Daniel Kahneman

Daniel Kahneman (; ; March 5, 1934 – March 27, 2024) was an Israeli-American psychologist best known 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 together with Vernon L. Smith. Kahneman's published empirical findings challenge the assumption of human rationality prevailing in modern economic theory. Kahneman became known as the "grandfather of behavioral economics."

With Amos Tversky and others, Kahneman established a cognitive basis for common human errors that arise from heuristics and biases, and developed prospect theory. In 2011, Kahneman was named by Foreign Policy magazine in its list of top global thinkers. In 2015, The Economist listed him as the seventh most influential economist in the world.

Kahneman was professor emeritus of psychology and public affairs at Princeton University's Princeton School of Public and International Affairs. Kahneman was a founding partner of TGG Group, a business and philanthropy consulting company. He was married to cognitive psychologist and Royal Society Fellow Anne Treisman, who died in 2018. His parents were Lithuanian Jews who had emigrated to France in the early 1920s; The family was on the run for the remainder of the war but survived except for Efrayim who died of diabetes in 1944. Kahneman was average in mathematics, but he thrived in psychology. Kahneman was led to psychology when he discovered in his teens that he was more interested in why people believe in God than in whether God exists, and more interested in indignation than in ethics.

In 1958, he went to the United States to study for his PhD in Psychology at the University of California, Berkeley. His 1961 dissertation, advised by Susan Ervin, examined relations between adjectives in the semantic differential and allowed him to "engage in two of [his] favorite pursuits: the analysis of complex correlational structures and FORTRAN programming". From 1965 to 1966, he was a visiting scientist at the University of Michigan, a fellow at the Center for Cognitive Studies and a lecturer in cognitive psychology at Harvard University in 1966 to 1967, and during the summers of 1968 and 1969 he was a visiting scientist at the Applied Psychology Research Unit in Cambridge. His work on attention led to a book, Attention and Effort, in which he presented a theory of effort based on studies of pupillary changes during mental tasks. Kahneman also developed rules of counterfactual thinking, and published "Norm Theory" with Dale Miller.

Judgment and decision-making

Kahneman's lengthy collaboration with Amos Tversky began in 1969, after Tversky gave a guest lecture at one of Kahneman's seminars at Hebrew University. Their article "Judgment Under Uncertainty: Heuristics and Biases" introduced the notion of anchoring. Kahneman and Tversky spent an entire year at an office in the Van Leer Institute in Jerusalem, writing this paper. They spent more than three years revising an early version of prospect theory that was completed in early 1975. The final version was published in 1979 in Econometrica, the leading economic journal at the time. In the introduction of Thinking, Fast and Slow, Kahneman acknowledges and shares that "our collaboration on judgment and decision making was the reason for the Nobel Prize that I received in 2002, which Amos Tversky would have shared had he not died, aged fifty-nine, in 1996". Kahneman left Hebrew University in 1978 to take a position at the University of British Columbia.

The Harvard psychologist and author Daniel Gilbert said of Kahneman that: "His central message could not be more important, namely, that human reason left to its own devices is apt to engage in a number of fallacies and systematic errors, so if we want to make better decisions in our personal lives and as a society, we ought to be aware of these biases and seek workarounds. That's a powerful and important discovery." Richard Thaler was a visiting professor at the Stanford branch of the National Bureau of Economic Research during that same year. Together with Kahneman's friend Jack Knetsch they worked on two papers on fairness and on the endowment effect.

From 1979 to 1986, Kahneman published multiple articles and chapters. Kahneman published one chapter during the years 1987 to 1989. A few papers on decision making appeared after that hiatus, notably cumulative prospect theory, and an explanation of risk-taking by unrealistic "bold forecasts", but the focus of Kahneman's research from that time was the study of subjective experience.

Variants of utility

Economists distinguish experienced utility—in the sense of Jeremy Bentham and utilitarianism—from decision utility, which is the utility explained by and derived from choices. The experienced utility of an episode is formalized as the temporal integration of momentary utility. is the predicted experienced utility for a future experience. Remembered utility is the evaluation of a past experience. For example, the memory of a painful colonoscopy is improved if the examination is extended by three minutes in which the scope is still inside but not moved anymore, resulting in a moderately uncomfortable sensation. This extended colonoscopy, despite involving more pain overall, is remembered less negatively due to the reduced pain at the end. This even increases the likelihood for the patient to return for subsequent procedures.

Happiness and life satisfaction

The analysis of the experienced utility of short episodes readily extends to the broader notion of happiness. This connection led Kahneman, together with Ed Diener and Norbert Schwarz to organize a workshop, which yielded a book that covered a range of topics in hedonic psychology, which they defined as "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.

Kahneman initially believed that the happiness of the experiencing self is the true measure of well-being. Around 2000, he assembled a team consisting of Alan Krueger, David Schkade, Norbert Schwarz and Arthur Stone. The mission of the team was to create a measure of experienced happiness that economists could take seriously. As a more practical substitute to the experience sampling techniques of the time, the team developed The Day-Reconstruction Method, in which participants described the day as a sequence of episodes, and rated the experience on several affective dimensions. Kahneman also participated in the formulation of the well-being module of the Gallup World Poll. The effort to measure experienced happiness was only partly successful. Measures of affect are routinely included in well-being questionnaires, but the idea that experienced happiness is the better concept did not hold. Kahneman defined happiness in terms of "what I experience here and now", but says that in reality humans pursue life satisfaction, which "is connected to a large degree to social yardsticks—achieving goals, meeting expectations".

