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Chapter 34 highlights a number of critical ideas that are germane in today’s environment. Kahneman begins the chapter with the statement that classic economists’ beliefs and preferences are reality bound. Meaning that “objects of the choices are states of the world, which are not affected by the words chosen to describe them.” Stated differently, classic economic theory sees decisions as a set of equations and does not account for the emotion (System 1 thinking) that words generate in decision making. Kahneman uses the results of the 2006 World Cup.  In the finals, France lost and Italy won. Both statements describe the same event. They are equivalent, but if you were rooting for France, saying France lost will evoke different emotions and memories than saying Italy won. System 1 thinking generates different meanings based on human emotions and bias. In 2020 manipulating people by evoking System 1 thinking is called spin. 

The punchline of this chapter is while a choice might be economically equivalent, the words used to explain the choice can make them not equivalent. As every salesperson knows, emotions sell. In the movie Megamind, Megamind (voiced by Will Ferrell) stated that the difference between a villain and supervillain is PRESENTATION.  Kahneman uses the term ‘framing’ to describe presentation in decision-making scenarios. In the article, The Fear Equation, (AARP The Magazine, p28) Doug Shadel quotes Roy Baumeister (author of The Power of Bad)“ the mind is hardwired to react more strongly to negative than positive things.” Framing can be used as a tool to guide decisions. 

Kahneman’s advice is never to passively accept decision problems as they are framed.  Step back, invoke System 2 thinking (remove the emotions and do the math) and discover which of your decisions or preferences is generated by the framing rather than reality.

We will hold the poll for the next book in the Re-read Series open Saturday 11 January 2020. Remember to vote early and often.

Remember, if you do not have a favorite, dog-eared copy of Thinking, Fast and Slow, please buy a copy.  Using the links in this blog entry helps support the blog and its alter-ego, The Software Process and Measurement Cast. Buy a copy on Amazon,  It’s time to get reading!

The previous  installment of Re-read Saturday is:

Week 33: Reversals 

Or start at the beginning

Week 1: Logistics and Introduction