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?
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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.
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.
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.”
Your brain HATES using energy. It wants to be at peace, it wants to feel relaxed.
It likes things that are familiar, it likes things that are simple to understand. It is drawn to things that make it feel like it’s in a safe environment.
This is Cognitive Ease.
“This is the essence of intuitive heuristics: when faced with a difficult question, we often answer an easier one instead, usually without noticing the substitution.”
III. WYSIATI (What You See Is All There Is)
Our brains can confidently form conclusions based on limited evidence. We readily form opinions based on very little information, and then are confident in those opinions.
WYSIATI is one of the reasons why modern politics is so polarizing.
People take the cognitively easy route of listening to others on “their side”, until eventually the only information you’re exposed to is the ones that confirm your existing beliefs.
System 1 loves to use limited information to form quick judgments and then block out conflicting information. The author Daniel Kahneman calls it W.Y.S.I.A.T.I. (What You See Is All There Is).
Kahneman explains that System 1 sees two or three pieces of information and then “infers and invents causes and intentions, then neglects ambiguity and suppresses doubt.”
Just try to ask, “Why might the opposite be true?”
IV. Anchoring Effect
Anchors are arbitrary values that we consider for an unknown quantity before encountering that quantity.
Anchors are known to influence many things, including the amount of money people are willing to pay for products they have not seen.
So before choosing the anchors, just do research on the thing and then decide.
V. Availability Bias
The bias of availability happens when we give too much weight to recent evidence or experience.
If we don’t check for the "availability bias" (or what psychologists call the "mere exposure effect") prior to making an important decision, then our preference will be based on environmental conditioning.
So before each decision, just ask “Is this the best option or just the option I've been frequently exposed to?”