Post No.: 0057
In the context of psychology, and first coined by behavioural economists Daniel Kahneman and Amos Tversky – ‘system one’ (or ‘type one’) processes describe our fast, automatic and effortless subconscious or unconscious instincts or intuitions, and ‘system two’ (or ‘type two’) processes describe our slow, deliberate and effortful conscious analyses. Broadly, system one is employed when we rely on our intuitions, and system two is employed when we rely on critical thinking.
Human intuitions don’t typically rely on algorithms that will always get people to the correct answers (algorithms come in varying degrees of efficiency but they all reach the correct answers eventually) but on heuristics that will only help people to look for an answer for a given query and are therefore potentially biased and hit-and-miss (heuristics are like ‘rules of thumbs’ or shortcuts that often reach the correct answers but not always). An example heuristic or ‘rule of thumb’ people use that is often hit-and-miss is ‘a product with a higher price equals higher quality’. Some businesses know this is how many customers think hence they directly exploit this heuristic e.g. selling equivalent to a cheap generic item but having it branded, placed in fancier-looking packaging and then charging five times the price for it!
People often don’t buy for quality of product via critical system two analyses but by brand or associated names via casual system one shortcuts because of the assumption that the two (quality and certain brands, or quality and higher price) are always one and the same, and marketers frequently exploit this lazy assumption made by customers at the customers’ expense and the marketer’s gain. Humans rely on a lot of fallible assumptions in their day-to-day interactions but most of the time these assumptions work – or at least don’t immediately cause people to die or go sterile whenever they’re inaccurate – hence these innate instincts and tendencies to form certain crude intuitions nevertheless survive and get passed on.
The reliance on heuristics and the prevalence of biases are not restricted to only laypersons, they are not primarily attributable to wishful thinking, and incentives for judgement accuracy don’t make a difference either. And it’s also surprising that people don’t infer and learn from personal lifelong experience such fundamental statistical rules as regression to the mean or the effects of sample size on sampling variability, for instance. And biases can remain undetected because we seldom test them e.g. every time we make a prediction, we don’t usually keep a notepad of them and tally real-life data against our predictions to check if they’re correct in a scientific way – we just assume they are correct and carry on! And then we’re all biased again when we more readily highlight and remember the times we were correct but hide or forget the times we were wrong. We therefore never personally work out that maybe only 50% of the predictions we were 90% sure of at the time ever actually came true!
Now we must importantly note here that the two systems (one and two) aren’t two different agents inside of us – they’re just two different process pathways or modes of thought (broadly the fast, instinctive and automatic subconscious and unconscious system one; and the slow, thinking and effortful conscious system two) and there’s no single part of the brain that either would call exclusively its centre either (although the limbic system is part of system one). But the labelling of these processes as if they’re entities or ‘characters inside of us’ is probably useful because we can understand, interpret and remember stories about active characters who seem to possess different personalities, habits, abilities and limitations easier than more abstract processes such as ‘assumption’ or ‘mental arithmetic’.
It’s also vital to understand that not all system one instincts are irrational – in our day-to-day, most of the time our fuzzy instincts make the rational (time, effort or cost-to-benefit) decisions; and that’s why most of the time we avoid injury and stay alive. And not all effortfully considered system two solutions are rational too. Across several posts on this topic, we will mainly be focusing on the errors of system one and benefits of system two, but one must remember to put it all into proper perspective. Just like it’s boring to report ‘non-events’ in the news or there’s less to be learnt from things that go right – one must bear in mind that our system one evolved over millions of years to be how it is because it’s largely successful. It’s just that it’s not perfect, especially in certain contexts in today’s modern environment (particularly pertaining to money, which was only invented a few thousand years ago, which is not relatively long in the human specie’s existence and not long in evolutionary timescales), and we’re trying to guard ourselves from these imperfections – some of which are very costly and can be easily exploited by others.
Our pre-programmed genetic instincts overall work to keep us alive and to help us procreate and raise offspring – but they are crude, over-simplistic and fallible at times. Their application is frequently over-generalised, they over-fire, and they create by-product effects – some of which are benign e.g. finding many pets or non-human babies cute too (puppies and kittens, for instance, have features that resemble human babies such as disproportionately big eyes and heads – woof woof), but some of which are harmful but not enough to instantly kill the host or relatively rarely will instantly kill the host e.g. the desire for consuming a lot of sugary and fatty comfort foods when feeling stressed (despite a low risk of an upcoming famine for most people who do so in this modern world). It’s not about abandoning your instincts though (if you could anyway!) – it’s about refining their application rather than crudely and blindly obeying them even when they’ll lead you into making critical cognitive or moral errors. So our intuitions aren’t perfect but work well enough most of the time, but when they go wrong they can be very wrong.
I believe that learning more about psychology will help protect you from being exploited by others at your expense and their gain. As with most other subjects covered in this blog, a lot more is to come about this topic.