Thinking, Fast and Slow by

An insightful and friendly guidebook by the esteemed author, Daniel Kahneman. With his engaging storytelling style, he takes us on a journey through the fascinating realm of our minds, unraveling the mysteries of decision-making and offering practical wisdom that can be applied to all aspects of our lives.

3 Most Important Lessons:

Lesson 1: The Two Systems of Thinking

In "Thinking, Fast and Slow," Daniel Kahneman introduces the concept of two distinct systems of thinking: System 1 (fast, intuitive, and automatic) and System 2 (slow, deliberate, and effortful). The key lesson is understanding the limitations and biases of these systems.

System 1 operates automatically and effortlessly, relying on heuristics and shortcuts to make quick judgments. It is efficient but prone to biases and errors. On the other hand, System 2 requires conscious effort and analytical thinking. It is slower but more accurate and rational.

Kahneman explains, "System 1 is designed to jump to conclusions, often wrong, but often close enough to be useful. Its main function is to maintain and update the model of your personal world, which represents what is normal in it."

System 1 thinking is essential for our everyday functioning, allowing us to make quick decisions without conscious effort. However, it is susceptible to biases such as confirmation bias, availability bias, and overconfidence. By recognizing these inherent limitations, we can consciously engage System 2 thinking to question our intuitions, analyze situations more thoroughly, and make more rational decisions.

Lesson 2: The Power of Anchoring

Anchoring is a cognitive bias where our judgments are influenced by an initial reference point. Kahneman explains the significance of anchoring and its impact on decision-making.

He states, "Anchoring is a cognitive bias that occurs when people rely too heavily on the first piece of information they are given when making decisions." Anchoring can occur in various contexts, from pricing products to negotiating salaries. For example, when presented with a high initial price for a product, individuals tend to perceive subsequent prices as reasonable even if they are still higher than the market value. This bias can lead to poor judgments and financial losses.

Anchoring can heavily influence our judgments, even when the anchor is irrelevant or arbitrary. By being aware of this bias, we can actively seek out additional information, challenge our initial assumptions, and consider a wider range of possibilities. This helps us make more accurate and unbiased decisions.

Lesson 3: The Illusion of Understanding

Kahneman introduces the concept of the "illusion of understanding," where individuals overestimate their understanding of complex phenomena. This illusion can lead to overconfidence and poor decision-making. He explains, "The illusion of understanding is associated with a failure to acknowledge the full extent of our ignorance and the uncertainty of the world we live in."

This illusion often arises when we encounter complex systems, such as financial markets or human behavior. We tend to create coherent narratives and explanations, even when the reality is much more unpredictable and uncertain. This illusion can hinder our ability to adapt to new information and make informed decisions.

Recognizing the limitations of our understanding is crucial to avoid making faulty assumptions. Embracing humility and acknowledging uncertainty allows for a more open-minded and adaptable approach to decision-making. By accepting that our knowledge is limited, we become more receptive to alternative viewpoints and information, leading to better decision outcomes.

3 Practical Applications:

Application 1: Take Time for Deliberate Thinking

Given the limitations of System 1 thinking, it is essential to allocate time for deliberate thinking. When facing important decisions, consciously engage System 2 thinking to analyze the situation, gather relevant information, and consider alternative perspectives.

For example, if you are considering a career change, instead of relying solely on initial impressions or gut feelings, take the time to research the industry, talk to professionals in the field, and weigh the pros and cons. By using deliberate thinking, you can make a more informed and thoughtful decision.

Application 2: Challenge Anchors and Biases

When making decisions, be mindful of anchoring biases. Seek out multiple perspectives, gather diverse information, and consider a range of possibilities before settling on a judgment. By actively challenging anchors, you can prevent them from unduly influencing your decisions.

For instance, when negotiating a salary, instead of accepting the initial offer as the anchor, do thorough research on industry standards and salary ranges. This allows you to negotiate from an informed standpoint and avoid being overly swayed by the initial figure.

Application 3: Embrace Uncertainty and Continuous Learning

Recognize the illusion of understanding and embrace uncertainty. Foster a growth mindset that acknowledges the limits of your knowledge and actively seeks new information and perspectives. Embracing continuous learning allows for greater adaptability and better decision-making.

