Thinking fast and slow

System 1 vs 2
 View of rationality
• 1970s believed that people are generally
rational
• Strong emotions cause departure from
rationality

Since then behavioural psychologists and

economists have developed a different view
based on an analysis of how we think…
 System 1 thinking

How does this woman feel?

 System 2 thinking

17 x 24 =

• Deliberate
• Effortful
• Orderly
 System 1 – fast thinking
• Detect one object is more distant than
another
• Orient the source of a sudden sound
• Complete the phrase “bread and …”
• Make a “disgust face” when shown a horrible
picture
• Detect hostility in a voice
• Answer to 2 + 2 =?
 System 1 – fast thinking

• Read words on large billboards

• Drive a car on an empty road
• Find a strong move in chess (if you are a chess
master)
• Understand simple sentences
• Recognise that a “meek and tidy soul with a
passion for detail” resembles an occupational
stereotype
(Can do many simultaneously)
 System 2 – slow thinking
• Brace for the starter gun in a race
• Focus attention on the clowns in a circus
• Look for a woman with white hair
• Search memory to identify a surprising sound
• Maintain a faster walking speed than is natural
for you
• Monitor the appropriateness of you behaviour
in a social situation
 System 2 – slow thinking
• Count the occurrences of the letter a in a page of
text
• Tell someone your phone number
• Park in a narrow space (for most people)
• Compare two washing machines for overall value
• Fill out a tax form
• Check the validity of a complex logical argument

(Effortful and cannot do more than one at the same

time)
• https://www.youtube.com/watch?
v=kjH6TS3ZK_s
System System
1 2

Both active when awake

Automatically Usually accepts

generates suggestions
suggestions
Intuitions Belief
Impulses Voluntary actions
• Seeing and orienting are automatic functions
of system 1 – but they depend on the
allocation of some attention to relevant
stimulus
• Interaction of system 1 & 2
• System 2 adopts suggestions of system 1 with
little or no modifications. (most of the times)
• When system 1 runs into difficulty – system 2
is summoned
 System 1 System 2
• Tries to make sense
• Is polite

Notices • Pays attention when

anomalies driving

Minimise effort and optimise performance

1 runs into difficulty when an event violates a model – 2 is activated
• One of the tasks of system 2 is to
overcome impulses of system 1.

• System 2 is In charge of self control

 System 1
Generally very good
Short term predictions accurate
Initial reactions swift and appropriate

But
Has systemic biases
Doesn’t understand logic and statistics
Cannot be turned off
System 2 (I) knows they are the same length

System 1 still sees the top line longer

 Attention & Effort
System 2 is the supporting actor who thinks he’s
the hero

It’s operations are effortful and it is lazy

Maintaining a coherent train of thought requires
discipline – it is hard work
 System 2 = hard work
• Self control
• Cognitive effort
• Consumes glucose
• Ego depletion

Nervous system and effortful mental activity

consumes most glucose – taking glucose
improves performance!

After one task - give up quicker on the next

 EGO DEPLETION
• Ego depletion is a theory that suggests that
willpower is linked to a limited amount of
mental energy.
• When this energy is low, self-control is
impaired.
 Ego depletion consequences

8 parole judges reviewing applications for parole

6 minutes each
Default is denial
35% approved
65% approved after a meal
0% before next meal
 Ego depletion consequences
When System 2 is tired:

• Supervisory function weak

• More impulsive
Impatient
Keen for immediate gratification
A bat and a ball cost $1.10
The bat costs one dollar more than the ball
How much does the bat cost?

What number comes to mind?

