Daniel Kahneman, PhD

“Happiness is determined by factors like your health, your family relationships and friendships, and above all by feeling that you are in control of how you spend your time.”

Influence on SDC Framework Focus

Kahneman identified two kinds of thinking that shape how decisions are made. System 1 is quick, automatic, and often driven by habit or past experience. System 2 is slower and more deliberate, used for weighing options, solving problems, or checking assumptions. While System 1 helps keep things moving, it can also skip over important details. System 2 steps in when a situation calls for more care or reflection.

Often, people seek coaching when a behavioral pattern continues to miss the mark—when the same quick response keeps leading to conflict, regret, or missed opportunities. The Self-Directed Change® (SDC) Method encourages pausing to ask whether a reaction is based on what’s happening now, or if it’s coming from a familiar but outdated script. Kahneman’s language helps name what’s happening in those moments. SDC offers structure to explore and shift those patterns.

Kahneman’s work also explains how System 1 relies heavily on mental shortcuts—like jumping to conclusions or accepting something simply because it feels familiar. The SDC Method slows that process down, guiding decisions step by step so that System 2 thinking has time to notice unhelpful habits, evaluate alternatives, and support more thoughtful choices.

Memory also plays a role in Kahneman’s view of decision-making. He found that remembered experiences are often shaped more by peak moments or endings than by the full event. Those remembered versions can influence what gets repeated—or avoided—later on. SDC includes tools for asking “what is happening and how do you know”, helping to bring more clarity and consistency to future decisions.

Both approaches share a practical aim: to notice mental shortcuts as they arise and recognize when they help and when they need a second look.

Kahneman’s research accurately maps how mental processes work. The SDC Method builds on that research and makes it easier to notice and work with mental processes in real-time, with more steadiness, making it easier to identify choice-points and develop more desirable choices.

For an even closer look, add Dr. Kahneman’s “Thinking Fast and Slow” and his other works to your library today. Find it here in the ChangeWorks Bookstore.

Key Contributions and Concepts

Dual-Process Theories of Thinking

As research on human cognition deepened, it became clear that much of our thinking is shaped by intuitive processes operating below conscious awareness. This insight is central to Daniel Kahneman’s dual-process theory, popularized in Thinking, Fast and Slow (2011).

Kahneman describes two modes of thought: System 1 and System 2:

System 1 is fast, automatic, emotional, and unconscious—handling everyday tasks like face recognition, simple judgments, and habitual behaviors.
System 2 is slow, effortful, logical, and conscious—used for complex reasoning, deliberate decision-making, and self-monitoring.

Although we tend to identify with System 2’s reflective thinking, much of our behavior is governed by the intuitive operations of System 1. Errors often occur when System 1’s quick judgments go uncorrected because System 2 lacks the attention or energy to intervene.

The framework builds on observations that human reasoning often relies on mental shortcuts (heuristics), which can lead to predictable judgment errors. While the idea of mental duality has deep roots (Plato, Aristotle, Spinoza, William James, Freud), modern cognitive science formalized it through empirical research.

Jonathan Evans and Peter Wason advanced dual-process models of reasoning and decision-making in the late 20th century. Keith Stanovich and Richard West later coined System 1 and System 2, providing a clear vocabulary that unified earlier work.

Kahneman, building on decades of collaboration with Amos Tversky and earlier studies on attention and cognitive effort, synthesized these ideas in Thinking, Fast and Slow, making them accessible for a broad audience.

Despite its influence, dual-process theory faces critique: some argue that dividing cognition into just two systems oversimplifies the complexity of thought, which likely involves a spectrum of interacting processes.

Kahneman’s exploration of how fast and slow thinking influence memory and happiness would further deepen this perspective, shifting attention from reasoning to subjective well-being.

Subjective Well-Being and Happiness Research

Extending his work on dual-process thinking, Kahneman explored how intuitive and reflective systems shape how we evaluate happiness and well-being.

He distinguished between two "selves" that process happiness differently:

The experiencing self, which lives in the moment.
The remembering self, which constructs a narrative from those experiences.

The experiencing self tracks real-time feelings, while the remembering self—shaped by intuitive biases—builds memories based on peak moments and endings (the peak-end rule) rather than duration or overall experience.

This leads to the experiencing-remembering gap: a disconnect between what we feel during an event and how we later evaluate it. Kahneman demonstrated this through studies where longer painful experiences with milder endings were remembered more favorably than shorter but consistently painful ones.

These findings challenge utility-based decision models by showing that people often make future choices based on memory—not actual experience. Once again, intuitive cognitive processes shape behavior in ways that may diverge from lived reality.

Kahneman’s collaboration with Tversky also revealed how these intuitive processes influence judgment and decision-making more broadly through the use of mental shortcuts, or heuristics.

Heuristics and Biases

Building on this understanding of fast and slow thinking, Kahneman and Tversky’s heuristics and biases framework examined how System 1’s shortcuts often lead to systematic errors in judgment.

The framework identifies three core heuristics:

Representativeness: judging probability by similarity to a typical case, often ignoring base rates (e.g., assuming a shy, meticulous person is more likely a librarian than a salesperson).
Availability: estimating frequency or likelihood based on how easily examples come to mind, often overweighting vivid or recent events.
Anchoring and adjustment: relying too heavily on an initial reference point (anchor) when making estimates, even if the anchor is arbitrary.

