How to Think Fast & Slow

• Do keep natural impulse in check. Kahneman says we have two systems of thought — fast, based on intuition and impulse; and slow, based on calculation. We naturally lean to fast, especially when tired, but need to know when to distrust it. For example, it works for predicting likeability but slow thinking may be needed to supplement it and see how efficient someone might be at a certain job.
• Do teach yourself to think long-term. The “focusing illusion” makes the here and now appear the most pressing concern but that can lead to skewed results.
• Do be fair. Research shows that employers who are unjust are punished by reduced productivity, and unfair prices lead to a loss in sales.
• Do co-operate. What Kahneman calls “bias blindness” means it’s easier to recognise the errors of others than our own so ask for constructive criticism and be prepared to call out others on what they could improve.
• Do present totals rather than losses for more rational reactions. People naturally focus on differences rather than stand-alone objects. So investors are more affected by changes in wealth than by wealth itself. Counteract this by telling them how much they have rather than how much they have lost.
• Do keep things in perspective. “Experienced” well-being is different to “remembered” well-being. The remembering self does not care about the duration of a good or bad experience but rates it by the highest or lowest point and the way it ends.
• Don’t let failure bring you down. However much you plan, random chance has a powerful influence and failure of any kind is statistically followed by success.
• Don’t put all your faith in fund managers and accountants. Kahneman’s analysis of their long-term performance reveals it is not skill but luck that is responsible for their successes.
• Don’t ignore feelings. Happiness is a real experience; therefore it can be measured, studied and understood, as a goal for society and influencing economics.
• Don’t succumb to “the illusion of validity”. Repetition and clarity can make “facts” appear true when actually we must continue to question them.
• Don’t frown if you want people to do as you ask. A negative expression causes people to be more analytical and questioning.

- Daniel Kahneman on Luck and his book Thinking, Fast and Slow