Daniel Kahneman’s Thinking Fast And Slow shows you how two systems in your brain are constantly fighting over control of your behavior and actions. It also shows you the many ways in which this leads to errors in memory, judgment, and decisions, and what you can do about it. When system 1 faces a tough problem it can’t solve, it’ll call system 2 into action to work out the details. System 1 thinks it can handle it, even though it actually can’t, and you end up making a mistake. The law of least effort states that your brain uses the minimum amount of energy for each task it can get away with.
So when it seems system 1 can handle things, it won’t activate system 2. This leads you to not use all of your IQ points, so our brain limits our intelligence by being lazy. The homo oeconomicus, the man (or woman) who only acts based on rational thinking, first introduced by John Stuart Mill, doesn’t quite resemble us. Milton Friedman’s research on economics built the foundation of today’s work in the field. Just knowing your emotions try to confuse you when it’s time to talk about money will help you make better decisions. Don’t let emotions get in the way where they have no business.
Random Citizen 