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Daniel Kahneman, the Nobel Prize-winning psychologist who helped debunk the notion that people tend to make rational economic decisions, has died.
His research into the psychology of judgment showed how people often make decisions that do not involve a significant amount of analysis, instead pursuing a course of action on the basis of instinct.
Kahneman, who was 90, rose to prominence in 2002 after he was awarded a share of that year’s Nobel Prize in Economic Sciences for his work on “integrating insights from psychological research into economic science, especially concerning human judgment and decision-making under uncertainty”.
The Israeli-American’s experiments in the field of cognitive psychology undermined the concept of homo economicus, an archetype that has been relied on to form the basis of economic models but is seldom seen in reality.
His work, which was often developed with his longtime collaborator Amos Tversky, formed the basis of a bestselling book, Thinking Fast and Slow, published in 2011. The work categorised thinking into two systems — the first quicker and more emotional, the second more logical.
Through experiments, often measuring changes in pupil size to gauge emotional arousal, Kahneman was able to show that people often defaulted to an emotional outlook, leading to the creation of substantial biases.
“People prefer their sources of information to be highly correlated,” Kahneman said during a lunch with the Financial Times. “Then all the messages you get are consistent with each other and you’re comfortable.”
Kahneman did not believe that his work demonstrated human irrationality, preferring to describe these biases in decision-making that his research showed as only refuting “an unrealistic conception of reality”.
Though he never described himself as an economist, his findings were used by practitioners of behavioural economics, in particular Richard Thaler.
Kahneman was born in Tel Aviv in 1934, but spent much of his early years in France, where his father worked as chief of research in a chemicals factory. His father died in 1944, but his family moved to Palestine after the second world war.
He moved to the US in 1958 to begin a doctorate in psychology at the University of California Berkeley, before setting up a laboratory in Jerusalem in the early 1960s to measure people’s reactions to questions that he posed to them.
He met Tversky, an Israeli cognitive psychologist, later in the decade, and the two psychologists became close friends and collaborators until the latter’s death in 1996, an event Kahneman said had left “a large Amos-shaped gap in the mosaic [that] will not be filled”.
Their collaboration with Thaler, which he described as “the second most important professional friendship of my life”, began in the late 1970s.
“I was so lucky to be able to have Danny Kahneman as a best friend and collaborator for decades,” Thaler said in a post on X on Thursday. “He usually ended our conversations with ‘to be continued . . . ’ but I now have to simulate his part which is impossible.”
Kahneman returned to North America in 1978 to take up roles at the University of British Columbia and then Berkeley.
Kahneman’s death was confirmed by Princeton University, where he had worked since 1993. His most recent role was as a professor of psychology and public affairs at the university’s school of public and international affairs.
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