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Thinking, Fast and Slow 2011 a book by Daniel Kahneman

Submitted in partial fulfillment of the requirements
For Master of Business Administration Degree
Judgment in Managerial Decision Thinking

The secrets of the human brain: the two mechanisms that control our lives
Thinking, Fast and Slow is a 2011 book by Nobel Memorial Prize winner in Economics Daniel Kahneman which summarizes research that he conducted over decades, often in collaboration with Amos Tversky. It covers all three phases of his career: his early days working on cognitive bias, his work on prospect theory, and his later work on happiness.

The book's central thesis is a dichotomy between two modes of thought: System 1 is fast, instinctive and …show more content…

For system 1 is active all the time (unlike the two, which requires a conscious effort), are more prone to cognitive errors. An example of system autonomy 1:01 Müller-lyer is optical illusion in which two parallel lines seem to have different lengths. Even if we measure the two lines and convince ourselves (with the help of the two) that their length is the same, system 1 will continue to perceive as unequal.
Like optical illusions, cognitive illusions tend to be difficult to overcome, but the first step out from under the domination of these mistakes is thinking their awareness. When people are in a time of crisis, uncertain situations, decisions are taken by the system 1. Therefore, it is essential to know its weaknesses.

Cognitive mistakes that influence our decisions
It is vital to understand that there are people who are not affected by the weakness of the system 1. This is demonstrated by a simple test that Kahneman applied it a thousand times: "A baseball bat and a ball together cost $ 1.10. The bat costs a dollar more than the ball. How much is it? ". Even for the most intelligent students, such as those at Harvard and Princeton, more than half gave the obvious answer offered by one system, but also wrong 10 cents. The correct answer was, of course, 5 cents.
One of the most common cognitive errors is "the overconfidence bias" - the tendency to excessive trust in their own abilities. Statistics show that the chances of a new company founded in the

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