The focusing illusion

With David Schkade, Kahneman developed the notion of the focusing illusion 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). In what has been considered his most famous dictum, Kahneman described the illusion in Thinking, Fast and Slow, writing: "Nothing in life is as important as you think it is when you are thinking about it." Thereafter, Kahneman was a senior scholar and faculty member emeritus at Princeton University's Department of Psychology and Princeton School of Public and International Affairs. He was also a fellow at Hebrew University and a Gallup Senior Scientist.

Kahneman and Tversky first crossed paths in the psychology department at the Hebrew University of Jerusalem in 1968. In the period between 1971 and 1979 they published work on judgment and decision-making that led to Kahneman winning the Nobel Prize. leading Kahneman to say, "I eventually divorced him". However, they would continue to publish together until the end of Tversky's life, and worked together on the introduction to an edited collection of papers related to their work during the last six month's of Tversky's life. Behavioural economist Richard Thaler said Kahneman's work was "one of the most important accomplishments of 20th century science," and added, "It's hard to think of any psychologist whose work has influenced so many different fields". Kahneman and Tversky were "the founders of our field", said Ulrike Malmendier, a behavioral economist and member of the German official council of economic experts.

Personal life

Kahneman married his first wife, Irah Kahn, when they were students; they had two children. The couple later divorced. His son Michael, has schizophrenia. Kahneman was quoted as saying that Michael "would have been a very brilliant economist." From 2020, Kahneman lived in New York City with Barbara Tversky, also a cognitive psychologist, and the widow of his long-time collaborator Amos Tversky.

Death

Kahneman died on March 27, 2024, three weeks after his 90th birthday. Given his personal experience with dementia, from which his wife Anne Treisman had suffered, Kahneman received assistance in dying from the Swiss organization Pegasos, and died in the municipality of Nunningen, Switzerland. The manner and location of his death were only revealed in March 2025.

Awards and recognition

In 1982, he received (joint with Amos Tversky), the Award for Distinguished Scientific Contributions from the American Psychological Association
In 1992, he received the Distinguished Scientific Contribution Award from the Society for Consumer Psychology
In 1995, he was selected for the Hilgard Award for Lifetime Contributions to General Psychology
In 1995, he received (joint with Amos Tversky), the Warren Medal of the Society of Experimental Psychologists
In 2001, he was elected a member of the National Academy of Sciences
In 2002, Kahneman received the Nobel Memorial Prize in Economic Sciences, despite being a research psychologist, for his work in prospect theory. Kahneman stated 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.
In 2004, he was elected a member of the American Philosophical Society.
In 2005, he received the Decision Analysis Publication Award (for best paper published in 2003) by the Decision Analysis Society
In 2006, he received the Kampe de Feriet Award from the Society for Information Processing and Management of Uncertainty
In 2006, he received the Thomas Schelling Prize for intellectual contribution to public policy through the Kennedy School for Public Policy, Harvard University
In 2006, he received (joint with Amos Tversky) the Frank P. Ramsey Medal of the Decision Analysis Society
In 2007, he was presented with the American Psychological Association's Award for Outstanding Lifetime Contributions to Psychology.
In 2008, Kahneman was elected to be a Corresponding Fellow at the British Academy
In 2010, he received the Tufts University, Leontief Prize
In 2011, he became a Distinguished Fellow of The American Economic Association
In both 2011 and 2012, he made the Bloomberg 50 most influential people in global finance.
His book Thinking, Fast and Slow was the winner of the 2011 Los Angeles Times Book Award for Current Interest
In 2012, he was accepted as corresponding academician at the Real Academia Española (Economic and Financial Sciences).
In 2013, he received the SAGE-CASBS Award for Social Science
On August 8, 2013, President Barack Obama announced that Daniel Kahneman would be a recipient of the Presidential Medal of Freedom.
In December 2018, Kahneman was named a Gold Medal Honoree by The National Institute of Social Sciences.
In 2015, The Economist listed him as the seventh most influential economist in the world.
In 2019, Kahneman received the Golden Plate Award of the American Academy of Achievement.
In 2023, he was presented with the Helen Dinerman Award of the World Association for Public Opinion Research

Honorary degrees

2001, University of Pennsylvania
2002, University of Trento
2003, The New School
2003, Ben-Gurion University of the Negev
2004, Harvard University
2004, The University of East Anglia
2004, University of British Columbia
2005, University of Milan
2006, Université de Paris I
2006, University of Alberta
2007, University of Rome La Sapienza
2009, Erasmus University
2009, Georgetown University
2010, University of Michigan
2011, Carnegie-Mellon University
2013, Icahn School of Medicine at Mount Sinai
2013, Cambridge University
2014, The Hebrew University of Jerusalem
2014, Yale University
2015, McGill University
2016, Stellenbosch University
2016, University of Haifa
2021, HEC Paris
2023, York University

Notable contributions

Anchoring-and-adjusting
Attribute substitution
Availability heuristic
Base rate fallacy
Cognitive bias
Conjunction fallacy
Dictator game
Framing (social sciences)
Loss aversion
Optimism bias
Peak–end rule
Planning fallacy
Prospect theory
Cumulative prospect theory
Representativeness heuristic
Simulation heuristic
Status quo bias

Books

(Reviewed by Freeman Dyson in The New York Review of Books, December 22, 2011, pp. 40–44)

References

External links

including the Nobel Lecture "Maps of Bounded Rationality"
Wenglinsky, Martin. Kahneman's Fallacies, Thinking, Fast and Slow. January 23, 2017
Remembering Daniel Kahneman: A Mosaic of Memories and Lessons at Behavioral Scientist, April 11, 2024

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