Daniel Kahneman

Daniel Kahneman (Hebrew: דניאל כהנמן‎, born March 5, 1934) is an Israeli-American psychologist notable for his work on the psychology of judgment and decision-making, as well as behavioral economics, for which he was awarded the 2002 Nobel Memorial Prize in Economic Sciences (shared with Vernon L. Smith). His empirical findings challenge the assumption of human rationality prevailing in modern economic theory.

With Amos Tversky and others, Kahneman established a cognitive basis for common human errors that arise from heuristics and biases (Kahneman & Tversky, 1973; Kahneman, Slovic & Tversky, 1982; Tversky & Kahneman, 1974), and developed prospect theory (Kahneman & Tversky, 1979).

In 2011, he was named by Foreign Policy magazine to its list of top global thinkers.^[1] In the same year, his book Thinking, Fast and Slow, which summarizes much of his research, was published and became a best seller.^[2]

He is professor emeritus of psychology and public affairs at Princeton University's Woodrow Wilson School. Kahneman is a founding partner of TGG Group, a business and philanthropy consulting company. He is married to Royal Society Fellow Anne Treisman.^[3]

In 2015 The Economist listed him as the seventh most influential economist in the world.^[4]

Biography

Daniel Kahneman was born in Tel Aviv in 1934, where his mother was visiting relatives. He spent his childhood years in Paris, France, where his parents had emigrated from Lithuania in the early 1920s. Kahneman and his family were in Paris when it was occupied by Nazi Germany in 1940. His father was picked up in the first major round-up of French Jews, but he was released after six weeks due to the intervention of his employer. The family was on the run for the remainder of the war, and it survived intact except for the death of Kahneman's father due to diabetes in 1944. Kahneman and his family then moved to British Mandatory Palestine in 1948, just before the creation of the state of Israel (Kahneman, 2003).

Kahneman has written of his experience in Nazi-occupied France, explaining in part why he entered the field of psychology:

It must have been late 1941 or early 1942. Jews were required to wear the Star of David and to obey a 6 p.m. curfew. I had gone to play with a Christian friend and had stayed too late. I turned my brown sweater inside out to walk the few blocks home. As I was walking down an empty street, I saw a German soldier approaching. He was wearing the black uniform that I had been told to fear more than others – the one worn by specially recruited SS soldiers. As I came closer to him, trying to walk fast, I noticed that he was looking at me intently. Then he beckoned me over, picked me up, and hugged me. I was terrified that he would notice the star inside my sweater. He was speaking to me with great emotion, in German. When he put me down, he opened his wallet, showed me a picture of a boy, and gave me some money. I went home more certain than ever that my mother was right: people were endlessly complicated and interesting. (Kahneman, 2003, p. 417)

Kahneman received his bachelor of science degree with a major in psychology and a minor in mathematics from the Hebrew University of Jerusalem in 1954. After earning his undergraduate degree, he served in the psychology department of the Israeli Defense Forces. One of his responsibilities was to evaluate candidates for officer's training school, and to develop tests and measures for this purpose. In 1958, he went to the United States to study for his PhD in Psychology from the University of California, Berkeley.

Academic career

Cognitive psychology

Kahneman began his academic career as a lecturer in psychology at the Hebrew University of Jerusalem in 1961. He was promoted to senior lecturer in 1966. His early work focused on visual perception and attention. For example, his first publication in the prestigious journal Science was entitled "Pupil Diameter and Load on Memory" (Kahneman & Beatty, 1966). During this period, Kahneman was a visiting scientist at the University of Michigan (1965–66) and the Applied Psychology Research Unit in Cambridge (1968/1969, summers). He was a fellow at the Center for Cognitive Studies and a lecturer in cognitive psychology at Harvard University in 1966/1967.

Judgment and decision-making

This period marks the beginning of Kahneman's lengthy collaboration with Amos Tversky. Together, Kahneman and Tversky published a series of seminal articles in the general field of judgment and decision-making, culminating in the publication of their prospect theory in 1979 (Kahneman & Tversky, 1979). Kahneman was ultimately awarded the Nobel Memorial Prize in Economics in 2002 for his work on prospect theory (see below). Following this, the pair teamed with Paul Slovic to edit a compilation entitled "Judgement Under Uncertainty: Heuristics and Biases" (1982) that proved to be an important summary of their work and of other recent advances that had influenced their thinking.

