In this episode, Tim Villegas and I dig into Daniel Kahneman’s book “Thinking, Fast and Slow“.
You can listen to the episode here:
For more on Tim, you can find his website here, or find him on LinkedIn, X, or Threads.
Full Transcript:
Mickey: System one is fast, intuitive, and emotional.
System two is slower, more deliberate, and more logical. The impact of overconfidence on corporate strategies, difficulties, predicting what will make us happy in the future, the profound effect of cognitive biases on everything from playing the stock market to planning our next vacation, each of these can be understood only by knowing how the two systems shape our judgments and decisions.
So that was a brief summary of Daniel Kahneman’s book, Thinking Fast and Slow, and to join me to discuss it today is Tim Villegas. So, Tim, welcome. Tell the folks a bit about yourself.
Tim: Hey Mickey, I am a director of communications for the non profit, uh, Maryland, the Maryland Coalition for Inclusive Education.
I’m a former educator in Georgia and, um, you and I have go way back.
Mickey: We do, yeah. Back to when our kids were in elementary school and now mine are in college. So yeah, it’s been,
Tim: a minute. It’s been a minute.
Mickey: So, so you chose this book. Why’d you pick this one?
Tim: Honestly, maybe like 200
Mickey: choose from and you went with this so
Tim: honestly, it was like, uh, I’ve been wanting to [00:01:00] read this book, so it seemed good. Like a, a good way to actually read
Mickey: it. All right. Yeah,
Tim: that works. , I’ve,
Mickey: had a number of these shows have been that where people want to read a book, so I give ’em some time. They read it and we talk about it. And that’s, yeah.
Tim: Well, so what’s interesting about this book is I thought I knew what it was about and then I was like, oh, it’s actually about. Something else.
Mickey: Okay, tell me more about
Tim: It wasn’t really, no, so it wasn’t like too off. Like I knew it was about, um, I thought it was more about neurology and like, okay, like neuroscience, uh, but it’s really psychology and it’s, you know, really about kind of conceptualizing these two ideas.
Mickey: Yeah, I think it’s kind of the combination of them, yeah, how your psychology affects your neurology.
Tim: Yeah, exactly. Um, which I was actually. Even more pleased because I was like, oh, this is actually right up my alley. Um, um, my degree is in psychology.
realize that.
Yeah, yeah, and um, I often, you know, we can talk about this as we go through, but [00:02:00] I thought the book was really applicable to my work in communications because a lot of it’s about messaging and framing and thinking about misconceptions and, and so I thought it was really applicable.
Mickey: Okay, nice. Yeah, I guess it, it probably is a good place to start and talk about the System 1 versus System 2 again just to make people, make sure people are aware of that. So, really they consider System 1 to be your impulsive and automatic and intuitive things that you just do without thinking. You know, if you burn your hand on a stove, you just yank it back without thinking.
And System 2 is more thoughtful, deliberate, and calculating. And the more we can use System 2, I think generally the better, but we’re built to do a lot of System 1, which can get us into trouble.
Tim: Right, System 1 is more Just relying on your intuition. Um, and what I thought was really interesting was that system one kind of takes over when we have.
A lot of cognitive load and, or maybe we’re, um, already, you know, anxious or heightened by, you know, whatever the situation is. And [00:03:00] so we rely on our intuition, but that is often maybe not what we should be relying on.
Mickey: Okay. Yeah, I could see that he gives in a lot of different specific cases for that. We’ll get into some of that in a minute. Um, I guess I’ll kinda dig into some of those. One I thought I really liked from him was priming where we think of certain things after hearing other things.
So like if I said shower and then ask you to fill an so blank P, you would go with soap. But if I said eat and then fill in so blank p be likely to say soup ’cause you just kind of prime for that. And then, yeah, a lot of psychology psychological tricks in here that I don’t know real well that you may have already been more familiar with, they were eye-opening to me.
Tim: Well, you know, that’s actually one part of the book I didn’t like. Okay, alright. And, uh, I think I, I want to be, I want to be like honest about it though, because part of it was like, I don’t like being told by the narrator what I’m thinking.
Mickey: Even when he’s right?
