BOOK REVIEW

THINKING FAST AND SLOW

Presented By:

Ramanjeet Singh
MBA 4th Sem

ABOUT THE AUTHOR

Daniel Kahneman is a nobel prize

winner.
He is Ph.D from university of
California
He is professor emeritus of psychology
and public affairs at Princeton
University.
He is known for cognitive biases,
behavioral economics and prospect
theory.
Thinking Fast and Slow Review by: Ramanjeet Singh

TWO SYSTEMS

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Thinking Fast and Slow Review by: Ramanjeet Singh

JUMPING TO CONCLUSION
FALLACY

Drawing a conclusion
without taking the needed
time and evaluating all
the
facts
to
reason
through the argument.

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Thinking Fast and Slow Review by: Ramanjeet Singh

ASSOCIATIVE COHERENCE
Association between events, circumstances and
regular occurrences.
The more these events fits into our stories the
more normal they seem.
Example:

After spending a day exploring beautiful sights in the

crowded streets of New York, Jane discovered that her
wallet was missing.

Thinking Fast and Slow Review by: Ramanjeet Singh

SUNK COST FALLACY

The tendency of people to irrationally follow
through on an activity that is not meeting their
expectations because of time or money they have
already spent on it.
Example:

X has already been invested in

project Y.
Z more investment would be
needed to complete project Y
otherwise X will be lost.
Therefore, Z is justified.

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Thinking Fast and Slow Review by: Ramanjeet Singh

OVERLOOKING STATISTICS

The tendency of people to misjudge the likelihood

of event because of too little weightage given to
statistical
information
and
giving
more
weightage to other information.
Example:

Only 6% of applicants make it into this school, but my

son is brilliant! They are certainly going to accept him!

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Thinking Fast and Slow Review by: Ramanjeet Singh

EXPERT INTUITION

Intuition means knowing something without

knowing how we know it.
Intuition is immediate pattern recognition, not
magic.
When can you trust it?

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Thinking Fast and Slow Review by: Ramanjeet Singh

THINKING NARROWLY
Most of us are so risk averse that we say no to all
gambles.
Sometime we lose money because of risk aversion
behavior.

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Thinking Fast and Slow Review by: Ramanjeet Singh

TWO SELVES

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Thinking Fast and Slow Review by: Ramanjeet Singh

ECONS AND HUMANS

Economists operate on the
assumption that consumers are
rational and always will do the
rational thinking.
Heuristics influence our choices
which are mostly irrational.
We need help to make rational
choices.

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Thinking Fast and Slow Review by: Ramanjeet Singh

STRENGTH

The writing style of the author in this book is

very reader friendly.
The book explains many aspects of human
psychology.
The book explains almost all the aspects of
behavioral finance. It tells us how behavior of the
human affects the financial decision making.
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Thinking Fast and Slow Review by: Ramanjeet Singh

Humans rarely meet the

standards of rationality,
even when they think that
they are reasonable.

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Thinking Fast and Slow Review by: Ramanjeet Singh