For example, if you are a business owner, instead of assuming you understand your target market completely, constantly seek feedback, conduct market research, and adapt your strategies based on new information. By embracing uncertainty and continuous learning, you can stay ahead of market trends and make more informed business decisions.

3 Reverse Thinking Notes:

Note 1: What if we solely rely on System 1 thinking?

Relying solely on System 1 thinking can lead to hasty decisions and cognitive biases. For example, if we impulsively make investment decisions based on our intuition without careful analysis, we may fall victim to biases like overconfidence or anchoring. This can result in financial losses and missed opportunities for growth.

Imagine a scenario where an investor, Minh, solely relies on his intuition and System 1 thinking to make investment decisions. He hears about a new tech company and, based on a gut feeling, decides to invest a significant amount of money without conducting thorough research or considering potential risks. Unfortunately, the company faces unforeseen challenges, and Minh's investment plummets. By disregarding deliberate thinking and solely relying on intuition, Minh suffers significant financial losses.

Note 2: What if we disregard anchors completely?

While anchors can lead to biases, completely disregarding them may result in overlooking valuable information. For instance, if we ignore market trends and historical data while pricing a product, we may miss out on setting an optimal price point and lose potential customers.

Consider a business owner, Linh, who decides to launch a new product without considering any anchors or market research. She sets the price completely based on her intuition and personal preference, without considering factors like production costs or customer expectations. As a result, the product is priced significantly higher than similar offerings in the market, leading to poor sales and customer dissatisfaction. By disregarding anchors completely, Linh misses out on valuable information and fails to align her pricing strategy with market realities.

Note 3: What if we overestimate our understanding?

Overestimating our understanding can lead to hubris and closed-mindedness. If we believe we have a complete understanding of a subject, we might dismiss alternative perspectives and miss out on valuable insights. This can hinder personal growth and limit our ability to make well-informed decisions.

Imagine a manager, Nguyen, who believes they have a thorough understanding of their team's dynamics and needs. Due to this overestimation, Nguyen fails to actively seek feedback or consider alternative viewpoints. As a result, the team's morale declines, and productivity suffers. By overestimating their understanding, Nguyen misses out on valuable insights from team members and hinders the team's overall performance.

3 Other Important Books:

"Influence: The Psychology of Persuasion" by Robert Cialdini - This classic explores the principles of persuasion and how they influence our decision-making. Understanding these principles can help us navigate the biases and influences that shape our choices.

"Predictably Irrational" by Dan Ariely - Ariely delves into the irrational behaviors that shape our choices and provides insights into decision-making processes. This book sheds light on the subconscious factors that influence our decisions and helps us make more informed choices.

"Nudge: Improving Decisions About Health, Wealth, and Happiness" by Richard H. Thaler and Cass R. Sunstein - This book explores how small nudges and subtle changes in decision environments can significantly impact our choices. It offers practical strategies for designing better decision-making contexts that align with our desired outcomes.

English Section:

Anchoring: A cognitive bias where judgments are influenced by an initial reference point.

Heuristics: Mental shortcuts or rules of thumb used in decision-making.

Illusion of understanding: Overestimating one's comprehension or knowledge of a complex phenomenon.

Biases: Systematic deviations from rationality in judgment or decision-making.

Hubris: Excessive pride or self-confidence.

Closed-mindedness: Unwillingness to consider alternative viewpoints or ideas.

Optimal: The best or most favorable outcome.

Persuasion: The act of influencing someone to change their beliefs, attitudes, or behaviors.

Cognitive: Relating to the process of acquiring knowledge and understanding through thought, experience, and senses.

Fallacy: A mistaken belief or flawed reasoning.

Happy reading.

High standard, low expectation

Một lần trong buổi one on one, một bạn nhân viên tâm sự (than thở) với mình về các vấn đề bạn đang có: như là trưởng phòng A đang không tốt cái này, chị kế toán nên thay đổi cái nọ, bạn đồng nghiệp nên support hơn hay công ty nên có quy trình cho tất cả mọi thứ để rõ ràng, và rồi bạn cũng than về thời tiết, xã hội, quy định pháp luật.. và hầu như là cái gì bạn cũng có ý kiến để thay đổi tốt hơn. Mình nghe xong rồi bảo: good, em có nhiều quan sát thật thú vị, cơ mà anh chỉ mới nghe về việc người khác hay việc khác thay đổi và cải thiện, còn em thì sao, em có thể làm gì từ bản thân mình để vấn đề cải thiện không? Vì nếu là vấn đề thì nó thường bao gồm và không phát sinh từ một phía đúng không?