All roses are flowers

Some flowers fade quickly
Therefore some roses fade quickly

True or false?
Cognitive work is not always aversive

Concept of FLOW
State of effortless concentration so deep
that people loose their sense of time

Cognitively busy people are more likely to

make selfish choices, use sexist language,
make superficial judgements
vomit
 The Associative Machine
• Experience unpleasant images and memories
• face twists slightly in disgust
• heart rate increases
Attentuated version of how you would react to
actual event, beyond your control
• May have a temporary aversion to bananas
• Mind automatically assumed temporal
sequence
 The Associative Machine
• Associative activation: Spreading cascade of
activity – memories, emotions, facial expressions
• Coherent
• Each element is connected
• Each supports and strengthens the others
• Simultaneous and immediate
• Self reinforcing cognitive, emotional and physical
pattern
• Representation of reality
• Association of ideas: Resemblance, contiguity
in time/place and causality

• Breakthrough in way in which association is

measured.
 Priming
• Everything that happens around you
effects the state of your memory

• depending what you have just heard and

seen you are ready to recognise and
respond to associated objects and concepts

SO _P
• Priming – beyond concepts & Words
 The Florida Effect
• Students 18 – 25 NY university
• Assemble 4 word sentences from 5 words
Eg: “finds he it yellow instantly”

One group scrambled sentences include

Florida, forgetful, old, grey, wrinkle

Asked to walk to another room…

Ideomotor effect
 Priming

• Tests done while subjects are smiling or

frowning
• Nodding or shaking head
• Cartoons funnier
 Priming

Arizona ballot to increase school funding

 Priming
• Support greater when in a school
• exposure to pictures of classrooms & school
lockers increased support; bigger among parents

• Money primed people become independent

• Selfish, Not willing to help others, Individualism
• Effects of priming are robust but not large
• Cultures provide reminders about _______
 Disbelief is not an option
• These findings are
true

• They are true of YOU

• What does priming tell us about
System 1 & System 2?

System 1 >> impressions >>

beliefs>> choices >> actions
 Cognitive Ease

Repeated
experience Feels familiar

Clear display Feels effortless

Ease
Primed idea Feels good
Good mood Feels true

Cognitive strain is affected by current level of effort and presence

of unmet demands.
Anything that makes associations easier will
bias beliefs

Repetition makes people believe falsehood

Familiarity is hard to distinguish from the truth

 If you want people to believe something

• Maximise contrast between characters and

background
• Text in bright blue or red
• Simple language
• Put in verse
• Cite source easy to pronounce

Cognitive ease >>> summons system 1>> good feelings

Cognitive strain >> mobilizes system 2
 Mere exposure effect
• More exposure >> • System 1 can respond
something good to impressions of events
• Less exposure>> of which system 2 is
something bad (not unaware.
good)

The link between positive emotion and cognitive ease in

system 1 has a long evolutionary history
 Ease, Mood and Intuition
• Creativity is associative
memory that works
exceptionally well.

Remote association test

Cottage, Swiss & Cake
Dive, Light, Rocket

Mood influences
performance of __________
System 1 cluster System 2 cluster

Sadness
Good mood Vigilance
Intuition Suspicion
Creativity Analysis
gullibility approach
effort
 Jumping to Conclusions

What do these three have in common?

Not aware of ambiguity

Bank could have been river bank
 System 1
Neglect of Ambiguity

• Not aware of ambiguity

• Uncertainty and doubt belong to System 2
• When system 2 is busy or tired you are more
likely to believe almost anything
 The Halo Effect

If you like one thing about a person you have

tendency to like everything (and vice versa)
 The Halo Effect

• System 2 looks for confirming evidence

• We seek data compatible with our beliefs
• Without evidence we attribute good
qualities which reinforce our view
 What do you think of Alan & Ben?

Alan: intelligent, industrious, impulsive, critical,

stubborn, envious.

Ben: envious, stubborn, critical, impulsive,

industrious, intelligent.

Critical and stubborn are ambiguous

We associate them with the first word
 What you see is all there is
• System 1 constructs the best possible story
incorporating the ideas that have been
activated but does not (cannot) allow for info
it doesn’t have.

