Thinking, Fast and Slow

Daniel Kahneman describes two modes of thinking that govern our decisions. <strong>System 1</strong> is fast, intuitive and automatic, while <strong>System 2</strong> is slow, deliberate and effortful. The book shows how these two systems interact and why System 1, useful as it is, exposes us to many errors of judgment.

<strong>Anchoring</strong> is a bias that leads us to rely on the first piece of information we receive when estimating a value, even if that starting point is arbitrary. For example, an initial displayed price strongly influences what we later consider reasonable. Kahneman shows that this System 1 mechanism skews our judgments without our being aware of it.

Kahneman, drawing on the research he conducted alongside Amos Tversky, shows that we feel a loss roughly twice as intensely as an equivalent gain. This <strong>loss aversion</strong> often makes us overly cautious and drives us to make irrational decisions just to avoid losing. It sits at the heart of prospect theory.

This psychology book is for anyone curious about how we think and why we get things wrong. Rich and dense, it demands focus, but its examples make it accessible. Cobalt offers a structured summary you can read in a few minutes to grasp the main biases described by Daniel Kahneman.