Concepts of Thinking Fast/Thinking Slow Model

Thinking Fast/Slow Model
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Thinking Fast/Slow Model
Kahneman's think fast/slow model focuses on how intuition and slow thinking influence our judgment. It also gives insights into how we can effectively utilize both. According to Kahneman (2011), people use intuition in situations that require fast thinking. In essence, system 1 (intuition) can help people communicate in situations requiring quick thinking and response. However, the system is prone to failure since people act on the spur of the moment and without much thought. On the flip side, system 2 takes time and deliberation. Organizations that apply this system can solve complex issues, and they perform optimally. In addition, leaders who use system 1 tend to make rash decisions that could be counterproductive. Conversely, leaders who apply system 2, like Warren Buffett, make informed and popular decisions.
System 1, which involves fast thinking, does not seem to be in Warren Buffett’s good books. He does not do things on the spur of the moment but takes his time. He does not take a swing of the bat (invest) unless the opportunity appears foolproof (Gates, 1996). Warren implicitly alludes to the fact that relying on details instead of exper...