Fact: Your brain hates using energy 🧠

Atomic ideas from 'Thinking: Fast and Slow'

Imagine this:

There is an outbreak of a deadly disease that will kill 600 people and you must choose between the two options -

• Option 1: Guarantees that 200 people will live.

• Option 2: Provides a one-third probability that all 600 people will live, but it also comes with a 1/3 probability that no one will survive.

Which one will you choose?

Before we move forward, a quick update:

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Given that Feb month theme is ‘decision making’, the one book which I believe is the OG of all decision making theory is Thinking Fast and Slow: by Daniel Kahnemann. The book outlines the two most common approaches our brains utilize when it comes to decision making: the system 1 and system 2 thinking.

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Sharing 5 atomic ideas from the book but let me answer the question that was presented in the beginning (the deadly disease poll).

You might have chosen option 1 - due to loss aversion.
If you think through the two choices, you can see that the probabilities of each are identical! 😎

This is called the framing effect - i.e. your decision/opinion changes depending on how the problem statement is framed.

And now, time for big #atomicIdeas:

“Nothing in life is as important as you think it is, while you are thinking about it” [Daniel Kahneman, quote from Thinking, Fast and Slow]

Welcome to today’s edition of the newsletter where we will think fast, and slow and understand the two most common approaches our brains utilize when it comes to decision making.

I. The two systems of thinking

• System 1 comprises the oldest parts of the brain. It operates automatically and involuntarily. This system is always functioning and is responsible for most of the day-to-day activities. It is also responsible for our reactions to danger, novelty, and intuition.

• System 2 allocates attention and completes tasks that require effort. System 2 is a newly evolved part of the brain, and only humans have a highly developed prefrontal cortex.

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II. Your brain HATES using energy 🙂

“A general “law of least effort” applies to cognitive as well as physicalexertion. The law asserts that if there are several ways of achieving thesame goal, people will eventually gravitate to the least demanding courseof action. In the economy of action, effort is a cost, and the acquisition ofskill is driven by the balance of benefits and costs. Laziness is built deep into our nature.”