Thinking, fast and slow
Nobel laureate Daniel Kahneman
Optimism as a source of danger
Nobel laureate Daniel Kahneman has repeatedly addressed the consequences of risk aversion and excessive optimism in his work. In his lecture at the University of Zurich, he focused on the economic consequences of decisions made by risk-averse and risk-taking individuals, drawing on his famous book Thinking, Fast and Slow. This article summarizing the UBS Center Opinions event was published in the Neue Zürcher Zeitung on 17 April 2013.
This summary is part of a compilation of speeches delivered by Nobel laureates at UBS Center events. We invite you to explore our Nobel Opinions and find out more about their research, their vision, and their solutions to address some of the most pressing issues of our time.
Nobel laureate Daniel Kahneman has repeatedly addressed the consequences of risk aversion and excessive optimism in his work. In his lecture at the University of Zurich, he focused on the economic consequences of decisions made by risk-averse and risk-taking individuals, drawing on his famous book Thinking, Fast and Slow. This article summarizing the UBS Center Opinions event was published in the Neue Zürcher Zeitung on 17 April 2013.
This summary is part of a compilation of speeches delivered by Nobel laureates at UBS Center events. We invite you to explore our Nobel Opinions and find out more about their research, their vision, and their solutions to address some of the most pressing issues of our time.
Organizations are slow thinkers
On April 16, 2013, Nobel laureate Daniel Kahneman gave an overview of his book Thinking, Fast and Slow at the University of Zurich. His lecture was open to the public. Kahneman distinguishes between fast thinking and slow thinking. Slow thinking could be described as conscious, informed thinking, fast thinking as unconscious and instinct. Both slow and fast thinking are part of human nature, as are risk aversion and optimism. According to Kahneman, people respond more strongly to losses than to gains. Risk or loss aversion leads people to resist change and to try to preserve the status quo. Being too optimistic doesn’t help either as optimists tend to underestimate risks. Kahneman compares an organization with a slow thinker and sees a number of advantages in this. In his view, organizations are better able to avoid bias and unjustified optimism, and their leaders are less susceptible to loss aversion as they are taking decisions on behalf of others.
On April 16, 2013, Nobel laureate Daniel Kahneman gave an overview of his book Thinking, Fast and Slow at the University of Zurich. His lecture was open to the public. Kahneman distinguishes between fast thinking and slow thinking. Slow thinking could be described as conscious, informed thinking, fast thinking as unconscious and instinct. Both slow and fast thinking are part of human nature, as are risk aversion and optimism. According to Kahneman, people respond more strongly to losses than to gains. Risk or loss aversion leads people to resist change and to try to preserve the status quo. Being too optimistic doesn’t help either as optimists tend to underestimate risks. Kahneman compares an organization with a slow thinker and sees a number of advantages in this. In his view, organizations are better able to avoid bias and unjustified optimism, and their leaders are less susceptible to loss aversion as they are taking decisions on behalf of others.
Video
How does culture influence economic behavior?
Culture is a core element of human coexistence and encompasses all areas of life, including the economy. The influence of culture on various economic dimensions is the subject of numerous studies and provides important insights into core issues of economic behavior: Which rules and incentives are needed for a successful corporate culture? What role do cultural values play in financial decisions? How can we identify and change harmful practices based on misbeliefs and misconceptions?
Culture is a core element of human coexistence and encompasses all areas of life, including the economy. The influence of culture on various economic dimensions is the subject of numerous studies and provides important insights into core issues of economic behavior: Which rules and incentives are needed for a successful corporate culture? What role do cultural values play in financial decisions? How can we identify and change harmful practices based on misbeliefs and misconceptions?
UBS Nobel Perspectives
To help address the big questions that shape our world, UBS has sought out a number of Nobel laureates in Economic Sciences to ask them to share insights, discuss their research, and open their inquiring minds.
Kahneman dedicated his academic live to the psychological phenomena around judgement and decision-making, establishing a new way of thinking about human errors based on heuristics and biases. Explore various videos with Daniel Kahneman.
To help address the big questions that shape our world, UBS has sought out a number of Nobel laureates in Economic Sciences to ask them to share insights, discuss their research, and open their inquiring minds.
Kahneman dedicated his academic live to the psychological phenomena around judgement and decision-making, establishing a new way of thinking about human errors based on heuristics and biases. Explore various videos with Daniel Kahneman.
How we make decisions
On the occasion of Daniel Kahneman’s 90th birthday, the Austrian broadcaster ORF is highlighting some of the researcher’s key findings in a podcast series (in German). The podcast entitled How we make decisions presents Kahneman’s exploration of human decision-making and its irritations. Ernst Fehr is one of the featured guests. He underlines the importance of Kahneman’s research for behavioral economics.
On the occasion of Daniel Kahneman’s 90th birthday, the Austrian broadcaster ORF is highlighting some of the researcher’s key findings in a podcast series (in German). The podcast entitled How we make decisions presents Kahneman’s exploration of human decision-making and its irritations. Ernst Fehr is one of the featured guests. He underlines the importance of Kahneman’s research for behavioral economics.
Speaker
Daniel Kahneman was Professor of Psychology and Public Affairs, Emeritus, and Senior Scholar, Woodrow Wilson School, Princeton University. His research interests included psychology of judgment and decision-making (e.g. cognitive basis for common human errors), and behavioral economics and hedonic psychology. In 2002, he won the Nobel Memorial Prize in Economics. His current book, "Thinking, Fast and Slow", has become an international bestseller.
Daniel Kahneman was Professor of Psychology and Public Affairs, Emeritus, and Senior Scholar, Woodrow Wilson School, Princeton University. His research interests included psychology of judgment and decision-making (e.g. cognitive basis for common human errors), and behavioral economics and hedonic psychology. In 2002, he won the Nobel Memorial Prize in Economics. His current book, "Thinking, Fast and Slow", has become an international bestseller.