Tim: Even when he’s right. Yeah. So it like rubs me the wrong way, but I totally get like, I mean, this guy is obviously very smart and he, he wrote this [00:04:00] book and um, He, uh, he’s basically a researcher with this, his buddy Amos, right? I think, yeah. And so it was like, uh, the, the book is like a very much a culmination of all these stories of them doing these research experiments or like retelling research experiments.
So he would, uh, explain this experiment, like what you were saying about, um, , There’s these letters of a word and you will predict, you will do this. And again, you’re like, often that is exactly what happened. Uh, but other times I’m like, I just, like, I don’t get it. So he would say most of the time you will react a certain way.
And maybe I didn’t react that way. So I was like, that’s an interesting choice. How he, how he wrote this.
Mickey: Yeah. Well I think even when you don’t react that way, most people would, most of the time is kind of the goal.
I don’t think everyone’s gonna say soup when I say eat some just outta the shower thinking soap. Or they may just. Yeah, for other reasons say so but most people most of the time
Tim: Right, right.
Mickey: a lot of this [00:05:00] stuff like other ones he gets into are anchoring which That’s a tricky one to me because it, we use it a lot when we’re giving prices to clients, you know, for websites, but I don’t want it to be shady and manipulative either.
So there’s a fine line between all that stuff, but anchoring matters quite a lot. I’ve seen experience where they show people the same object and say, do you think this is more or less than a thousand dollars? They say, Oh, it’s less, it’s like 800. And they say, do you think this is more or less than a hundred dollars?
Like, Oh, it’s more than a hundred. It’s like one 50,
Tim: So they’re way off based
Mickey: on wherever anchor they were given. And so that, that can be interesting thing to see that first number and then base everything off that and make things seem.
Tim: because the anchor that was arbitrarily Right, right. Well, it really shows how, how manipulated, uh, how manipulated we can be by a lot of different factors.
Yeah, for sure. Numbers, um, different messaging, even tone. Yep. So many
Mickey: things that come in there. Yeah. Um, the next one I saw here was loss aversion. This one’s interesting. I emailed Adam Grant.
I don’t know him personally, but he wrote back, which was pretty cool because I knew he’s a Michigan fan in the Michigan Ohio State game. You know, [00:06:00] a couple weeks ago, I said as a Michigan fan, I was happy to win, but I was way more happy not to lose, given all things, given the situation with the Scandals and all that stuff.
I
Tim: Right.
Mickey: I was 10 times more happy. We didn’t lose in the ramifications of that than I was that we won. And he said, yep, same thing. That’s loss aversion. One on one is you’re often more scared of giving things up than the gain you might get otherwise.
Tim: Right, right. Um, that’s it, I’m so, I’m so pleased that he wrote back.
Mickey: was, I was taking, I was, he wrote back like five words, but hey, just the fact he wrote back was fantastic,
Tim: I wonder how many emails he gets a day.
Mickey: can’t fathom it, yes. It’s, it’s
Tim: It’s crazy. So.
Mickey: I did expect to hear back, but he’s such a Michigan fan, I figured if I primed it with some Ohio
Tim: there you go. There you go.
Exactly. Yeah. He’s scrolling through the emails and going, aha. The other
Mickey: that comes up a lot for us too is sunk costs. You know, Allie and I were just talking about that today. In fact, with sunk costs, where a new idea we have for the company that we think we may not do now, we have all this work already into it, but that work is just kind of, as Seth Godin says, it’s a gift from our past self to our present self that we can take it or we can reject it, but it.[00:07:00]
What’s the best decision from now going forward and not counting all that stuff in? It’s so hard to do. It’s so hard to do, but I see that a lot. The example I love to give there is like with the Braves. If you have tickets to a Braves game that were 200 and you bought them yourself, but it’s rainy and you’re kind of sick, like, but I spent the 200, I have to go.
Versus, no, the 200 is gone. Do you want to go be more miserable or not? It’s, it’s tough not to.
Tim: Yes, absolutely. Um, I feel like there was something at the end of the book, , or you know what? Maybe it’s maybe I’m not, maybe I’m not thinking of, uh, Daniel Kahneman. Maybe I’m thinking of a Seth Godin.
