How do we think? Daniel Kahneman’s Two Systems of Thought

A theory that stresses the importance of our thinking... which operates through two systems.

According to author Shanon M. Koening, people have 60,000 thoughts a day and most of them are negative. Such a shocking figure raises the question of how little we know about thinking and how much influence it has on our behavior and decision making.

Daniel Kahneman, a Nobel Prize-winning psychologist

A renowned American psychologist realized the importance of thinking and his research led to his being awarded the his research led him to be awarded the Nobel Prize in Economics in 2001.. To explain the theory that led him to win the Nobel Prize, Kahneman begins by posing the following puzzle to his students:

Don't try to solve this exercise and try to use your intuition:

A bat and a ball cost 1.10. The bat costs a dollar more than the ball.How much does the ball cost?

The answer of 10 cents is presented as a quick, powerful and appealing intuition, but it is incorrect.

To arrive at the correct solution, 5 cents, many of us will have to resort to pencil and paper, transforming the riddle into a mathematical equation. We will have to resort to the slowest and most tiring way of thinking that our brains allow. Some psychologists consider that this type of test is a more valid predictor of intelligence than ordinary IQ tests.. In this case, it serves to illustrate that intuitions can be wrong, no matter how powerful they seem.

Kahneman uses this example to describe the two different ways in which the mind creates thought.

First, there is the System 1 or implicit. This way of thinking is fast, automatic, frequent, emotional, stereotyped and subconscious. On the other hand, there is the System 2 or explicit. It is slow, lazy, infrequent, logical, calculating and is accompanied by the awareness of solving a problem.

These two systems of antagonistic nature are found in the day to day decisions of our lives.

How do the 2 systems of thought work?

The quick solution of 10 cents that you came up with at the beginning of the exercise is due to the functioning of System 1 offering you a reasonable answer. However, when you used the pen and paper, you used System 2, which this time gave you the correct solution of 5 cents, a slower and more expensive solution, but the correct answer after all.

This is because System 1, driven by intuition and heuristics, allows us to do simple tasks such as walking or brushing our teeth without effort.. In contrast, system 2 will be in play when we are doing the more complicated tasks, such as learning to drive.

Both system 1 and system 2 are continuously active and in communication. System 1 determines our thoughts with external perceptions, visual and associative memory, and then develops a framed conclusion, and one that we don't even question, thus avoiding any alternative story. The challenge is that it usually does a good job, so that we can trust it.

Intuitions guide our day-to-day lives

Using the theory of heuristics, Kahneman states that system 1 associates new information with existing patterns, or thoughts, rather than creating new patterns for each new experience.a. This gives rise to different types of biases. System 1, by generating narrow and framed thinking, tries to show that it leads right to confirmation bias. Confirmation bias leads people to ignore some evidence that contradicts such thinking, and is one of the biggest single problems when companies make decisions.

Ultimately, people tend to look for information that validates their initial hypothesis. Kahneman details a series of experiments that aim to highlight the differences between these two thought processes and how they arrive at different results even though they receive the same information.

Now you know a little more about those products that your brain generates an average of 60,000 times a day, and how many of them are generated quickly and without taking into account all the information present, leading to erroneous conclusions.

So, the next time you make a bad decision, don't hold it against yourself.. You now know that it is system 1 acting automatically and that the best decision you can make is to take pen and paper so that thought system 2 is activated and leads you to make the right decisions.