This could read as the start of an 'unauthorised instruction book of your brain' that you didn't know you needed, but won't be able to live without.
It's a foundational model in behavioural economics that will help inform your understanding of cognitive biases, behaviour change and humanity in general.
Nobel Prize winner Daniel Kahneman’s mental model of Fast and Slow Thinking underpins behavioural economics by explaining how you live most of your life on automatic pilot, are essentially irrational, and prone to cognitive biases.
TWO THINKING SYSTEMS.
Kahneman’s findings are captured in his 2011 bestselling book Thinking Fast and Slow where he describes two distinct thinking systems:
- Fast thinking (system 1): which is automatic, intuitive, error-prone and used for most common decisions. This is by far the majority of how we think each day.
- Slow thinking (system 2): which is effortful, reasoned, more reliable and used for complex decisions.
Fast thinking is a primal survival mechanism that uses heuristics, or cognitive shortcuts, to quickly respond to threats. It’s fast but those shortcuts are ultimately unreliable. In contrast, slow thinking requires considerable attention and delivers a more accurate understanding.
Kahneman’s work confirms that your brain instinctively prioritises conserving energy and overly relies on fast thinking as a result.
The point — you'll be on autopilot for most of your life, which opens up all sorts of implications...
IN YOUR LATTICEWORK.
Fast and slow thinking is one of the most significant mental models listed on ModelThinkners because it underpins so much of our modern understanding of behavioural science, behavioural economics, psychology, marketing and humanity.
- ‘Econs’ and other rational models of humanity are as flawed as we are.
Econs was coined by economist Richard Thaler to describe the rationale, logical people who are the basis for traditional economic models. Thaler argues that Kahneman’s work instead poses ‘humans’ who are often illogical, act on intuition over logic and act irrationally. This is a simple distinction that contrasts traditional economics vs behavioural economics, but it is one that can be used to challenge assumptions in other areas also.
- You aren’t just irrational, you are rationalising.
Even when you switch to slow thinking you will have a tendency to justify and rationalise your fast thinking, impulsive decisions.
- Fast thinking can be advantageous via expertise and consistent environmental factors.
Experts build up stronger and more reliable heuristics for specific situations — that’s mastery. As a result, experts' fast thinking within their domain will be more reliable. That said, they too will suffer from slight environmental changes that their fast thinking will likely not identify or read accurately.
- Cognitive biases are unavoidable.
The process of being in automatic pilot, of fast thinking, for much of your life, leaves you susceptible to unconscious biases. This is unavoidable so the best you can do is identify likely biases, try to interrupt them, and organise processes or systems to mitigate them. Specific biases and heuristics are explored in other models.
- People are susceptible to nudges.
Another implication of fast thinking and following the path of least resistance is that people are susceptible to nudges, or tweaks to the environment which reduce friction, provide extra resistance and generally encourage particular behaviours.
- You have limited cognitive power, use it strategically.
Slow thinking is powerful but effortful. Set yourself up to use is at important moments for key decisions. There’s a reason why the likes of Steve Jobs and President Obama wore similar clothes each day — they were relying on fast thinking for the small stuff and saving their cognitive juice for the important decisions.
Consider the sum 2 + 2. That’s an easily recognisable equation that your brain probably calculated instinctively, using fast thinking.
Now consider 14 x 38. That’s more complicated and, it will likely require you to apply conscious effort, or slow thinking, to determine the answer.
Cruising vs reverse parking.
Remember the last time you drove down an empty familiar road? You likely did it in automatic pilot, barely being conscious about the decisions and process you were applying to continue your drive.
Compare that with the effort taken to reverse park into a tight spot. In such cases, you invoke slow thinking to ensure your judgement is more considered and accurate.
There are countless examples and experiments that outline the implications of fast and slow thinking in the form of cognitive biases. However, rather than list them here, they are spelt out under specific biases — see the ‘build your latticework’ section for links.
The fourth chapter of Kahneman’s book came under criticism for citing a study around association that was unable to be effectively replicated. Kahneman has since acknowledged the study’s limitations and that he placed too much faith in the underpowered studies.
While some have used this one exception to criticise his broader thesis, others make the point that Kahneman essentially falling victim to bias has reinforced his findings.
Fast and slow thinking is one of the most significant mental models we have listed because it underpins so much of our modern understanding of behavioural science, behavioural economics, psychology, marketing and humanity.
Use the following examples of connected and complementary models to weave fast and slow thinking into your broader latticework of mental models. Alternatively, discover your own connections by exploring the category list above.
- Availability heuristic: useful sometimes, an unconscious bias at others.
- The map is not the territory: a reminder that in both forms of thought we still rely on interpretations and simplifications.
- Munger’s latticework: use the notion of strategic slow thinking to carefully select relevant models for your context.
- Split testing & A/B testing: highly leveraged by Kahneman in his work.
- 4Ps of marketing: design marketing campaigns around the truth of fast thinking rather than the aspiration of slow thinking.
- Habit formation and EAST framework (nudges): use habits and nudges to create better results while on autopilot.
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