Daniel Kahneman's legacy and impact on behavioural science

Daniel Kahneman’s passing at 90 years-old has left a major gap in the field of behavioural science and in the wider intellectual community.

His scientific contributions, many made with his collaborator Amos Tversky, a master of cognitive psychology himself, transformed the disciplines of psychology and economics. They also had outsize effects on philosophy, political science, economic theory and many other disciplines as well as being the founding fathers of behavioural economics.

I first met Danny in 1984, when I was a student. I moved to Vancouver, Canada, to study in his lab at University of British Columbia, which he shared with psychologist Ann Triesman. Although Danny was not yet as famous as he was to become, his genius was widely recognised.

Three then or future Nobel prize winners visited the class. A young Richard Thaler spent a year with us and Thomas Schelling and Francis Crick came by. Despite this, Danny had time for everyone. I sometimes find myself giving the advice Danny gave me to my students and colleagues even today.

In 2002, Danny was awarded the Nobel memorial prize in economic sciences. He then became perhaps the most influential and distinguished writer for the public in the behavioural sciences (rivalled by his close friend and collaborator Professor Thaler). Danny’s 2011 book Thinking, Fast and Slow is a classic of popular science writing.

In it he popularised and developed the idea of two systems of thought. One of the two systems is fast, efficient, confident and prone to error (system one), while the other is slow, resource consuming, full of doubt and perhaps a little less prone to error (system two).

These systems work together. System one tells us the dessert is likely to be delicious and worth considering, while system two (might) step in to check the calorie count before we dig in.

In the academic world it would be hard to pinpoint Danny’s most important contributions, but prospect theory, set out in his 1979 paper with Tversky, is by far the most cited. The paper challenged the mainstream economic view and research into economic science that people were fundamentally 'rational' even if prone to error.

Many scientists realised this could not be quite right. But Danny and Tversky showed that incorporating insights from psychological research into economics could explain many puzzling observations about human nature.

Nudging human behaviour

The prospect theory paper also provided more than a dozen experimental demonstrations for their claims. Teachers (like myself) still use these demonstrations in the classroom, so reliable are the results they reported.

A simple example: given a choice between £100 for sure and a 50/50 chance of gaining £200, most people will take the £100. But given a choice between losing £100 for sure and a 50/50 chance of losing £200, people will take the 50/50 chance. People are risk averse when it comes to gains, but risk seeking about losses.

Prospect theory continues to generate new research, and is foundational to the science of 'nudging'. Nudge theory is the notion that our behaviour can be successfully influenced through “soft” interventions. One of its central principles is loss aversion, which means people are more sensitive to losses than gains of equivalent magnitude.

If you want people to bring their own mug to a coffee shop, charging them for a paper cup (a loss) is more effective than giving them a discount for bringing their own cup (a gain). The idea that behaviour can be influenced by such biases is now part of the bread and butter of behavioural science.

Other prospect theory findings included the tendency for people to be 'anchored' when they make quantitative judgements. For instance, if you put an offer on a house, the seller’s valuation will probably shift in the direction of your offer. Danny also described the planning fallacy, the tendency for projects to cost more and deliver less and take longer than expected.

Another fascinating line of work of Danny’s examined how a person’s feelings and judgements about events depended on their imagined alternatives to those events. One way imagination works is by 'undoing' events. The easier they are to undo, the greater the effect they have on us. This rule was central to norm theory, his 1986 paper with Dale Miller.

One example of how undoing works: if a car crashes into the wall one metre from where we are standing, we believe we just missed being killed, and are relieved. But if tomorrow a car hits the exact spot where we are standing today, we probably give it less thought. Our imagination automatically creates a scenario in which we are standing one metre to the left now, but not one in which we are standing at the same place tomorrow.

The social science of wellbeing

Danny also pioneered the analysis of wellbeing. Our reflections about an experience are more likely to be influenced by our interpretation of them than the positive or negative feelings we have during an experience.

The peak-end rule, for instance, is that the extent to which we like a past experience depends on the best or worst part of that experience, and how it ended. Danny showed that men receiving colonoscopies would report a better experience if the painful intrusion was a longer period of moderate pain, rather than one that ended earlier but with greater pain.

One way Danny stood apart from other researchers is that his work was driven by a desire not merely to contribute to a research field, but to create new fields. And then, if possible, to answer all the questions they pose. That is why his research, even published many decades ago, continues to act as the basis for new ideas and debates.

I last met Danny less than a year ago. I visited his home in New York for dinner. At one point during the evening Danny said that people were coming to see him to say goodbye.

His eyes were smiling and he held his hand up when he said it – a smile and gesture I have seen him use many times, a mixture of “I am not offended”, “you should not be offended by my bluntness” and “let me explain”.

I did not want to face what he was saying but I understood. He was clear-eyed about the prospect of death. He was not afraid of death, he was not afraid of anything.

Read the original at The Conversation.

Further reading:

What are the advantages and disadvantages of nudging?

Three ways nudging can improve health outcomes

How to become more patient - add a zero

Listen to our podcast series on Behavioural Science

Daniel Read is Professor of Behavioural Science and teaches Behavioural Sciences for the Manager on the Global Online MBA and Executive MBA. He also lectures on Behavioural Economics on the Undergraduate programme.

Learn more about behavioural science on the four-day Executive Education course Behavioural Science in the Real World at WBS London at The Shard.

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