Thinking Fast and Slow: Daniel Kahnemann

Quotes from various sources (without permission):

Thinking Fast and Slow: Daniel Kahnemann: 

Intelligence is not only the ability to reason: it is also the ability to find relevant material in memory and to deploy attention when needed.  

Meaning if attention is not deployed or if relevant data isn't retrieved it is a shortcoming of intelligence. If you have retrieval problems or amnesia hence would your IQ be low?  Or did the author mean that metadata with respect to specific relevant memory is stored in S2 and intelligence in S2 gets this metadata and hence sends a lookup request in S1 where memory is stored. And in case of amnesia, the lookup doesn't return anything. We say that we knew something but we are unable to recollect.. So this metadata or cross-indexing does exist. I am assuming it's in S2. If it is in S2 how is intuition - a property of S1 explained? 

Most of what you (your System 2) think and do originates in your System 1, but System 2 takes over when things get difficult, and it normally has the last word.

Does this mean that S2 can be invoked by something other than S1? What can invoke S2? Or can S2 just wake up (invoke itself) and start acting?
In this context F people (as in MBTI) who primarily run on S1 constantly monitor their own behavior, which they do, which uses S2. On the other hand T people who constantly use S2 do not monitor their own behavior. Meaning everyone uses S2 - F for one purpose (Self control of behavior) and T for thought processing. I am reminded of a lady who said I think little before I speak and I know exactly what she meant. I would say the same thing of her and of course my meaning would be very different (I would refer to her absence of rationality). 

Picture below is loc 1995 of 9376. The law of small numbers chapter 10

The associative machinery (S1) seeks causes.. This is in order to make the story more coherent.. All F (as in MBTI) people do this easily. I say don't look at the reasons. Look at the WHAT independently. Later perhaps at WHY.  For feelers the what, without why, doesn't make sense at all. 

it seems almost impossible for S1 not to do more than S2 charges it to do. 

An inability to be guided by a "healthy fear" of bad consequences is a disastrous flaw.

Most emotions including desire come from s1. Intelligence exists in S1. Even a sense of humor is from S1. It exists in N or F people only - i am predicting now. 

Subjective confidence in a judgment is not a reasoned evaluation of the probability that this judgment is correct. Confidence is a feeling, which reflects the coherence of the information and cognitive ease of processing it. It is wise to take admissions of uncertainty seriously, but declarations of high confidence mainly tell you that an individual has constructed a coherent story in his mind, Not necessarily that the story is true.
Individual winners like to lock in their gains by selling "winners" - stocks that have appreciated since they were purchased, and they hang on to their losers. Unfortunately for them, recent winners tend to do better than recent losers in the short run, so individuals sell the wrong stocks. 

My question
Doesn't regression to mean happen? Won't recent winners become losers? 

Whether professionals have a chance to develop intuitive expertise depends essentially on the quality and speed of feedback, as well as on sufficient opportunity to practice. 

if so how do we explain Einstein's intuition which led him to understand about speed of light, theory of relativity etc. what experience did he have?. 

You know you have made a theoretical advance when you can no longer reconstruct why you failed for so long to see the obvious. " this quote is so beautiful. 

When we know doing something is not good (S2 decision),  and we still do it e-g., drinking alcohol, carrying bitterness, taking a non-optimal option we are using S1. This is obvious but it struck me forcefully.. (For example read this: Why do we have a conversation with a person whom we don't like much - http://vbala99.blogspot.com/2017/10/what-drives-conversation.html)

Subjective confidence in a judgment is not a reasoned evaluation of the probability that this judgment is correct.  Confidence is a feeling,  which reflects the coherence of the information and cognitive ease of processing it. It is wise to b  admissions of uncertainty seriously,  but declarations of Hugh confidence mainly tell you that an individual has constructed a continent story in his mind
The average selling price was double the average buying price.  The magic of the market didn't work for a good that the owners expected to use. a basic rule of fairness we found is that the exploitation of market power to impose losses on others is unacceptable.
When you take the long view of many similar decisions, you can see that paying a premium to avoid a small risk of a large loss is costly.. Constituent overweighting of improbable outcomes - a feature of intuitive decision making-eventually leads to inferior outcomes.

A brilliant example from the book:

https://en.m.wikipedia.org/wiki/Ego_depletion

Ego depletion has also been implicated in guilt and prosocial behavior. The feeling of guilt, while unpleasant, is necessary to facilitate adaptive human interactions.[17] The experience of guilt is dependent on one’s ability to reflect on past actions and behaviors. Ego depletion has been shown to hinder the ability to engage in such reflection, thereby making it difficult to experience guilt.

From: https://en.m.wikipedia.org/wiki/Dual_process_theory

In their theory, there are two different routes to persuasion in making decisions. The first route is known as the central route and this takes place when a person is thinking carefully about a situation, elaborating on the information they are given, and creating an argument. This route occurs when an individual's motivation and ability are high. The second route is known as the peripheral route and this takes place when a person is not thinking carefully about a situation and uses shortcuts to make judgments. This route occurs when an individual's motivation or ability are low.[5]

Now we know that often children who were not good performers turn out often times to be good later on as adults. Now did their ability improve or their motivation? I am inclined to think its the latter. As children were perhaps not motivated to do things which did not lead to meeting any objective of theirs (which is fun, eating sweets, playing games etc.). As adults with the motivation to get things for themselves they perform far better than they did as adults - also they tend to perform far better than people who performed well as children.
http://upfrontanalytics.com/market-research-system-1-vs-system-2-decision-making/