Maybe I’m thinking of the dip.
Mickey: Okay, it could be.
Tim: think I’m thinking of the dip. Yeah. Nevermind.
Mickey: Yeah,
Tim: That’s all right.
Mickey: go together. The dips not a bad place to be. So, um, let’s see. Another one is yet base rate neglect. This is one I wasn’t as familiar with. That’s the idea of, um, if there’s a taxi company with 20 20 percent yellow cabs and 80 percent red.
If you see five red cabs go by in a row, you think, well, we’re due for yellow now, but the odds of the next yellow is still 20%. Kind of like if I flip a coin, it’s heads five times in a [00:08:00] row. What are the odds? It’s heads the next time. 50 50. It’s just so hard to always go back to the baseline when things seem to be trending in a certain way, and yeah, that could be a tricky piece to, just to justify with yourself, you know, some of these psychological things.
Tim: Right. I really liked It was about the, basically, the regression to the mean.
Mickey: Yeah, there you go,
Tim: You know, so like, you know, and there’s Like when you’re in, when you’re like gambling or whatever, when you’re doing dice, when you’re like, you know, throwing dice, um, you’re like, oh, this one’s do, you know, but it’s not like, even if it does like hit a seven or even if it does hit like one that you’re, that’s a little bit more rare and you’re thinking, well, it’s do, um, there’s like no.
Like the dice is just the dice. Right. You know, it is
Mickey: tricky thing though, because you say, If I throw this dice ten times in a row, my odds of getting a seven are really high. But in each roll, they’re the same odds as they should have been. And it’s hard to put those two together. But, you’re right. Yeah.[00:09:00]
Tim: It’s right.
Mickey: You get that feeling for sure.
Like, I haven’t hit seven in a while. It’s due. It’s time. And, there’s still a good chance it will, but just a good chance it won’t either. So,
Tim: Right. We, we talk about that a lot in sports too, you know? Mm-Hmm. because you have, you know, a, a home run hitter. And he hasn’t hit a home run in 30 plate appearances, and you’re like, well, he’s due, you know, but there is more skill involved with that.
You know, I think you have a greater probability that that might happen if you have. Someone who’s a proven home run hitter. Right, right.
Mickey: Well, I think there’s a greater chance then of him either striking out or hitting a homer. ’cause he’s gonna be swinging hard to try to get that, ’cause he knows he is due.
So his odds of a home run go up. But his odds of a strikeout go up as
Tim: well. Right, right.
Mickey: I saw that with the, growing up with the tigers. We had people like Rob Deere and stuff that it was strike out or home run every time he came up. So and I’m, I’m guessing good hitters get that, is if they’ve been dry for a while, they get more anxious and swing harder and maybe we’ll connect and get one or.
Maybe strike out five more times,
Tim: Right, right. Well, yeah, sport. I mean, I think sports psychology, you know, that’s, that’s a whole part of it, too, is the [00:10:00] mental aspect
Yeah, I’ve
Mickey: read a lot of Charlie Munger lately. I’ve read a lot of his stuff generally, but he as of this recording He just passed away a couple weeks ago and the new version of poor Charlie’s almanac just came out in Kindle, which is fantastic So it’s worth reading But so a comment in here from the book or quote from the book that remind me of Charlie’s they say in the book a Reliable way to make people believe in falsehoods is frequent repetition because familiarity is not easily distinguished from truth Authoritarian institutions and marketers have always known this fact.
It’s something Charlie talks about a lot, but he says it from the good side. He said, you know, his whole thing, he’s one of the smartest people that have ever lived, probably, and well read, but he only has a few core things he says, and he says them over and over and over, because repetition buries itself in people, and so he’s doing it a good way, but again, you can use that for evil as well, as the psychology from the book shows.
Tim: Well, that’s why, that’s why people do campaigns, right? Right. Yep. Yeah.
Mickey: And I’m bad about that one, too, because I think, you know, I have a blog, I write it every day. No one’s reading every post I write, but I still feel bad. Like, I talked about that thing two months ago. I don’t need to talk about it again, but I totally do.
