Nobel-winning psychologist Daniel Kahneman visited U of T to promote his new book (and get hailed by a fire alarm)

U of T has its fair share of Nobel Prize winners, but it’s not every day that Daniel Kahneman stops by for a visit. On December 1, the winner of the 2002 Nobel Prize in Economics made an hour-long 8 am appearance at Rotman’s Fleck Atrium for an audience of suit-clad business people and students who managed not to hit the snooze button.

Unfortunately, Toronto welcomed this distinguished guest with a fire alarm before the talk was set to begin. But glitches aside, the talk offered a look at some of psychology’s most intriguing and applicable research. In town to promote his new book, Thinking, Fast and Slow, Kahneman explained that we humans aren’t as rational as we think. The implications extend to how we make decisions, which are the foundation of managing our social, economic, and political institutions.

As Kahneman explained, we have two broad systems for thinking: System 1 is automatic, intuitive, and fast, while System 2 is effortful, logical, and slow. When we make errors, it’s usually because of System 1.

For example, take the following problem: A bat and a ball together cost $1.10. The bat costs $1.00 more than the ball. How much does the ball cost?

You’re probably thinking 10 cents. In fact, that’s how at least 50 per cent of undergraduates at Harvard, Yale, and MIT respond. But the answer is actually 5 cents.

This question exemplifies just how quickly we jump to conclusions without actually checking our answers (if you still don’t believe me, do the math in your head). That’s System 1 at work when System 2 — a lazy worker, according to Kahneman — doesn’t kick in to check on what System 1 is doing. “This system is marvelous,” said Kahneman, “and it is flawed.”

But we’re not just bad at riddles. Humans are notoriously bad at statistical thinking when we base ourselves on System 1. We ignore the actual likelihood of events like terrorist attacks or winning the lottery. These errors have a huge bearing on the way we make economic and political decisions, and they undermine the assumption of rationality on which these institutions are based.

Thinking, Fast and Slow explains decades of Kahneman’s work and goes through the thinking behind his Nobel prize-winning research. Already touted by the New York Times and Globe and Mail, the book is as entertaining as it is wise — and you would do well to read it. At 77, Kahneman himself is a firebrand, mingling brilliance with incredible modesty. In his talk, he took a moment to remember his long-time collaborator and friend, the late Amos Tversky. It’s a lesson all scientists and students should take to heart — as Kahneman recalled, “It reminds me how innovative science is done, and it’s done by having fun.”

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