Psychologist Daniel Kahneman, Nobel laureate in Economics who redesigned thinking, has died | Psychology

Daniel Kahneman, a psychologist awarded the Nobel Prize in Economics for his research into the way we make decisions and ignore logic, died this Wednesday. Kahneman was 90 years old.

Without a degree in Economics, he used what he knew about psychology to consolidate a new field of study: behavioral economics, which made it possible to interpret human decisions taking into account the beliefs, memories and inclinations that cloud our reasoning and lead to contradictory conclusions.

Since Adam Smith (18th century) traditional economics has seen humans as rational beings, guided by what is most beneficial to them when faced with a scenario of uncertainty — we speak of the so-called homo economicus.

Daniel Kahneman redesigned the portrait of thought: influenceable, fallacious, fallible, mostly unconscious. Good decisions could not come from an inherent rationality in the human being — this objectivity did not exist.

In 2002, when he was associated with Princeton University, he was awarded the Nobel Prize in Economics “for having integrated knowledge from psychological research into economic sciences, especially with regard to human discernment and decision-making”. The prize was shared with Vernon L. Smith, a pioneer in the use of laboratory experiments in economics.

“Many people are overconfident and tend to place too much faith in their intuitions,” argued Kahneman in the book Fast and Slow: Two Ways of Thinkingpublished in 2011. “They consider cognitive effort to be at least slightly unpleasant and avoid it as much as possible.”

In this work, he separates quick thinking: intuitive, guided by emotions and past experiences, mostly unconscious; of slow, more rational and analytical thinking.

In his understanding, “delusional optimism” — which characterizes many entrepreneurs and businesses — is one of the essential driving forces of the economy and capitalism. Despite recognizing the value of optimism, he was, throughout his life, a cautious pessimist.

Kahneman’s studies, many written jointly with psychologist Amos Tversky, changed our perspective on decision-making in economic terms, but not only. They influenced statistical thinking in sport, the way governments develop public policies, how doctors make diagnoses and how judges evaluate sentences.

In one of the experiments conducted by both, they demonstrated that someone was much more likely to agree to take a 20-minute detour to save five euros on a total expense of 15 euros, than on a total expense of 125 euros.

The duo also developed the theory of loss aversion, which shows that the individual is more influenced by losses than by gains. For example: losing 100 euros will cause a much more intense feeling of disappointment when compared to the happiness of finding a 100 note.

Daniel Kahneman was born in 1934 in Tel Aviv, in British-mandated Palestine (currently Israeli territory), but grew up in Paris. He escaped Nazi persecution during the Second World War and returned to the land where he was born and where the State of Israel was then born. He graduated in Psychology and Mathematics from the Hebrew University of Jerusalem and left for the United States, where he was associated with the universities of Berkeley, Michigan, Harvard, Stanford and Princeton.