Dr. Daniel Kahneman, winner of the 2002 Nobel Prize in economics, joins us to discuss his book Thinking, Fast and Slow.
In this segment, Kahneman discusses an odd result: While many business leaders have been interested in the concepts behind his ideas, actually applying them is another matter entirely. The full version of the interview can be seen here.
Morgan Housel: You've talked before that some people are more interested and curious in your work than they are in actually implementing it in their own lives and businesses, to put forth practices to make better decisions. Do you see that changing, that people are taking it more seriously, to put it into practice?
Daniel Kahneman: There is a fair amount of interest in the work. I actually don't know. The book might have some influence on this, my guess is, but otherwise my experience was giving a lot of talks at businesses and to executives, and so on.
They are really very, very interested in that stuff, until there's a sort of a hint that it might be applicable to their own business, and then they really lose interest very quickly.
This is threatening stuff, actually. It is threatening because the idea that you can question practices, or the idea that you want to re-evaluate practices is threatening in any business.
They're very interested in the principles, but when it comes to something as elementary as evaluating your own performance and trying to improve your decision-making ... that looks like an obvious idea. You mention that idea in many contexts in financial firms; they really don't want to hear about that.
Housel: Because they don't want to be told that they're doing it wrong.
Kahneman: They don't want to be told. That kind of message is threatening to the firm; it's threatening to the leadership of the firm. It goes very, very well until you mention something that "Maybe you could do it yourself," and then you feel the chill in the room. It's immediate.