Will Mindik be a good teacher? She is intelligent and

strong…

Next adjectives could be corrupt & cruel

We don’t question or analyse, just produce best story
available
 Coherence seeking system 1 +
lazy system 2
• We are rarely stumped
• Have intuitive feelings & opinions about
everything
• Like or dislike on sight
• Trust or distrust on sight

Lazy System 2 endorses our intuitive beliefs

 “What you see is all you get”
explains many biases

Overconfidence
• Confidence depends on the quality of the
story you can tell from what you see/hear
• System 1 fails to allow for missing or critical
evidence
 “What you see is all you get”
explains many biases
Framing effects:
Odds of survival are 90%
Death within a month of surgery is
10%

Meat: 90% fat free

Meat: 10% fat
 Substitution
Target question Heuristic question
• How much would you • How much emotion do I
contribute to save an feel when I think of
endangered species dying dolphins
• How happy are you • What is my mood right
with your life these days? now?
• How popular will the • How popular is the
president be six months president now?
from now
 Substitution
Target question Heuristic question
• How should financial • How much anger do I
advisors who prey on feel when thinking of
the elderly be punished financial predators

• This woman is running • Does this woman look

for the primary. How far like a political winner?
will she go in politics?
 Emotions and beliefs
• Our likes and dislikes determine our beliefs
ie: our political preferences
and which arguments we find more
compelling:
Red meat; nuclear power; global warming;
motorcycles; irradiated food; tattoos.
If you like these things you think the risks are low
and vice versa.
 System 2 acts as biased lawyer
• Searches for information consistent with
existing beliefs
• Aplogist not critic
• Fights in the court of public opinion to
persuade others of system 1’s view
 The Law of small numbers
• Study of the incidence of kidney cancer in 3141
counties in the USA

The counties in which the incidence of kidney cancer is

lowest are mostly rural, sparsely populated, and
located in traditionally Republican states in the
Midwest, the South and the West.

What do you make of this?

Clean living, no pollution, fresh food without additives
 The law of small numbers
• Study of the incidence of kidney cancer in 3141
counties in the USA

The counties in which the incidence of kidney cancer is

highest are mostly rural, sparsely populated, and
located in traditionally Republican states in the
Midwest, the South and the West.

What do you make of this?

No access to medical care, high fat diet, tobacco, alcohol
 The law of small numbers
• The key factor is not Republican or rural it is
sparsely populated.
• Small samples yield extreme outcomes
• System 1 very bad at stats
• System 1 believes small samples closely
resemble the population from which they are
drawn.
 System 1
• Exaggerates consistency
• Suppresses ambiguity
• Seeks patterns
• Believes in a coherent world
• Believes in causality

Many facts of the world are due to Chance

not causality
 Anchoring

Built to stop at 10 & 65

 Anchoring
• Is the percentage of African nations among
the UN members larger or smaller than the
number you just wrote?

• What is your best guess of the percentage of

African nations in the UN?

10 = 25%
65=45%
 Anchoring
Annual donation “to save 50000 offshore Pacific
Coast seabirds from small offshore oil spills
until ways are found or prevent spills or
require tanker owners to pay for the
operation.”
No anchor ($65)
Would you be willing to donate $5? ($20)
Would you be willing to donate $400? ($143)
 Anchoring
• House market
• Shops
• Political campaigns

Assume any number has an anchoring effect and

mobilise system 2 to combat it.
 Availability
Ask people to estimate the frequency of an
activity:
What percentage of couples divorce after 60?
How many poisonous snakes are there in SA?

