Thinking, Fast and Slow

“The confidence that individuals have in their beliefs depends mostly on the quality of the story they can tell about what they see, even if they see little.”

 -Daniel Khaneman

When I was in college, I started out thinking I would study philosophy, before one of my professors convinced me to switch to psychology given my interests in why people think and do what they do. I later pivoted to economics, given my interest in human behavior in a business context. After school, I focused on consulting to the marketing and media ecosystem. It should therefore come as no surprise that Thinking Fast and Slow is one of my favorite books!

This book showcases Dr. Kahneman’s Nobel Prize winning work. It’s incredibly applicable to shopper insights, where consumers build up habit loops and engage less in more active search for solutions unless they experience pain points and friction on their path to purchase. In the book, Dr. Kahneman delves deeply into the study of human judgment and choices, and systematic errors we make despite our best intentions. He discusses the difference between System 1 and System 2 types of thought, where the first are automatic responses (think fast) and the latter are more controlled operations (think slow). You can also think of these as the difference between unconscious and conscious thought.

Dr. Kahneman has dedicated much of his illustrious career on research into biases in human judgment. It turns out that we are much better at intuitive judgments relying on associative memory and metaphors than statistics. This paved the way for the field of behavioral economics. It’s also had a huge influence on the field of shopper marketing and customer insights, focusing attention on the importance of emotion and unconscious thought along the customer journey. See also my reviews of The Power of Habit and Clued In for more on the importance of emotion and habit-building loops for building customer loyalty.