Here's the interview with Daniel Kahneman, the founder of the fascinating field called Behavioral Economics. A very humble human being, Naseem Taleb rightly calls Kahneman, the only person who deserved the Noble prize for Economics (2002). Kahneman, born in Israel and Taleb born in Lebnon make a unique pair, showing the world what can be achived if we learn to co-exist.
Kahneman stroy is an another vidication of how our childhood events have such a profound influence on our future decisions: (again that "pre-analytic cognitive act")
"Like many other Jews, I suppose, I grew up in a world that consisted exclusively of people and words, and most of the words were about people. Nature barely existed, and I never learned to identify flowers or to appreciate animals,” he said in his autobiography. “But the people my mother liked to talk about with her friends and with my father were fascinating in their complexity. Some people were better than others, but the best were far from perfect and no one was simply bad.” Most of her stories were touched by irony, he says, and they all had two sides or more.
An early event in Nazi-occupied Paris that he remembers vividly left a lasting impression because of varied shades of meaning and implications about human nature. “It must have been late 1941 or early 1942. Jews were required to wear the Star of David and to obey a 6 p.m. curfew. I had gone to play with a Christian friend and had stayed too late. I turned my brown sweater inside out to walk the few blocks home. As I was walking down an empty street, I saw a German soldier approaching. He was wearing the black uniform that I had been told to fear more than others—the one worn by specially recruited SS soldiers. As I came closer to him, trying to walk fast, I noticed that he was looking at me intently. Then he beckoned me over, picked me up, and hugged me. I was terrified that he would notice the star inside my sweater. He was speaking to me with great emotion, in German. When he put me down, he opened his wallet, showed me a picture of a boy, and gave me some money. I went home more certain than ever that my mother was right: people were endlessly complicated and interesting.”
It was Kahneman influence, which made the current new breed of very talented behavioural economists possible including Richard Thalper (my favorite book Nudge, the co-author Cass Sustien is the Director of the White House OMB Office of Information and Regulatory Affairs)
"Kahneman points to his collaboration with longtime research partner and friend Richard Thaler, professor of economics and behavioral science at the University of Chicago, as contributing to the development of the field of behavioral economics.
Although I do not wish to renounce any credit for my contribution, I should say that in my view the work of integration was actually done mostly by Thaler and the group of young economists that quickly began to form around him, starting with Colin Camerer and George Loewenstein, and followed by the likes of Matthew Rabin, David Laibson, Terry Odean, and Sendhil Mullainathan.”
Currently, Kahneman has moved on from behaviour economics and focuses on studying hedonics!! (although he didnt coin the term "hedonic treadmill")
Men like Kahneman are a rare dying breed, even after all these accomplishments, humility oozes out of him and one can feel the prepectual calmness in his eyes. We need more men like him not only in economics but every other field. We are indebted to this great man, for dedicating his life in making us understand who we are and how it reflects on society as a whole. I believe, behavioral economics is one of those fields waiting for the rocket fuel called Neuroscience.
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