In his Nobel biography, Kahneman states that his collaboration with Tversky began after Kahneman had invited Tversky to give a guest lecture to one of Kahneman's seminars at Hebrew University in 1968 or 1969. Their first jointly written paper, "Belief in the Law of Small Numbers," was published in 1971 (Tversky & Kahneman, 1971). They published seven articles in peer-reviewed journals in the years 1971–1979. Aside from "Prospect Theory," the most important of these articles was "Judgment Under Uncertainty: Heuristics and Biases" (Tversky & Kahneman, 1974), which was published in the prestigious journal Science and introduced the notion of anchoring.

Kahneman left Hebrew University in 1978 to take a position at the University of British Columbia.

Behavioral economics

Kahneman and Tversky were both fellows at the Center for Advanced Study in the Behavioral Sciences at Stanford University in the academic year 1977–1978. A young economist named Richard Thaler was a visiting professor at the Stanford branch of the National Bureau of Economic Research during that same year. According to Kahneman, "[Thaler and I] soon became friends, and have ever since had a considerable influence on each other's thinking" (Kahneman, 2003, p. 437). Building on prospect theory and Kahneman and Tversky's body of work, Thaler published "Toward a Positive Theory of Consumer Choice" in 1980, a paper which Kahneman has called "the founding text in behavioral economics" (Kahneman, 2003, p. 438).

Kahneman and Tversky became heavily involved in the development of this new approach to economic theory, and their involvement in this movement had the effect of reducing the intensity and exclusivity of their earlier period of joint collaboration. They would continue to publish together until the end of Tversky's life, but the period when Kahneman published almost exclusively with Tversky ended in 1983, when he published two papers with Anne Treisman, his wife since 1978.

Hedonic psychology

In the 1990s, Kahneman's research focus began to gradually shift in emphasis towards the field of "hedonic psychology". This subfield is closely related to the positive psychology movement, which was steadily gaining in popularity at the time. According to Kahneman and colleagues,

Hedonic psychology...is the study of what makes experiences and life pleasant or unpleasant. It is concerned with feelings of pleasure and pain, of interest and boredom, of joy and sorrow, and of satisfaction and dissatisfaction. It is also concerned with the whole range of circumstances, from the biological to the societal, that occasion suffering and enjoyment.^[5]

It is difficult to determine precisely when Kahneman's research began to focus on hedonics, although it likely stemmed from his work on the economic notion of utility. After publishing multiple articles and chapters in all but one of the years spanning the period 1979–1986 (for a total of 23 published works in 8 years), Kahneman published exactly one chapter during the years 1987–1989. After this hiatus, articles on utility and the psychology of utility began to appear (e.g., Kahneman & Snell, 1990; Kahneman & Thaler, 1991; Kahneman & Varey, 1991). In 1992, Varey and Kahneman introduced the method of evaluating moments and episodes as a way to capture "experiences extended across time". While Kahneman continued to study decision-making (e.g., Kahneman, 1992, 1994; Kahneman & Lovallo, 1993), hedonic psychology was the focus of an increasing number of publications (e.g., Fredrickson & Kahneman, 1993; Kahneman, Fredrickson, Schreiber & Redelemeier, 1993; Kahneman, Wakker & Sarin, 1997; Redelmeier & Kahneman, 1996), culminating in a volume co-edited with Ed Diener and Norbert Schwarz, scholars of affect and well-being.^[6]

With David Schkade, Kahneman developed the notion of the focusing illusion (Kahneman & Schkade, 1998; Kahneman, Krueger, Schkade, Schwarz & Stone, 2006) to explain in part the mistakes people make when estimating the effects of different scenarios on their future happiness (also known as affective forecasting, which has been studied extensively by Daniel Gilbert). The "illusion" occurs when people consider the impact of one specific factor on their overall happiness, they tend to greatly exaggerate the importance of that factor, while overlooking the numerous other factors that would in most cases have a greater impact. A good example is provided by Kahneman and Schkade's 1998 paper "Does living in California make people happy? A focusing illusion in judgments of life satisfaction". In that paper, students in the Midwest and in California reported similar levels of life satisfaction, but the Midwesterners thought their Californian peers would be happier. The only distinguishing information the Midwestern students had when making these judgments was the fact that their hypothetical peers lived in California. Thus, they "focused" on this distinction, thereby overestimating the effect of the weather in California on its residents' satisfaction with life.