These shortcuts are often practical and efficient, conserving cognitive resources, but they can also produce predictable errors—explaining why human judgment often deviates from statistical principles and rational models.

The framework has wide application. In clinical psychology, it explains cognitive distortions (e.g., availability bias amplifying perceived threat in anxiety). In medicine, awareness of anchoring helps clinicians avoid diagnostic errors. In political communication, vivid examples (leveraging availability) can sway public opinion more than statistics.

Critics, including Gerd Gigerenzer and the ecological rationality tradition, argue that the framework underestimates the adaptive value of heuristics, which often serve us well in real-world environments.

Biography

Daniel Kahneman was born on March 5, 1934, in Tel Aviv, then part of the British Mandate of Palestine, while his mother was visiting family. He spent his early years in Paris, where his family lived—a childhood soon shadowed by the Nazi occupation of France. These experiences, Kahneman later reflected, helped shape his interest in understanding human thought and behavior.

In 1948, following his father's death and just before the founding of Israel, Kahneman relocated to Palestine with his mother and sister. He went on to study at Hebrew University in Jerusalem, earning a degree in psychology with a minor in mathematics in 1954. Early influences included the writings of social psychologist Kurt Lewin and a fascination with neuropsychology .

After graduation, Kahneman served in the psychology unit of the Israeli Defense Forces, where he applied psychological principles to practical problems—an experience that deepened his curiosity about human judgment. He later pursued graduate studies at the University of California, Berkeley, earning a Ph.D. in psychology in 1961 .

Returning to Hebrew University, Kahneman taught there from 1961 to 1978. It was during this period that he began his transformative collaboration with Amos Tversky. Together, they conducted pioneering research on how people make judgments and decisions—work that would reshape not only psychology but also economics and public policy .

Kahneman later held academic posts at the University of British Columbia (1978–1986) and the University of California, Berkeley (1986–1994), before joining Princeton University in 1993, where he served as Eugene Higgins Professor of Psychology and Professor of Public Affairs .

His collaboration with Tversky culminated in the development of prospect theory, which describes how people actually make decisions involving risk and uncertainty. The theory shows that individuals evaluate potential gains and losses relative to a reference point, tend to weigh losses more heavily than equivalent gains (loss aversion), and often rely on mental shortcuts rather than strict logical calculation—challenging classical economic models of rational choice .

In 2002, Kahneman was awarded the Nobel Memorial Prize in Economic Sciences for integrating insights from psychology into economic science—an extraordinary recognition for someone who had never formally studied economics . His work helped lay the foundation for the field now known as behavioral economics.

Beyond academia, Kahneman was a founding partner of the TGG Group, a business and philanthropy consulting firm. His influence extended widely—recognized by Foreign Policy as one of the world’s top thinkers in 2011, and ranked as one of the most influential economists by The Economist in 2015 .

Kahneman was married twice and had two children. His second wife, cognitive psychologist and Royal Society Fellow Anne Treisman, passed away in 2018 .

Until his passing on March 27, 2024, at the age of 90, in Switzerland, Kahneman remained deeply engaged in exploring the workings of the human mind . His ideas—including System 1 and System 2 thinking, prospect theory, and the study of cognitive biases—continue to shape how we understand decision-making in fields as diverse as clinical psychology, public policy, economics, and everyday life. His legacy endures as an invitation to better understand not only how we think, but also how we might think better.

Book Store

Attention and Effort (1973; Academic Press)

This early work explores the allocation of attention and mental effort, laying foundational concepts about cognitive resource management that would later inform his dual-system theory of thinking. The book examines how attentional limitations affect performance and decision-making.

Judgment under Uncertainty: Heuristics and Biases (1974; Science)

This groundbreaking paper with Amos Tversky introduced the concept that people rely on mental shortcuts (heuristics) when making judgments under uncertainty, which can lead to systematic errors.

Prospect Theory: An Analysis of Decision under Risk (1979; Econometrica)

Co-authored with Amos Tversky, this landmark paper presented prospect theory, which describes how people make choices under risk. This work formed the foundation for behavioral economics and was a primary reason for Kahneman's Nobel Prize.

Maps of Bounded Rationality: A Perspective on Intuitive Judgment and Choice (2003; Les Prix Nobel: The Nobel Prizes 2002)

This Nobel Prize lecture summarizes Kahneman's research on judgment and decision-making, presenting an integrated view of his decades of work on how humans form judgments and make choices under conditions of uncertainty.

Thinking, Fast and Slow (2011; Farrar, Straus and Giroux)

This international bestseller synthesizes Kahneman's lifetime of research into an accessible format for general readers. The book explores the two systems that drive the way we think—System 1 (fast, intuitive, emotional) and System 2 (slower, more deliberative, more logical)—and explains how these systems shape our judgments and decisions.

Noise: A Flaw in Human Judgment (2021; Little, Brown Spark)

Co-authored with Olivier Sibony and Cass R. Sunstein, this book examines the concept of "noise"—unwanted variability in judgments that should be identical. Unlike bias, which causes predictable errors, noise causes random, inconsistent ones. The book explores how noise affects decisions in fields including medicine, law, economic forecasting, and offers strategies for reducing this variability to improve decision quality.