I need to get better about
Tim: always [00:11:00] think about that. I always think about that, especially, you know, uh, the whole, Mickey’s a rock star at blogging. Um, and I think I still am. Very much a social media person as far as posting and
Mickey: way better on social than I do for
Tim: it’s the same sort of thing it’s like oh, you know, I already posted about you know inclusion or podcasting this week
Mickey: Right.
Tim: But it’s like when you reap when you do it again, not everyone is liking
Mickey: it. Right, it’s a largely different group of people,
Tim: it and stuff.
It’s still kind of a magical,
Mickey: Right. And in your case, and really what I should be doing, you are the inclusion and podcast guy to a lot of us, and so you should be talking about that stuff a lot.
My problem is I’m trying to stay so wide, it’s, it’s troublesome, I think, where I need to get, find a few key topics and really be hitting those harder. I, I do that to a degree, but it’s still, I just posted about that recently, six weeks ago. Like, no one remembers my post from
Tim: six weeks ago. Most of the people
Mickey: reading on the one today didn’t even read that one, so it’s okay.
[00:12:00] But it’s still something inside me that doesn’t like that.
Tim: know. Yeah.
was another,
Mickey: um, about laziness. I like this quote from the book. He said a general law of least effort applies to cognitive as well as physical exertion. The law asserts that if there are several ways of achieving the same goal, people will eventually gravitate to the least demanding course of action in the economy of action, effort is a cost and acquisition of skill is driven by the balance of benefits and costs.
Laziness is built deep into our nature. So if people are going to always, yeah, trend toward the easier solution, even if there’s a better solution, that’s. It’s not a whole lot harder, but it’s harder nonetheless and that’s a tricky thing to do. That’s more just personal habits, I think, there than, you know, the psychology of sales or anything.
But it’s, even to that, there’s, I think there’s a place for it. If we say, hey, we’re going to build you this new website, here’s the 57 things we need from you to get started. They may be 57 great things, but it’s 57 things. Give me the two things. Like, let’s just
Tim: yeah, well, we, we’d see this a lot in, in our work when we’re working with school districts. Um, and I didn’t really say what we do with at, at [00:13:00] the Maryland coalition for inclusive education, but basically we partner with school districts on, on changing behavior and changing practices.
So a lot of times things. that school districts do to support learners are very ingrained. Uh, and there’s really no other reason other than we’ve always done it a certain way. And so to change, uh, the way that you educate, uh, kids and learners, uh, is difficult. And so most people don’t want to do that.
Because the other way that we’ve been doing it, it may not be better, but it’s easier.
Yeah,
Mickey: that’s a great example. Um, another one I picked up that we see this a lot with, I think a lot of, with celebrities and politicians, but he says the psychologist Paul Rosen, an expert on disgust, observed that a single cockroach will completely wreck the appeal of a bowl of cherries.
But a cherry will do nothing at all for a bowl of cockroaches, . And I, I see that in terms of like, yeah, you see people that do good their whole life and they make this one. Bad mistake and it just ruins them like they’re done. They have a life full of [00:14:00] cherries. They have that one cockroach. It just kills the whole bowl of everything they’ve done.
And likewise with someone that’s just a jerk all the way around. The one nice thing they do gets. Destroyed by the cockroaches instantly, but it’s almost unfortunate that it’s that hard, but it is, especially for people in the limelight, which I’m thankful I’m not.
Tim: For sure. For sure.
Mickey: there’s a lot of, a lot of advantages I guess to being rich and famous, but the famous, I think most everyone wishes they weren’t because you can’t just live your life and, cause every little thing is picked at, you
Tim: know? Yeah, exactly. I
Mickey: like if I were to run for office I’d I’d do pretty well in that regard. I don’t think I have any skeletons, but people would look at every little thing they could possibly get me for. And yeah, that, that’d have to be so frustrating. It’s such a hard shell to
Tim: yeah, I don’t know.
I don’t know. Uh, yeah, exactly. I don’t know if I could survive running for office.
that would be, I have no plans
to, so yeah,
Mickey: I don’t have, I don’t think I have the skills either. So I’ll just find the good people to leave us instead.
