The very same biological machinery that enables us to reason also biases our judgments and slants us toward irrational behavior, leading to predictable human errors that may be impossible to correct. These are the insights of psychologists Daniel Kahneman and Amos Tversky, who collaborated over a quarter century and influenced the theory and practice of economics, finance and political science as well as public policy. Their research earned Kahneman a Nobel Prize in Economics in 2002. Tversky would have shared the Prize had it not been for his untimely death in 1996. The story of Kahneman and Tversky’s friendship is recounted with affection and interwoven with the details of their scientific inquiries in Thinking, Fast and Slow, which is a scholarly work masquerading as a popular book. It has been on mainstream best-seller lists for months.
May 24, 2012
2012 Working Papers