Teaching

Kahneman is a senior scholar and faculty member emeritus at Princeton University's Department of Psychology and Woodrow Wilson School of Public and International Affairs. He is also a fellow at Hebrew University and a Gallup Senior Scientist.^[7]

Personal

Kahneman is married to the award-winning cognitive psychologist Anne Treisman. They live part-time in Berkeley, California.^[8]

Awards and recognition

In 2002, Kahneman received the Nobel Memorial Prize in Economics, despite being a research psychologist, for his work in prospect theory. Kahneman states he has never taken a single economics course – that everything that he knows of the subject he and Tversky learned from their collaborators Richard Thaler and Jack Knetsch.
Kahneman, co-recipient with Tversky, earned the 2003 University of Louisville Grawemeyer Award for Psychology.^[9]
In 2007, he was presented with the American Psychological Association's Award for Outstanding Lifetime Contributions to Psychology.^[10]
On November 6, 2009, he was awarded an honorary doctorate from the department of Economics at Erasmus University in Rotterdam, Netherlands. In his acceptance speech Kahneman said, "when you live long enough, you see the impossible become reality." He was referring to the fact that he would never have expected to be honored as an economist when he started his studies into what would become Behavioral Economics.^[11]
In both 2011 and 2012, he made the Bloomberg 50 most influential people in global finance.^[12]
On November 9, 2011, he was awarded the Talcott Parsons Prize by the American Academy of Arts and Sciences. To see his lecture, click the link below.^[13]
His book, Thinking, Fast and Slow was the winner of the 2011 Los Angeles Times Book Award for Current Interest.^[14]
In 2012 his book, Thinking, Fast and Slow, was awarded the National Academy of Sciences Communication Award for the best book published in 2011.^[15]
In 2012 he was accepted as corresponding academician at the Real Academia Española (Economic and Financial Sciences).^[16]
On August 8, 2013, President Barack Obama announced that Daniel Kahneman would be a recipient of the Presidential Medal of Freedom.^[17]
On June 1, 2015, he was awarded an honorary doctorate from the Faculty of Arts at McGill University in Montreal.^[18]

Notable contributions

Published works

The following is a partial list of publications.