Tim: Um,
Mickey: this other one. So Annie Duke’s another person I’ve been reading a lot of lately. I love all her stuff. And this quote reminded me of that, where he said, we are prone to overestimate how much we understand about the world [00:15:00] and us to underestimate the role of chance in events, you know, that so many things, you know.
Any Duke’s big thing that I love that took me a long time to grasp is her separating decisions and outcomes. Like you can make a good decision. It goes poorly. It was still a good decision. And it’s so hard to do that. Cause if you make a decision, it goes badly. Well, well, that was a bad decision when it may not have been, you know, her big thing is the Seahawks in the super bowl some years ago that right at the end of the game, they.
They passed the ball in the end zone and it got picked off when everyone said they should have run Marshawn Lynch. How dumb were they? It was the worst decision ever. And if you look back at it objectively, it was a good decision. That play doesn’t get intercepted. It gives them more time on the clock to run.
Like, there’s a lot of reasons it was a great decision, but it went poorly. So everyone says Pete Carroll made the worst decision ever. It’s hard to say. It was a good decision. It just went poorly at the worst possible time in the world. And it’s, it’s something I try to see for us, too. Like, if I make a, something, a good decision, it goes poorly.
I’m like, oh, that was still the right move to make.
Tim: Right. Something
Mickey: Annie says with gambling, and she’s a big poker player, is like, if you get two aces in your hand in a round, and you end up losing the hand, you can’t go back and say, well, if I get two aces again, I’m just going to fold, because clearly that was a bad decision to stay in the hand, but no, [00:16:00] it was a great decision to stay in, it just didn’t work out well.
So if you take the wrong lessons out of things, you’re like, well, two aces in the hand is a bad hand, so I’m folding on that. That’s stupid. It just happened
Tim: Yeah.
Do you, do you play poker?
Mickey: a little bit every couple years? I don’t, yeah. Yeah. I struggle every time. I do have to refresh myself on the different types of hands and which ones are better and
Tim: yeah,
Mickey: not very good, so.
Tim: yeah. Yeah. Um, yeah, uh, whenever you have two ACEs, obviously you stay in, but,
Mickey: but last time I did, I lost, so it
Tim: It’s not, it’s not
along with that, um. And I don’t remember if it’s the same, if it was in the same area, but like overestimating the likelihood of rare events.
Mickey: Okay, yes, yeah.
Tim: that really stuck out to me.
Um, and also connecting it to like, we talk about mass shootings a lot, right? And we talk about terrorist attacks. We talk about natural disasters. Those things actually are pretty rare. Um, like in the only effect, um, Uh, just, [00:17:00] you know, compared to the, the vast majority of people who live in the, in the U. S.
or in the world, it only affects a very, very, very small percentage of people. Possibly
Right. So, uh, but it is always on everyone’s mind because of media coverage. Right. Right. So you have all of this recency bias and then you also have this rare event, um, and then, uh, we end up worrying about something that. probably have never happened to us.
Mickey: Yeah, I think mass shootings. They have people in the U. S. Killed by guns. It’s from a mass shooting, like for point 0. 1 percent of events or deaths are from mass shootings. All the rest are from one off shootings everywhere. But we’re all scared of like, don’t go to the mall, which it’s a tough thing. It’s also tough.
I was worried about that tiny percent happening in me. I shouldn’t have gone. Yeah, but again, the math is still on my side. I read somewhere else. They said after 9 11, um, they asked me 1600 people were killed the next year in car accidents that wouldn’t have been driving otherwise because they were afraid to fly
Tim: Oh,
Mickey: when, you know, no planes crashed at one point later in the year.
But in 2002, [00:18:00] Actually, since then, there’s been no plane crashes and thousands and thousands of people that died in the car because they were afraid of the plane. I mean, we lose 35, 000 people in car crashes a year anyhow, but thousands of extras that should have flown and would have flown, but they were afraid to because of, again, the big news on, on that.
all this stuff he talks about. It’s so hard to get my head around. I’m working on a lot of it and yeah, it’s tough. Even when I get in a plane now, I’m like any little thing could just plummet us and it’s out of my control, you know, but still safer and it’s hard to grasp that.
Tim: Well, he also talks about, um, like the policy implications.
