Daniel Kahneman

Overview

Daniel Kahneman worked for decades with Amos Tversky on how people actually judge probability and make choices, against the assumption in economics that they behave like rational calculators. Their heuristics-and-biases programme identified specific shortcuts, such as judging frequency by how easily examples come to mind, and showed that the resulting errors are patterned rather than random. Prospect theory, published with Tversky in 1979, described how people actually weigh gains and losses, including that a loss hurts more than an equivalent gain pleases, and became the foundation of behavioural economics. Kahneman received the 2002 Sveriges Riksbank Prize in Economic Sciences for this work; Tversky had died in 1996 and the prize is not awarded posthumously. His 2011 book Thinking, Fast and Slow made the research widely known, and he later publicly acknowledged that the chapter drawing on social priming research did not survive the replication crisis, which is worth noting when reading it.

Where to start reading

• Judgment under Uncertainty: Heuristics and Biases 1974

  The paper with Amos Tversky that named the three main shortcuts, representativeness, availability, and anchoring, and showed their characteristic errors.

• Prospect Theory: An Analysis of Decision under Risk 1979

  The account of choice under risk, with losses weighted more heavily than equivalent gains; the founding paper of behavioural economics.

• Thinking, Fast and Slow 2011

  The general-audience summary of a career, organised around fast automatic judgement and slow deliberate reasoning; read the priming material with the replication failures in mind.

Part of

• Cognitive psychology

Sources

1. Daniel Kahneman Wikipedia
2. Daniel Kahneman - Facts The Nobel Prize
3. Prospect theory Wikipedia