“Nothing in life is as important as you think it is, while you are thinking about it”
Concise, witty, and thought-provoking. This quote represents the style of the book quite well!
I took me a while to finish this highly acclaimed book. I had to constantly put it down and think about how it links to my own actions. I would recommend everybody to read it. It challenges the way you think! Kahneman introduces many psychological phenomena that undermine our daily judgments without us noticing. Here are some of my favorite ones (probably because I’ve fallen for all of them):
“System 1” vs. “System 2”
Our brains operate in two separate systems. System 1 is fast, instinctive and emotional; “System 2” is slower, more intentional, and more rational. Unfortunately, we are more likely to think with “System 1” since it takes less effort. Ultimately we need to remind ourselves to stop being lazy, and think more than what our “intuition” tells us.
People prefer avoiding losses to acquiring gains. As a simple example in the book, people are more upset about losing $100 than happy about gaining $100. This is because of the endowment effect–people value a good that they own more than an identical good that they do not own.
Personally, this probably explains why my house used to be full of stuff that I got from random places. Let it be an old CD player, a dress that’s too big, or a bottle of lotion with a scent that I no longer liked—once I own an item, it becomes infinitely more valuable, and I wouldn’t throw it away even though it had no use. But luckily, the past 4 years of constantly moving around made me better at avoid the endowment effect—I realize that not many things are worth the effort of packing and dragging them to new apartments.
Loss aversion also explains why people have a hard time letting the past go. People hold onto memories because they fear that the future might not be as great. But this is only because they put too much value in the state they are currently in. Continue reading