Papers

Kahneman, D.; Beatty, J. (1966). "Pupil diameter and load on memory". Science 154 (3756): 1583–1585. doi:10.1126/science.154.3756.1583. PMID 5924930.
Tversky, A.; Kahneman, D. (1971). "Belief in the law of small numbers". Psychological Bulletin 76 (2): 105–110. doi:10.1037/h0031322.
Kahneman, D.; Tversky, A. (1972). "Subjective probability: A judgment of representativeness". Cognitive Psychology 3 (3): 430–454. doi:10.1016/0010-0285(72)90016-3.
Kahneman, D. (1973). Attention and effort. Englewood Cliffs, NJ: Prentice-Hall.
Kahneman, D.; Tversky, A. (1973). "On the psychology of prediction". Psychological Review 80 (4): 237–251. doi:10.1037/h0034747.
Tversky, A.; Kahneman, D. (1973). "Availability: A heuristic for judging frequency and probability". Cognitive Psychology 5 (2): 207–232. doi:10.1016/0010-0285(73)90033-9.
Tversky, A.; Kahneman, D. (1974). "Judgment under uncertainty: Heuristics and biases". Science 185 (4157): 1124–1131. doi:10.1126/science.185.4157.1124. PMID 17835457.
Kahneman, D.; Tversky, A. (1979). "Prospect theory: An analysis of decisions under risk". Econometrica 47 (2): 263–291. doi:10.2307/1914185. JSTOR 1914185.
Kahneman, D.; Tversky, A. (1979). "Prospect theory: An analysis of decisions under risk". Econometrica 47 (2): 313–327. doi:10.2307/1914185.
Tversky, A.; Kahneman, D. (1981). "The framing of decisions and the psychology of choice". Science 211 (4481): 453–458. doi:10.1126/science.7455683. PMID 7455683.
Kahneman, D.; Tversky, A. (1984). "Choices, values and frames". American Psychologist 39 (4): 341–350. doi:10.1037/0003-066X.39.4.341.
Kahneman, D.; Miller, D.T. (1986). "Norm theory: Comparing reality to its alternatives". Psychological Review 93 (2): 136–153. doi:10.1037/0033-295X.93.2.136.
Kahneman, D.; Knetsch, J.L.; Thaler, R.H. (1990). "Experimental tests of the endowment effect and the Coase theorem". Journal of Political Economy 98 (6): 1325–1348. doi:10.1086/261737.
Fredrickson, B. L.; Kahneman, D. (1993). "Duration neglect in retrospective evaluations of affective episodes". Journal of Personality and Social Psychology 65 (1): 45–55. doi:10.1037/0022-3514.65.1.45. PMID 8355141.
Kahneman, D.; Lovallo, D. (1993). "Timid choices and bold forecasts: A cognitive perspective on risk-taking". Management Science 39: 17–31. doi:10.1287/mnsc.39.1.17.
Kahneman, D.; Tversky, A. (1996). "On the reality of cognitive illusions". Psychological Review 103 (3): 582–591. doi:10.1037/0033-295X.103.3.582. PMID 8759048.
Schkade, D. A.; Kahneman, D. (1998). "Does living in California make people happy? A focusing illusion in judgments of life satisfaction". Psychological Science 9 (5): 340–346. doi:10.1111/1467-9280.00066.
Kahneman, D., Diener, E., & Schwarz, N. (Eds.). (1999). Well-being: The foundations of hedonic psychology. New York: Russell Sage Foundation.
Kahneman, D. (2003). "A perspective on judgment and choice: Mapping bounded rationality". American Psychologist 58 (9): 697–720. doi:10.1037/0003-066X.58.9.697. PMID 14584987.
Kahneman, D.; Krueger, A.; Schkade, D.; Schwarz, N.; Stone, A. (2006). "Would you be happier if you were richer? A focusing illusion" (PDF). Science 312 (5782): 1908–10. doi:10.1126/science.1129688. PMID 16809528.
Kahneman, D. (2003). Maps of bounded rationality: A perspective on intuitive judgment and choice. In T. Frangsmyr (Ed.), Les Prix Nobel 2002 [Nobel Prizes 2002]. Stockholm, Sweden: Almquist & Wiksell International. Note that this chapter has two sections: the first is an autobiography (with a eulogy for Amos Tversky), and the second is a transcript of his Nobel lecture, which is what the title refers to. The autobiographical portion has been republished as: Kahneman, D. (2007). Daniel Kahneman. In G. Lindzey & W.M. Runyan (Eds.), A History of Psychology in Autobiography, Volume IX (pp. 155–197). Washington, DC: American Psychological Association. It is also available on the Nobel Prize website.

Books

Kahneman, (D). (1973) Attention and effort. Englewood Cliffs, NJ: Prentice-Hall.
Kahneman, D., Slovic, P., & Tversky, A. (1982) Judgment Under Uncertainty: Heuristics and Biases. New York: Cambridge University Press.
Kahneman, D., & Tversky, A. (Eds.) (2000) Choices, values and frames. New York: Cambridge University Press.
Kahneman, D. (2011) Thinking, Fast and Slow, Farrar, Straus and Giroux, ISBN 978-0374275631. (Reviewed by Freeman Dyson in New York Review of Books, 22 December 2011, pp. 40–44.)

Interviews

'Can We Trust Our Intuitions?' in Alex Voorhoeve Conversations on Ethics. Oxford University Press, 2009. ISBN 978-0-19-921537-9 (Discusses Kahneman's views about the reliability of moral intuitions [case judgments] and the relevance of his work for the search for 'reflective equilibrium' in moral philosophy.)

Radio interviews

Online interviews

Thinking about Thinking – An Interview with Daniel Kahneman (2011)

Television interviews

How You Really Make Decisions – Horizon (BBC TV series) – Series 2013–2014 No.9

Bibliography

Kahneman, Daniel; Diener, Ed; Schwarz, Norbert (1999). Well-Being. The Foundations of Hedonic Psychology. Russell Sage Foundation. ISBN 0-87154-424-5.

