Book Box | Goodbye Daniel Kahneman, Israeli-American Nobel Laureate, whose life reads like a thriller
If you’d like to read about a brilliant economist who passed away recently and if you want to influence people, read these two books.
Dear Reader,
I can’t remember how I discovered Kahneman. This Israeli-American psychologist who won the Nobel Prize in Economics definitely didn’t figure in my high school economics textbooks. Or in any of my economics courses during my MBA at IIM Calcutta. Economics was mostly about mathematics, we were told, and the more mathematics, the purer the discipline.
My first inkling that economics must include psychology came some years after I began working. I was in Boston, visiting my younger brother who was studying management at MIT Sloan. He was all fired up about his Israeli-American professor, Dan Ariely and he handed me Predictably Irrational, a book written by this professor. And that’s how I got hooked.
From Predictably Irrational, I made my way backwards to Nudge by Cass Sunstein and Richard Thaler, and then finally, at long last, stumbled upon the book behind all these books – Thinking, Fast and Slow. By then, I was gobbling up everything with a behavioural economics tag – everything from Influence by Robert Cialdini to Misbehaving by Richard Thaler.
As a literature student, behavioural economics was especially close to my heart.
For years, I‘d bristled when people judged me for studying English literature. It was whimsical and a waste of time, they said. There were no numbers, no exactitude, no science, how then could the study of human characters in literature help me in any career, how could it help me understand the world I was in? I’d stammer and splutter about learning empathy and psychology and motivation and discover that nobody was listening.
Then along came Kahneman – who went deep into psychology to uncover human biases in decision-making. Studying psychology and human behaviour was vitally important for everything in life, from army enrollments to health and financial investments, he demonstrated. He not only held his own against the number-obsessed economists but was also awarded the ultimate recognition in the form of the Nobel Prize for Economics in 2002.
Today, there are many brilliant books on behavioural economics, and each of them has something to add to the conversation. My personal favourite is Influence by Cialdini, my go-to bible for life, and also for when I teach my course on persuasive communication.
But if I had to pick my top two, they would both be Daniel Kahneman-inspired books.
My first book is a fantastic biography of Kahneman and his partner Amos Tversky written by Michael Lewis. It is called The Undoing Project. And the second book is written by Kahneman himself, explaining his research - it’s called Thinking, Fast and Slow.
When I read The Undoing Project, I found myself immediately drawn back to re-read Thinking, Fast and Slow. And reading these two books together became such a magically immersive experience, it clarified every inchoate understanding of behavioural economics I had.
Charlie Munger famously said: “When you’re trying to teach the great concepts that work, it helps to tie them into the lives and personalities of the people who developed them. I think you will learn economics better if you make Adam Smith your friend”. Reading The Undoing Project helped me learn behavioural economics, and made both Kahneman and Tversky my friends.
So here’s my recommendation for this weekend - If you are someone who wants to make better decisions, if you want to understand human behaviour and influence people, read these two books.
Begin with The Undoing Project. You could skip Chapter 1 which is about picking basketball players and go straight to Chapter 2 where you see the young Kahneman, a Jewish kid trapped in German-occupied France and witness his remarkable encounter with a Nazi soldier. Follow Kahneman’s emigration to Israel, his enlistment in the Israeli army, his devising of personality questionnaires, and his investigation into cognitive biases like confirmation bias when people tend to seek out information that confirms their existing beliefs and ignore information that contradicts it. Or framing effect, which is what happens when the way information is presented influences your decisions. He also built on research in psychology and perception that includes the invisible gorilla and the marshmallow test.
Alongside this racy and incredible story, read Kahneman’s own research, beautifully explained in Thinking, Fast and Slow. His later book, Noise is good as well, but nothing can match the sheer genius of Thinking, Fast and Slow.
What about you, dear reader? What are your favourite books on behavioural economics and on economics in general? Do write in, and until next week, happy reading.
Sonya Dutta Choudhury is a Mumbai-based journalist and the founder of Sonya’s Book Box, a bespoke book service. Each week, she brings you specially curated books to give you an immersive understanding of people and places. If you have any reading recommendations or suggestions, write to her at sonyasbookbox@gmail.com
Books recommended in this edition of Book Box
Predictably Irrational by Dan Ariely
Thinking, Fast and Slow by Daniel Kahneman
Nudge by Cass Sunstein and Richard Thaler
Influence by Robert Cialdini
Misbehaving by Richard Thaler.
The Undoing Project by Michael Lewis
Noise by Daniel Kahneman, Cass Sunstein and Olivier Sibony
