Dr. Kahneman’s research was best known for debunking the notion of “homo economicus,” the “economic man” who since the epoch of Adam Smith was considered a rational being who acts out of self-interest. Instead, Dr. Kahneman found, people rely on intellectual shortcuts that often lead to wrongheaded decisions that go against their own best interest.
These misguided decisions occur because humans “are much too influenced by recent events,” Dr. Kahneman once said. “They are much too quick to jump to conclusions under some conditions and, under other conditions, they are much too slow to change.”
Dr. Kahneman was affiliated with Princeton University when he shared the 2002 Nobel Memorial Prize in Economic Sciences “for having integrated insights from psychological research into economic science, especially concerning human judgment and decision-making under uncertainty.” His co-recipient, Vernon L. Smith, then of George Mason University in Virginia, pioneered the use of laboratory experiments in economics.
Dr. Kahneman took a dim view of people’s ability to think their way through a problem. “Many people are overconfident, prone to place too much faith in their intuitions,” he wrote in his popular 2011 book “Thinking, Fast and Slow.” “They apparently find cognitive effort at least mildly unpleasant and avoid it as much as possible.”
Dr. Kahneman spent much of his career working alongside psychologist Amos Tversky, who he said deserved much of the credit for their prizewinning work. But Tversky died in 1996, and the Nobel is never awarded posthumously.
Both men were atheist grandsons of Lithuanian rabbis, and both had studied and lectured at the Hebrew University of Jerusalem. Their three-decade friendship and close collaboration, chronicled in Michael Lewis’s 2016 book “The Undoing Project,” was a study in opposites.
According to Lewis, Tversky was the life of the party; Dr. Kahneman never even went. Tversky had a mechanical pencil on his desk and nothing else; Dr. Kahneman’s office was full of books and articles he never finished. Still, Dr. Kahneman said, at times it was as if “we were sharing a mind.” They worked so closely together that they tossed a coin to decide whose name would go first on an article or a book.
Their research helped establish the field of behavioral economics, which applies psychological insights to the study of economic decision-making, but also had a far-reaching effect outside the academy. It was credited with changing the way baseball scouts evaluate prospects, governments make public policy and doctors arrive at medical diagnoses.
Inspired in part by “Judgments Under Uncertainty,” an early paper by Dr. Kahneman and Tversky, economist Richard Thaler and legal scholar Cass Sunstein developed the concept of “libertarian paternalism.” Thaler and Sunstein’s 2008 book, “Nudge,” suggested ways that governments could encourage people to save for retirement, take care of their health and make other intelligent choices with minimal intrusion by authorities.
Dr. Kahneman presented his ideas to a general audience in “Thinking, Fast and Slow,” which distinguished between two modes of thought: System 1, in which the mind, acting quickly, relies on intuition, immediate impressions and emotional reactions; and System 2, in which the mind, slowing down, functions more rationally and analytically and is able to correct errors made by System 1.
Much of the time, Dr. Kahneman argued, the mind works in System 1 and draws…
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