Market researchers should keep in mind that the more complex the research collection process becomes (more question types, complex answer matrices, thought experiments etc.), the more likely they are to collect responses generated by System 2. Since most of the System 1 decision making process is unconscious, respondents are more likely to offer what they consider to be plausible rationalizations for their decisions rather than their true underlying attitudes and motivations. In situations where there is social pressure to respond in a particular way, System 2 may even filter these rationalizations to create “appropriate” responses. 

http://bigthink.com/errors-we-live-by/kahnemans-mind-clarifying-biases.amp

He was astonished that economists modeled people as “rational, selfish, with tastes that don’t change,” when to psychologists “it is self-evident that people are neither fully rational nor completely selfish, and that their tastes are anything but stable.”   

http://bigthink.com/delancey-place/the-two-systems-of-cognitive-processes.amp

People who are cognitively busy are also more likely to make selfish choices, use sexist language, and make superficial judgments in social situations. 

Some people are strong in system 1 (S1), some strong in S2. 

For example, a friend of mine was planning to buy an apartment. She had to pay an advance. She did not have liquid cash to make the down payment. She had an FD the value of which was much more than the advance that was to be paid, but that was to mature only after 6 months. So she was stuck.. 

Now which system of hers decided that she couldn't do anything? The system that believed FD should not be broken prematurely - regardless of circumstance.. Where is this rule stored?  This is a blind reaction from J - unthinking response. Like i tell you often.. J has a builtin idiocy.. This "won't break FD" is such an example. This is system 1. 

If you hand over control to system 2:Cost of breaking FD = penalty comes out to about 15,000. The house cost is 30+ lacs.. How big is 15k (=15000)? The penalty for breaking FD is a very small amount - but before S2 can handle,  the J in S1 comes with a silly answer. CANT BREAK FD and hence CANT BUY HOUSE.

S1 is the system that makes 1000's of decisions everyday in our lives without us being even aware of it. And most decisions are good.. That's why we are still alive. If we let S2 handle all our decisions we can handle only 100 in a day max and then have a splitting migraine everyday. Plus we would be too sore and tired to do any S2 work required by our job.  

Most animals survive having S1 only. How do animals know which food to eat and which to avoid?  Through efficient S1. Evolution is all about System 1. When S2 is handed over control, the decisions are calculated and not intuitive. Not using S2 is not too bad.

Intuitive Feelers (largely S1) would not be impressed by this book - unless they can profit tangibly by it. Some people invoke S2 only for abstract things such as for reflecting on this book. For them reading it feels good and they may get a better understanding of the decisions of human beings. Any profit from that understanding is remote. Both types may have good S2. But both use it for very different purposes. 

As per DK, good mood, intuition, creativity, gullibility, increased dependence on S1 form a cluster. At the other pole, sadness, vigilance, suspicion, an analytic approach and increased effort go together.
Amazing. The 1st set seems to be of Venus and the 2nd of Saturn.

The questions I have:

1. Is everyone's S2 at the same level or my S2 is more powerful than yours? And yours is lazier than hers because you abort your S2 sooner more often?
2. What causes or propels use of system 2? How is ambition related to system 1,2?
3. What is the role of energy in personality trait? A person with a strong Mars behaves very differently from a person who has weak Mars - other things being same.
4. What kind of people have larger System 2 and what kind of people are primarily System 1? My belief is that N, F, J (as in MBTI) are largely S1 people and T, P are system 2 people.
5. If S2 can not be ever invoked by anything other than S1 and if S1 cannot be controlled, being automatic, then S2 also cannot be controlled. In which case which part of our mind is under control? Is there a free will?

Interesting Books / other artifacts referred to by the author:

• A Checklist Manifesto How To Get Things Right by Atul Gawande 
• A Random Walk Down Wall Street by Burton Malkiel 
• Baynesian Statistics - the logic of how people should change their mind in light of new evidence
• Big Short film by Richard Thaler
• Black Swan by Nassim Taleb 
• Clinical Vs Statistical Prediction. A Theoretical Analysis And A Review Of Evidence by Paul Meehl (Must read)
• Decision Making In Organizations by Herbert Simon (Nobel Prize Winner)
• Expert Political Judgment. How Good Is It How Can We Know by Philip Tetlock 
• Halo effect by Philip Rosenzweig
• How To Solve by George Polya
• Judgment In Managerial Decision Making by Max Bazerman
• Articles / books by Kathleen Vohn about how money priming affects our behavior.
• Moneyball by Michael Lewis 
• Nudge by Richard Thaler.
• Rationality and the reflective Mind by Keith Stanovich and Richard West (on why some people are more S1 or S2)
• Simple Heuristics That Make Us Smarter (Oxford Univ Press) Gerd Gigdrenzer
• Sources of Power by Gary Klein
• Wisdom of Crowds by James Surowieci

Additional reading:

1. https://healthymemory.wordpress.com/2009/12/16/sq3r/
2. http://vbala99.blogspot.com/2017/10/define-freewil.html
3. https://www.ted.com/talks/daniel_kahneman_the_riddle_of_experience_vs_memory/up-next?utm_source=whatsapp&utm_medium=social&utm_campaign=tedspread--b#t-1187322
4. https://wiki.lesswrong.com/wiki/Thinking,_Fast_and_Slow,_by_Daniel_Kahneman
5. http://innovationgarden.typepad.com/innovation-garden/2014/11/thinking-fast-and-slow-book-by-kahneman.html