KAHNEMAN, Daniel 1934-

PERSONAL:

Born 1934, in Tel Aviv, Palestine (now Israel). Education: Hebrew University, Jerusalem, B.A., 1954; University of California, Ph.D., 1961.

ADDRESSES:

Office—324 Wallace Hall, Woodrow Wilson School, Princeton University, Princeton, NJ 08544. E-mail—[email protected].

CAREER:

Hebrew University, Jerusalem, Israel, taught 1958-73, professor, 1973-78; University of British Columbia, professor, 1978-86; University of California—Berkeley, professor of psychology, 1986-94; Princeton University, Princeton, NJ, professor of psychology and professor of public affairs, 1993—.

MEMBER:

American Psychological Association, Canadian Psychological Association.

AWARDS, HONORS:

Distinguished Scientific Contribution Award, American Psychological Association, 1982; Hilgard Award for Lifetime Contribution to General Psychology, 1995; Warren Medal, Society of Experimental Psychologists, 1995; Nobel Prize in Economic Sciences, Royal Swedish Academy of Sciences, 2002.

WRITINGS:

Attention and Effort, Prentice-Hall (Englewood Cliffs, NJ), 1973.

(Editor, with Paul Slovic and Amos Tversky) Judgment under Uncertainty: Heuristics and Biases, Cambridge University Press (New York, NY), 1982.

(With Jack L. Knetsch and Patricia McNeill) Residential Tenancies: Losses, Fairness, and Regulations, Commission of Inquiry into Residential Tenancies (Toronto, Ontario, Canada), 1984.

(Editor, with Ed Diener and Norbert Schwartz) Well-being: The Foundations of Hedonic Psychology, Russell Sage Foundation (New York, NY), 1999.

(Editor, with Amos Tversky) Choices, Values, and Frames, Russell Sage Foundation (New York, NY), 2000.

(Editor, with Thomas Gilovich and Dale Griffin) Heuristics and Biases: The Psychology of Intuitive Judgement, Cambridge University Press (New York, NY), 2002.

SIDELIGHTS:

It might seem odd that Daniel Kahneman, an expert in psychology, should receive a Nobel Prize in Economic Sciences. But over the years his psychological insights, which introduce the idea of irrational responses into economic decision making, have attracted the attention and respect of economists, and forced them to reevaluate their assumption of "rational agents" in economic theory. With his close friend and colleague, Amos Tversky, who died of cancer in 1996, Kahneman studied aspects of decision making, such as attentiveness, judgment, and biases, that have a definite impact on economic factors, but it took a while for that impact to be felt. As Kahneman told a New York Times reporter, "We certainly didn't have in mind to influence economics. In the first years, economists, and philosophers, too, were simply not interested in the trivial errors that we as psychologists were studying." Those "trivial errors" would eventually earn Kahneman a Nobel Prize.

Born in what was then Palestine, Kahneman spent much of his childhood in France, barely escaping disaster. When Kahneman was six, the Nazis invaded France and the Kahnemans were forced to wear the yellow star that marked them as Jews. His father was arrested and marked for deportation to a death camp, but released because his work as a research chemist was deemed too important to the war effort. The family escaped to Vichy France, where his father died in 1944. Daniel and his mother spent the rest of the war in hiding. In 1946 they returned to his birthplace in the newly formed nation of Israel. He studied psychology and mathematics at Hebrew University, and in 1955 he joined a unit of the Israeli army that was responsible for sorting out recruits. He noticed that many of his colleagues based their estimates of recruits on vague impressions, which led to many false predictions of future success, and developed his own personality assessment questionnaire to force interviewers to think in more concrete terms. After his discharge, he returned to Hebrew University to study logic, and with the support of the university, went on to earn his Ph.D. in psychology at the University of California—Berkeley in 1961.

