Thinking Fast and Slow Essay
Thinking Fast and Slow
1. One of the book’s more stunning examples of the priming effect takes place in an office kitchen. Employees would typically make themselves coffee or tea and in return would drop a small fee into an “honesty” box. Researchers designed an experiment that involved alternating weeks where either a picture of a flowerpot or a picture of a set of eyes was in the room. Donations were checked after ten weeks and researchers found that significantly more money was contributed on weeks in which the eyes were in the room.
Given this, and other examples of priming, do you find it feasible for organizations to devise methods that attempt to prime their employees to perform or react in a desirable manner?
2. One of the errors of System 1 is known as the framing effect. This refers to the ability of the way in which a problem is presented to influence an individual’s solution to it. Kahneman’s example in the book involves doctors at Harvard Medical School. In seeking their opinion a question is framed using either survival rate or mortality rate, with relative figures being the same. Despite this, 84% of the participants selected surgery that referred to a patient’s survival rate.
Knowing the effects of framing a question either too broadly, too narrowly, or incorrectly all together, what are measures that organizations can take to ensure that their employees understand how to properly frame problems in such a way that the companies’ primary objectives are being targeted?
3. The book advocates that in our search for a causal link between occurrences in our lives we often dismiss the legitimacy of luck’s involvement in our success. To demonstrate this point, Kahneman points out that the gap in corporate profitability and stock returns between high performance firms and less successful firms dissipates to nearly nothing over time. In fact, over a 20 year period the returns of companies that originally had the worst ratings went on to earn much higher returns than their counterparts, which he refers to regression to the mean.
Given that we may not necessarily be as talented as we perceive ourselves to be, what are steps that organizations can take to ensure that top brass is better able to understand what may actually be creating the company’s success?
University/College: University of Chicago
Type of paper: Thesis/Dissertation Chapter
Date: 11 October 2016
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