References

↑ "The FP Top 100 Global Thinkers. 71 Daniel Kahneman". foreignpolicy.com. November 28, 2011. Retrieved November 3, 2012.
↑ "The New York Times Best Seller List – December 25, 2011" (PDF). www.hawes.com. Retrieved 2014-08-17.
↑ Kahneman, Daniel (2002). "Autobiography". nobelprize.org. Retrieved November 3, 2012.
↑ http://www.economist.com/blogs/freeexchange/2015/01/influential-economists
↑ Kahneman, Diener & Schwarz 1999, p. ix.
↑ Kahneman, Diener & Schwarz 1999.
↑ "Daniel Kahneman, Ph.D.". The Gallup Organization. 2012. Retrieved November 3, 2012.
↑ "How You Really Make Decisions". Horizon. Series 2013-2014. Episode 9. 2014-02-24. Event occurs at 00:20:13. BBC. BBC Two. Retrieved 2014-02-26. I live in Berkeley during summers and I walk a lot.
↑ "2003- Daniel Kahneman and Amos Tversky".
↑ Cynkar, Amy (April 4, 2007). "A towering figure". Monitor on Psychology (American Psychological Association). Retrieved November 26, 2008. Daniel Kahneman will receive APA’s lifetime contributions award at convention for his work challenging human rationality and decision-making.
↑ "Daniel Kahneman". Erasmus University Rotterdam. Retrieved November 3, 2012.
↑ "The 50 Most Influential People in Global Finance". Bloomberg L.P. Retrieved November 3, 2012.
↑ "Talcott Parsons Prize Ceremony and Address: Two Systems in the Mind". American Academy of Arts and Sciences. November 9, 2011. Retrieved November 3, 2012.
↑ "Alex Shakar, Stephen King win Times Book Prizes". LA Times (Tribune Company). April 20, 2012. Retrieved November 3, 2012.
↑ "And the Winners Are …". Keck Futures Initiative (National Academy of Sciences). October 12, 2012. Retrieved June 24, 2013. An outstanding and accessible book that brings to the public key scientific insights about how we think and make decisions.
↑ "His Excellency Dr. Daniel Kahneman". www.racef.es. June 14, 2012. Retrieved November 2, 2012.
↑ "President Obama Names Presidential Medal of Freedom Recipients". Office of the Press Secretary, The White House. August 8, 2013. Retrieved August 8, 2013.
↑ http://publications.mcgill.ca/reporter/2015/04/mcgill-to-award-16-honorary-degrees%E2%80%A8/

External links

Wikiquote has quotations related to: Daniel Kahneman

Official website (at Princeton)
Kahneman's resume (2011)
Works by or about Daniel Kahneman in libraries (WorldCat catalog)
Maps of Bounded Rationality 2002 lecture at NobelPrize.org
Profile and Papers at Research Papers in Economics (RePEc)
Daniel Kahneman at TED
- "The riddle of experience vs. memory" (TED2010)
Teller exploits fast thinking
Talcott Parsons Prize Ceremony and Address: Two Systems of the Mind
Review: Thinking, Fast and Slow by Daniel Kahneman
2012 Singularity Summit Q&A with Kahneman on Fora.tv
Daniel Kahneman (1934– ). The Concise Encyclopedia of Economics. Library of Economics and Liberty (2nd ed.) (Liberty Fund). 2008.

Topics in game theory

Definitions	Normal-form game Extensive-form game Escalation of commitment Graphical game Cooperative game Succinct game Information set Hierarchy of beliefs Preference

Equilibrium concepts	Nash equilibrium Subgame perfection Mertens-stable equilibrium Bayesian-Nash Perfect Bayesian Trembling hand Proper equilibrium Epsilon-equilibrium Correlated equilibrium Sequential equilibrium Quasi-perfect equilibrium Evolutionarily stable strategy Risk dominance Core Shapley value Pareto efficiency Quantal response equilibrium Self-confirming equilibrium Strong Nash equilibrium Markov perfect equilibrium

Strategies	Dominant strategies Pure strategy Mixed strategy Tit for tat Grim trigger Collusion Backward induction Forward induction Markov strategy

Classes of games	Symmetric game Perfect information Simultaneous game Sequential game Repeated game Signaling game Cheap talk Zero-sum game Mechanism design Bargaining problem Stochastic game n-player game Large Poisson game Nontransitive game Global games Strictly determined game