Kahneman returned to a teaching position at Hebrew University, where he met Amos Tversky, a math whiz with a deep knowledge of probability theory. The two shared a strong interest in heuristics, the short-cuts people use to reach decisions, and began a collaboration that would last until Tversky's death. Their work focused on the ways in which framing a question changes a result, even if the underlying facts remain the same. In one experiment, they asked two sets of subjects to make a choice about a health program in a hypothetical outbreak that would kill 600 people if nothing was done. One group was told that Program A would definitely save 200 lives, whereas Program B had a one-third chance of saving 600 lives and a two-thirds chance of saving no lives. Most of this group chose Program A with its certainty of saving 200 lives. A second group was given the same choice, but with a difference. They were told that Program A would lead to 400 deaths, while Program B had a one-third chance that nobody would die, and a two-thirds chance that 600 would die. Confronted with the certainty of 400 deaths under Program A, most of the second group chose to take a chance with Program B.

The two psychologists codified a number of biases, including the tendency to make big decisions on small samples and the likelihood that something that is easy to recall will lead to overestimation of frequency. In one experiment, they read a list of male and female names to test subjects. Because more of the female names were famous, 81 percent of the subjects thought there were more female names, although there were actually more male names in the list. They even discovered that people's estimates can be influenced by numbers that are obviously irrelevant to the subject at hand. They asked one group to estimate the percentage of African countries in the United Nations. Before each guess, they spun a wheel with numbers from 1 to 100. If a low number came up, the subject was more likely to give a low estimate of African membership, with the opposite result if a high number came up on the wheel. They also discovered a strong tendency toward loss aversion. Instead of being willing to risk $100 to win $100, as many economists assume, most people apparently need the prospect of winning at least $200 before they'll wager $100.

In 1982, Kahneman and Tversky, with Paul Slovic, edited Judgment under Uncertainty: Heuristics and Biases to bring together some of the leading contributions in their specialty. The thirty-five papers, mostly reprints, revealed more than the fact that people often make judgments that deviate from reality. They revealed systematic, predictable biases that could be studied, and often corrected through training. Such factors as overconfidence and a false sense of control, as when people can pick their own lottery numbers rather than let a machine do it, often lead people astray. A number of reviewers noted the book's applicability to many fields. J. Frank Yates noted in Contemporary Psychology, "Clearly this is an important book. Anyone who undertakes judgment and decision research should own it. Indeed, individuals from all branches of psychology, as well as other professionals, whose work involves major elements of judgment, will find these papers thought provoking and potentially of great value." "The work summarized in this book has been and will continue to be influential both for studies of human behavior and for those concerned with public policy. It should be of interest to psychologists, economists, and political scientists and in several fields in business schools," concluded Science contributor David M. Grether.

In recent years, Kahneman has expanded his interests to include the question of what makes human beings happy. In Well-being: The Foundations of Hedonic Psychology, Kahneman and his coeditors introduced a new psychological discipline, hedonics psychology, the study of what makes life pleasant or unpleasant. The essays cover personal and social factors, both in the workplace and in private life, and the influence of such factors as mood, emotion, anticipation, and desire. The first section covers the ways in which these seemingly nebulous factors can actually be measured, with subsequent sections on factors such as the difference between mood and emotion, cross-cultural variations, and the individual abnormalities. For Kyklos reviewer Bruno Frey, "This book is indispensable for anyone conducting serious inquiries into the subject. Economists, in particular, find a handy presentation of the state of psychological research on human well-being." "This volume is a major reference work in the field of well-being and I am sure it will have a long 'half-life,'" predicted Contemporary Psychology reviewer Ursula Staudinger.

Daniel Kahneman has remained an intensely active contributor in the fields of psychology and economics. Heuristics and Biases: The Psychology of Intuitive Judgement, published in 2002, provides an update to the classic work published twenty years earlier, and illustrates Kahneman's continued interest in preventing people from undermining their own prospects for success and happiness.

BIOGRAPHICAL AND CRITICAL SOURCES:

PERIODICALS

Contemporary Psychology, December, 2001, J. Frank Yates, "Anticipating the Unknown: How and How Well," pp. 181-183, December, 2001, Ursula Staudinger, "More Than Pleasure? Toward a Psychology of Growth and Strength?," pp. 552-554.

Kyklos, fall, 2000, Bruno Frey, review of Well-being: The Foundations of Hedonic Psychology, pp. 407-408.

New York Times, November 5, 2002, Erica Goode, "On Profit, Loss and the Mysteries of the Mind," pp. D1, D6.

Science, December 24, 1982, David M. Grether, "Inference in Practice," pp. 1300-1301.*