Đúng là trong công việc và cuộc sống có nhiều khó khăn và vấn đề, tuy nhiên đóng vai là nạn nhân thì luôn không phải là giải pháp tốt. Cuộc sống sẽ trở nên khó khăn hơn rất nhiều nếu chúng ta có quá nhiều mong đợi và phụ thuộc vào người khác hay thế giới bên ngoài thay vì bản thân chúng ta. Ngược lại, cuộc sống sẽ trở nên tốt hơn rất nhiều nếu chúng ta có thể phụ thuộc và mong đợi nhiều thứ hơn từ chính bản thân chúng ta thay vì từ thế giới bên ngoài.

Phụ thuộc và mong đợi từ chính bản thân chúng ta gọi là tiêu chuẩn (standard), mong muốn từ thế giới bên ngoài gọi là expectation. High standard và low expectation sẽ làm cho cuộc sống và mọi việc tốt hơn chứ không phải ngược lại, nhớ nhé.

Atomic Habits: An Easy & Proven Way to Build Good Habits & Break Bad Ones by James Clear

Discover the power of small habits, receive practical strategies, and be inspired to unleash your full potential.

3 Most Important Lessons from the Book:

1. The Power of Tiny Habits:

One of the key lessons from "Atomic Habits" is the idea that small, incremental changes can lead to remarkable results over time. James Clear explains, "Habits are the compound interest of self-improvement. The effects of your habits multiply as you repeat them. They seem to make little difference on any given day and yet the impact they deliver over the months and years can be enormous." This highlights the significance of focusing on small daily actions that, when compounded, can lead to significant transformation.

Clear goes on to say, "The most powerful outcomes are delayed. And this is one of the reasons why habits are so important. They can help us delay gratification and sustain effort over time, even when results aren't immediately apparent."

2. The Role of Identity in Habit Formation:

Clear emphasizes the need to focus on identity-based habits rather than solely on outcome-based goals. He states, "The ultimate form of intrinsic motivation is when a habit becomes part of your identity. It's one thing to say I'm the type of person who wants this. It's something very different to say I'm the type of person who is this."

By shifting our focus to becoming the type of person who embodies the desired habits, we create a stronger foundation for lasting change. Clear explains, "The goal is not to read a book, the goal is to become a reader. The goal is not to run a marathon, the goal is to become a runner. The goal is not to learn an instrument, the goal is to become a musician."

3. The Four Laws of Behavior Change:

In the book, Clear introduces the "Four Laws of Behavior Change" as a framework for creating and sustaining habits. These laws include making habits obvious, attractive, easy, and satisfying. By applying these laws, we can set up an environment that supports positive habits and makes it easier to break bad ones.

Clear explains, "The most effective way to change your habits is to focus not on what you want to achieve, but on who you wish to become." By making our desired habits obvious and attractive, while also reducing friction and making them easy to perform, we increase the chances of successfully adopting and maintaining them. Additionally, making habits satisfying by providing immediate rewards or positive reinforcement increases the likelihood of habit repetition.

3 Practical Applications:

1. Start with Micro-Habits:

Instead of overwhelming yourself with big goals, start with small, manageable habits. For example, if you want to start exercising regularly, begin with a simple habit like doing five minutes of stretching every morning. Over time, you can gradually increase the duration and intensity of your workouts. This approach helps to build momentum and makes it easier to stick to the habit.

Practical Application:

If you want to develop a daily writing habit, start with committing to writing just one sentence every day. The key is to make the habit so small and easy that it becomes impossible to say no. Once you establish the habit, you can gradually increase the amount of writing you do each day.

2. Design Your Environment:

Take a critical look at your environment and make adjustments to support your desired habits. If you want to read more, create a designated reading area with comfortable seating and minimal distractions. If you want to eat healthier, stock your kitchen with nutritious foods and remove tempting snacks. By designing your environment to align with your goals, you are setting yourself up for success.