We judge frequency by the ease with which

examples come to mind.
When it is difficult to find examples System 2
becomes engaged and content receives
attention.
 Availability
What comes easily to mind?
Stories with big media exposure:
• Hollywood divorces
• Politicians sex scandals
• Plane crashes
• Tsunamis and storms
 Availability
What comes easily to mind?
Personal experiences:
• A bad judicial experience
– Undermines faith in judicial experience
• Being victim of a mugging
– The world seems a dangerous place
• Vivid examples
 Availability
Conditions in which people go with the flow:
• When engaged in an effortful task at the same
time
• when in a good mood after happy memory
• If they score low on a depression scale
• If they are knowledgeable novices in contrast
to true experts
• When they score high on faith in intuition
 Availability
If they are (or are made to feel) powerful

“I don’t spend a lot of time taking polls around

the world to tell me what I think is the right
way to act. I’ve just got to know how I feel”
George W Bush, November 2002.
 Availability, Affect & Risk
Public perceptions of risk:
• Strokes cause almost twice as many deaths as
all accidents combined, but 80% of respondents
judged accidental deaths to be more likely.
• Tornados were seen as more frequent killers
than asthma, although the latter causes 20
times more deaths.
• Death by lightning judged less likely than death
from botulism even though it is 52 times more
frequent.
 Availability, Affect & Risk
• Death by disease is 18 times as likely as
accidental death, but the two were judged
equally likely.
• Death by accident was judged to be more than
300 times more likely than death by diabetes,
but the true ratio is 1:4.

Estimates warped by media coverage which is

biased to novelty and poignancy.
 Availability cascade
• Media reports a relatively minor event.
• Public reacts
• Danger increasingly exaggerated in media
• Public panic
• Scientists who try to dampen fear attract little
attention mostly hostile
• Issue becomes politically important
• Unnecessary expensive legislation passed
 Availability cascade
Terrorists most significant practitioners:

Casualities are small – even in Israel much lower

than traffic deaths.

Cost of the war on terror.

 Linda: Less is more
Linda is thirty-one years old, single, outspoken,
and very bright. She majored in philosophy. As
a student she was deeply concerned with
issues of discrimination and social justice, and
also participated in antinuclear
demonstrations.
 Linda: Less is more
• Linda is a teacher in an elementary school.
• Linda works in a book store & takes yoga.
• Linda is active in the feminist movement.
• Linda is a psychiatric social worker.
• Linda is a bank teller.
• Linda is an insurance salesperson.
• Linda is a bank teller and is active in the feminist
movement.
Rank according to which most likely
 Linda: Less is more
Ran experiment with nothing between bank teller and feminist
bank teller
• Stanford graduate school of business graduates in probability,
decision making & stats
- 85% ranked feminist bank teller higher.

In desperation:
Which alternative is more probable?
Linda is a bank teller.
Linda is a bank teller and active in the feminist movement.
85 – 90% of students in major universities rated feminist higher
 Linda: Less is more
“a little homunculus in my head continues to
jump up and down, shouting at me – ‘but she
can’t just be a bank teller; read the
description.’”
Stephen Jay Gould

The fallacy is attractive even when you recognise

it.
 Linda: Less is more
System 1’s uncritical substitution of plausibility
for probability.

Which is more probable:

Jane is a teacher.
Jane is a teacher and walks to work.

Answer obvious because no competing intuition.

For economists and decision theorists:
(not Austrian school)
rationality = internal consistency
logical
coherence

This definition demands rules of logic the

human mind cannot implement.
Behavioural economists:
believe in freedom – but that it has a cost:

Individuals who make bad choices and society

which feels obliged to help them
 Libertarian Paternalism
How do you help people make good decisions
without curtailing their freedom?

Nudge them to make decisions in their long

term interests.
 Rates of Organ Donation
Nearly 100% Austria
12% German
86% Sweden
4% Denmark

Why the difference?

Opt in or opt out
Why the huge difference?
• Default option perceived as normal choice
• Deviating is an act of commission, requires
deliberation, responsibility
Businesses take advantage of system 2 laziness
Hence contracts long and in small print

Nudge
• Pension scheme default option
• Contracts in large print and simple language
 In Conclusion
• We think we are System 2
• System 2 articulates judgments and makes
choices but also endorses or rationalises ideas
and feelings from System 1
• System 2 is important but limited by its
abilities and the knowledge to which it has
access.
• System 1 is the origin of much we do wrong
but also most of what we do right.