So I don’t know if you’ve, you really, you dug into that at all.
Mickey: really, I
Tim: so at the end of the book, he talks about two kinds of people. Um, you’re more libertarian minded, uh, very independent, independent focus. Like, um, people are smart. They’re going to make choices. It’s either going to work out for them or not work out for them. And [00:19:00] if it doesn’t work out, then oh, well, but then there’s Uh, other kind of people that, or another way to look at it is people need guidance, guardrails, and nudges.
And so that’s why policy is so important. Like policy, whether it’s local, state, or federal policy, um, tells you. Kind of the ideal or what should happen, right? Everyone should wear seatbelts and that’s an easy one. Right? Um, people don’t still wear seatbelts, but I would say probably the vast majority of people do.
Right? Um, and it saves lives. Uh, but the policy is there to nudge us into.
This is the right thing to do. This is something that we should do. Um, so he makes that distinction and his argument at the end of the book is really that we need [00:20:00] nudges not to be left by our own devices because if we did, we’re selfish and lazy creatures , right?
And
Mickey: underestimate the wrong kind of threats. I’m a good driver, so I don’t need a seatbelt, but it’s probably not you. It’s the other people that are bad drivers and Yeah, that, that’s a good
Tim: Yeah. Yeah, yeah, yeah.
Mickey: Nudges and yeah. How, how deep should governments go to try to help us, protect us from ourselves? And there’s a, that’s a tough conversation ’cause I don’t even know where I stand on it. I mean, on one hand I want everyone to wear their seatbelts and to stop smoking, but. Should I force them to do those things?
Like I, I don’t feel like I should, but Yeah. I don’t know. It’s, it’s tricky.
Tim: Right. And well, and then there’s the whole, there’s the whole free speech thing too, right?
You know? Um, it’s like, should we really be, you know, banning things or books or speech? Right. Yeah. Um, Because people don’t like what’s in them, right? You know, especially governments Yeah,
Mickey: well that’s what it comes back to. The free speech thing gets blown away a lot where I’m in favor of Facebook blocking whatever they want because it’s their playground, I’m playing on it, [00:21:00] they’re not the government but the government coming in and stopping things is a whole different animal because that’s what it’s meant to stop so it’s, yeah, and it gets real gray in a lot of the areas in
Tim: gets real gray. Exactly. Exactly
Mickey: all right. So Tim, that’s, this has been fantastic. Anything else you want to share before we part ways here?
Tim: So, I really love this book, Mickey. I’m so glad I read it. . Good. So glad you forced me to read it. Basically,
Mickey: I try to force
Tim: people to read. That’s my goal.
Mickey: I nudge them in the right direction.
Tim: Nudges. Um, and I think, I think, uh, Daniel Kahneman’s kind of premise for the whole book was. To, uh, for like this self reflection of we have these, uh, natural biases that happen. Our system one wants to take over, right? And I think he’s really advocating for us to rely on system two a whole lot more than then maybe you would, you would think.
And, um, I just love at the, at the end, the conclusion is [00:22:00] really, um, Like bringing out the humanity in, in, uh, in the psychology of, of like our day to day lives. Um, I’m not sure if that’s exactly what he meant, but that’s what I’m getting out of it.
Mickey: right. Nice. I almost feel like system two needs to be broken in a couple pieces too.
Like things like sunk cost bias, like we’re using system two on that already, but it’s a matter of framing it correctly inside our head. That’s so much of what he talks about is. Making better use of system two, not just using it, which is important, but also understanding where our cognitive shortcuts are and how to avoid those for the betterment of ourselves or our business or whatever it might be.
So, yeah, well said, it’s worth, worth digging into that conclusion for sure. So, Tim, this has been great. Where can people find more about you if they want to see your
work?
Tim: Um, I would go to, uh, on the socials, uh, at TheRealTimVegas. I’m on, um, X threads. Instagram. And then if you just Google me, Tim Villegas, I’m around.
Mickey: Yeah. You’re, you’re pretty easy to find. You have a [00:23:00] bunch of podcasts and all this stuff you do. So it’s been fantastic. Thanks for your time. And we’ll talk soon.
Tim: Thanks Mickey.
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