![]() ![]() This work, which incorporates psychological insights into the study of decision-making, has since blossomed into behavioral economics and influenced a range of other disciplines as well as public policy. Part 4 reviews much of Kahneman’s work with Amos Tversky in developing prospect theory, which showed the errors of then-dominant economic theory. Parts 2, 3, and 4 tour the heuristics, biases, illusions, and aspects of human thinking that frequently lead to illogical decisions and other errors. In between these two presentations of the mind as divided, Kahneman discusses a vast array of complex psychological processes that constitute how people actually-and often illogically-make decisions. In Part 5, Kahneman discusses two “selves,” which can be understood as an experiencing self that lives in the moment and a remembering self that is more evaluative and draws on the memory’s storage of past experiences. These systems of thinking include the “fast” thinking, intuitive System 1, which governs most decisions most of the time, and the “slow” thinking System 2, which comes into play for careful evaluation, such as one might use to solve a complicated math problem. In Part 1, he discusses the two systems of thinking, System 1 and System 2. The first and third lenses rely on partially opposed, partially collaborative “characters” that Kahneman crafts to represent facets of the human mind. Kahneman presents the human mind when making decisions through three types of lenses, each represented by one or more parts of the book. ![]()
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