Games	Prisoner's dilemma Traveler's dilemma Coordination game Chicken Centipede game Volunteer's dilemma Dollar auction Battle of the sexes Stag hunt Matching pennies Ultimatum game Rock-paper-scissors Pirate game Dictator game Public goods game Blotto games War of attrition El Farol Bar problem Fair division Fair cake-cutting Cournot game Deadlock Diner's dilemma Guess 2/3 of the average Kuhn poker Nash bargaining game Screening game Prisoners and hats puzzle Trust game Princess and monster game Monty Hall problem Rendezvous problem

Theorems	Minimax theorem Nash's theorem Purification theorem Folk theorem Revelation principle Arrow's impossibility theorem

Key figures	Albert W. Tucker Amos Tversky Ariel Rubinstein Daniel Kahneman David K. Levine David M. Kreps Donald B. Gillies Drew Fudenberg Eric Maskin Harold W. Kuhn Herbert Simon Hervé Moulin Jean Tirole Jean-François Mertens John Harsanyi John Maynard Smith John Nash John von Neumann Kenneth Arrow Kenneth Binmore Leonid Hurwicz Lloyd Shapley Melvin Dresher Merrill M. Flood Oskar Morgenstern Paul Milgrom Peyton Young Reinhard Selten Robert Aumann Robert B. Wilson Roger Myerson Samuel Bowles Thomas Schelling William Vickrey

See also	All-pay auction Alpha–beta pruning Bertrand paradox Bounded rationality Combinatorial game theory Confrontation analysis Coopetition List of game theorists List of games in game theory No-win situation Topological game Tragedy of the commons Tyranny of small decisions

Laureates of the Nobel Memorial Prize in Economic Sciences

1969–1975	1969 Ragnar Frisch / Jan Tinbergen 1970 Paul Samuelson 1971 Simon Kuznets 1972 John Hicks / Kenneth Arrow 1973 Wassily Leontief 1974 Gunnar Myrdal / Friedrich Hayek 1975 Leonid Kantorovich / Tjalling Koopmans

1976–2000	1976 Milton Friedman 1977 Bertil Ohlin / James Meade 1978 Herbert A. Simon 1979 Theodore Schultz / Arthur Lewis 1980 Lawrence Klein 1981 James Tobin 1982 George Stigler 1983 Gérard Debreu 1984 Richard Stone 1985 Franco Modigliani 1986 James M. Buchanan 1987 Robert Solow 1988 Maurice Allais 1989 Trygve Haavelmo 1990 Harry Markowitz / Merton Miller / William F. Sharpe 1991 Ronald Coase 1992 Gary Becker 1993 Robert Fogel / Douglass North 1994 John Harsanyi / John Forbes Nash, Jr. / Reinhard Selten 1995 Robert Lucas, Jr. 1996 James Mirrlees / William Vickrey 1997 Robert C. Merton / Myron Scholes 1998 Amartya Sen 1999 Robert Mundell 2000 James Heckman / Daniel McFadden

2001–present	2001 George Akerlof / Michael Spence / Joseph E. Stiglitz 2002 Daniel Kahneman / Vernon L. Smith 2003 Robert F. Engle / Clive Granger 2004 Finn E. Kydland / Edward C. Prescott 2005 Robert Aumann / Thomas Schelling 2006 Edmund Phelps 2007 Leonid Hurwicz / Eric Maskin / Roger Myerson 2008 Paul Krugman 2009 Elinor Ostrom / Oliver E. Williamson 2010 Peter A. Diamond / Dale T. Mortensen / Christopher A. Pissarides 2011 Thomas J. Sargent / Christopher A. Sims 2012 Alvin E. Roth / Lloyd S. Shapley 2013 Eugene Fama / Lars Peter Hansen / Robert J. Shiller 2014 Jean Tirole 2015 Angus Deaton

Authority control	WorldCat Identities VIAF: 104274679 LCCN: n81055169 ISNI: 0000 0001 0930 0729 GND: 124127487 SUDOC: 069198616 BNF: cb12848609b (data) BIBSYS: x90409967 NDL: 001124250

This article is issued from Wikipedia - version of the Saturday, April 16, 2016. The text is available under the Creative Commons Attribution/Share Alike but additional terms may apply for the media files.