of statistics and AND/OR/NOT logic problems on an SAT test. They don't treat decisions that way for good reasons. In particular, IMO, because rational decision making isn't equal to probabilistic statistical decision making or AND/OR/NOT logic. What the author seems IMO to be running into is the problems of his limited math-based model to represent human decision making rather than human decision making necessarly being irrational. I found the observations in the book about human behavior interesting (the raw data). But not the author's interpretations, models or conclusions about the behavior. The models overreach too much in their conclusions and are too simplisitic (the curse of the so-called social sciences). To me, understanding that people will usually react a particular way in a given situation (observation) is far more interesting than coming up with a half-baked theory explaining "why".