Practical Application:

To cultivate a habit of mindfulness or meditation, create a tranquil space in your home dedicated to this practice. Fill it with items that promote relaxation, such as cushions, candles, or plants. This environment will serve as a visual reminder and make it easier for you to engage in the habit consistently.

2. Create an Identity Statement:

Craft an identity statement that aligns with the habits you want to develop. For example, if you want to become a more disciplined person, you could say, "I am a disciplined individual who consistently follows through on my commitments." By repeating this identity statement to yourself daily, you reinforce your desired identity and reinforce the habits associated with it.

Practical Application:

If you want to become a more organized person, create an identity statement such as, "I am a highly organized individual who maintains a clutter-free environment." Repeat this statement to yourself every day and visualize yourself embodying this identity. This will help you internalize the habit of organization and make it a part of your identity.

3 Reverse Thinking Notes:

1. Ignoring Habits:

If we ignore the power of habits and fail to make intentional changes, we may find ourselves stuck in unproductive cycles. For instance, if we continuously hit the snooze button and neglect to establish a morning routine, we may struggle with productivity and feel rushed throughout the day. Ignoring the impact of habits can lead to missed opportunities for growth and improvement.

Imagine a person who consistently procrastinates and avoids taking action on their goals. They may convince themselves that their lack of progress is due to external factors, rather than acknowledging the role of their habits. By continuing to ignore the power of habits, they miss out on the opportunity to make small changes that could have a significant impact on their life.

2. Neglecting Identity:

If we neglect the importance of identity in habit formation, we may struggle to make lasting changes. Instead of focusing on becoming the type of person who embodies the desired habits, we may solely rely on setting outcome-based goals. This can lead to a lack of motivation and a higher likelihood of abandoning our efforts.

Consider someone who sets a goal to lose weight but doesn't address their identity as someone who values health and fitness. Without aligning their habits with their identity, they may find it difficult to sustain the necessary actions for long-term weight loss. Neglecting identity can result in a constant battle between willpower and old habits.

3. Disregarding Environment:

If we disregard the impact of our environment on our habits, we may struggle to create an environment that supports positive change. Without intentionally designing our environment to make desired habits obvious, attractive, and easy, we may face unnecessary obstacles and temptations that derail our progress.

Imagine someone who wants to eat healthier but keeps a pantry stocked with unhealthy snacks and conveniently located fast-food restaurants near their workplace. By failing to consider the influence of their environment, they make it much harder to make healthier food choices. Disregarding the environment can make it challenging to break free from old habits and establish new ones.

3 Other Important and Relevant Books:

1. "The Power of Habit: Why We Do What We Do in Life and Business" by Charles Duhigg: This classic book explores the science behind habit formation and provides valuable insights into how habits shape our lives. Duhigg delves into the neurological processes that drive habitual behavior and offers practical strategies for changing and leveraging habits.

2. "Tiny Habits: The Small Changes That Change Everything" by BJ Fogg: In this book, Fogg introduces his method of behavior change called "Tiny Habits." He emphasizes the power of starting small and provides a framework for creating sustainable habits. Fogg's approach aligns well with the principles discussed in "Atomic Habits," making it a valuable companion read.

3. "Deep Work: Rules for Focused Success in a Distracted World" by Cal Newport: This book explores the importance of deep, focused work in a world filled with distractions. Newport provides strategies for cultivating a deep work habit and maximizing productivity. By combining the principles of "Atomic Habits" with the ability to create focused work habits, readers can enhance their overall effectiveness.

English Section:

Incremental - gradually increasing or adding small amounts over time.

Transformation - a thorough or dramatic change in form or appearance.

Foundation - the underlying basis or groundwork for something.

Intrinsic - belonging naturally; essential.

Momentum - the impetus gained by a moving object.

Friction - the resistance encountered when one body moves relative to another.

Reinforcement - the process of strengthening a behavior by providing a reward or consequence.

Align - to bring into coordination or agreement with a particular group or cause.

Obvious - easily perceived or understood.

Temptation - the desire to do or have something that is often regarded as wrong or unwise.

Happy reading.