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Science & Medicine · Psychology, behavioural economics

Daniel Kahneman

1934–2024 · Israeli-American · Psychology, behavioural economics
Nobel Prize in Economic Sciences, 2002“for having integrated insights from psychological research into economic science, especially concerning human judgment and decision-making under uncertainty”See all Jewish Nobel laureates → May his memory be a blessing זִכְרוֹנוֹ לִבְרָכָה What this means

Child survivor of Nazi-occupied France who, with Amos Tversky, mapped the systematic errors of human judgment, founded behavioural economics and won the 2002 Nobel Prize in economics.

8 min read
Psychology, behavioural economics
Field
1934–2024
Lifespan
Israeli-American
Nationality
20th century
Era
Nobel Prize in Economic Sciences 2002
Honour
Prospect theory (with Amos Tversky), 1979
Theory
“
I went home more certain than ever that my mother was right: people were endlessly complicated and interesting.
Daniel Kahneman · 1934–2024
Autobiographical essay for the Nobel Foundation, Les Prix Nobel 2002

A child in occupied Paris

Daniel Kahneman was born on March 5, 1934, in Tel Aviv, in British Mandate Palestine, while his mother, Rachel, was visiting her extended family there. Home was Paris. His parents were Lithuanian Jews who had moved to France in the early 1920s and done well; his father, Efrayim, was chief of research at a large chemical factory. They loved most things French, but, as their son later wrote, their roots in France were shallow and they never felt completely secure. A paternal uncle was Rabbi Yosef Shlomo Kahaneman, head of the Ponevezh Yeshiva.

Whatever security they had vanished when Germany invaded France in 1940. In 1941 the seven-year-old drew what he later called probably his first graph: his family’s fortunes plotted against time, crossing into negative territory around 1940. His father was seized in the first large round-up of Jews in Paris and held for six weeks in Drancy, the transit camp from which Jews were deported to the death camps. He was released through the intervention of his employer, whose head, Kahneman learned only decades later, had been the chief financial backer of France’s fascist, antisemitic movement of the 1930s. The family fled to the Riviera in the Vichy zone and, when the Germans arrived there, fled again to central France. His father died of inadequately treated diabetes in 1944, six weeks before the D-Day landings he had longed for.

The SS soldier

One wartime memory stayed with Kahneman all his life. In late 1941 or early 1942, when Jews in Paris had to wear the yellow star and obey a 6 p.m. curfew, he stayed too late at a Christian friend’s house and turned his brown sweater inside out to hide the star as he walked home. On an empty street a German soldier in the black uniform of the SS approached, beckoned him over, picked him up and hugged him, speaking with great emotion in German. Terrified that the soldier would see the star, the boy waited. The man put him down, showed him a photograph of a boy from his wallet, and gave him some money.

Kahneman later wrote that he went home more certain than ever that his mother was right about people: they were endlessly complicated and interesting. He was half-serious when he wondered whether his vocation as a psychologist came from the gossip he absorbed at home, where his mother’s stories about friends and relatives always had two sides or more. “Like many other Jews, I suppose” he wrote, “I grew up in a world that consisted exclusively of people and words.”

Israel, the army and the first illusion

In 1948, just before the founding of the State of Israel, Kahneman, his mother and his sister joined their family in Palestine. Held back a year at school, the precocious, physically awkward boy found himself, for the first time, among friends. As a teenager he was drawn to questions about God and morality, but he discovered that he cared more about why people believed in God than about whether God existed. Vocational testing pointed to psychology, with economics not far behind.

He took his first degree at the Hebrew University of Jerusalem in two years, majoring in psychology with a minor in mathematics, and in 1954 was drafted into the Israel Defense Forces as a second lieutenant. After a year as a platoon leader he moved to the army’s psychology branch. There he helped assess officer candidates by watching them try to carry a telephone pole over a wall as a leaderless team, confident that their true characters were on display. Feedback from officer school showed that the ratings predicted almost nothing, yet the next day the assessors felt just as sure. Kahneman named this gap between statistical evidence and the vivid feeling of insight “the illusion of validity” the first cognitive illusion he discovered.

Aged twenty-one, he was asked to design an interview system for all combat recruits. Influenced by Paul Meehl’s work showing that simple statistical rules beat clinical intuition, he replaced free-form impressions with structured questions about specific traits. The correlation between ratings and later performance rose from about .10 to close to .30, and the system remained in use, with little modification, for decades.

Berkeley, Jerusalem and Amos Tversky

In January 1958 Kahneman and his wife, Irah, arrived in California, where he earned a doctorate in psychology at the University of California, Berkeley, in 1961. Returning to the Hebrew University to teach, he worked on vision and attention and studied how the pupil dilates with mental effort. Teaching flight instructors in the Israeli Air Force, he had what he called the most satisfying eureka moment of his career: an instructor insisted that praise made cadets worse and shouting made them better, and Kahneman realised he was seeing regression to the mean, so that people are statistically punished for rewarding others and rewarded for punishing them.

In 1968–69 he invited a younger colleague, Amos Tversky, to speak to his seminar. Their argument that day turned into lunch, and lunch into one of the most productive partnerships in the history of social science. They worked almost entirely side by side, talking for hours, tossing a coin to decide author order on their first paper and alternating thereafter. Kahneman said he had probably shared more than half the laughs of his life with Tversky. Their first paper, “Belief in the Law of Small Numbers” (1971), showed that even trained scientists trust small samples far too much.

In 1974 they published “Judgment under Uncertainty: Heuristics and Biases” in Science. It argued that people judging probabilities rely on a few mental shortcuts, representativeness, availability and anchoring, which usually serve well but produce predictable, systematic errors. Five years later came “Prospect Theory: An Analysis of Decision under Risk” in Econometrica, which showed that people evaluate outcomes as gains and losses from a reference point rather than as final states of wealth, and that losses loom larger than equivalent gains. Their 1981 work on framing showed that logically identical choices, described differently, lead people to opposite decisions.

Rewriting economics

Prospect theory became one of the most cited papers in economics, and it gave a young economist, Richard Thaler, the framework for what became behavioural economics. Working with Thaler and Jack Knetsch in the 1980s, Kahneman studied fairness in markets and the endowment effect, the tendency to value something more simply because one owns it, demonstrated in experiments with coffee mugs. Kahneman, who had never taken a course in economics, insisted that much of the work of integrating psychology into economics had been done by Thaler and the young economists around him.

The practical consequences have been large. Loss aversion, framing, anchoring and overconfidence now inform how pension plans set default enrolment, how governments design tax letters and public-health campaigns, how doctors present risks to patients, how investors are warned against their own instincts, and how courts and companies try to reduce bias in judgment. Governments in Britain, the United States and elsewhere set up behavioural-insights units built on the foundations he and Tversky laid.

In 2002 Kahneman received the Nobel Memorial Prize in Economic Sciences, shared with Vernon L. Smith, “for having integrated insights from psychological research into economic science.” Tversky had died of cancer in 1996, and the prize is not awarded posthumously; Kahneman said plainly that it was awarded for work the two had done together.

Happiness, memory and two systems

From the 1990s Kahneman turned to well-being. He distinguished the experiencing self, which lives through each moment, from the remembering self, which keeps score and makes decisions. Studies of patients undergoing colonoscopies showed that memories of pain depend mainly on the worst moment and the final moments, the peak-end rule, while the duration hardly matters. With David Schkade he described the focusing illusion, the tendency to exaggerate the importance of whatever one is thinking about, and with colleagues he developed the Day Reconstruction Method for measuring how people actually feel through their days.

He also championed what he called adversarial collaboration, in which scientists who disagree design and run joint experiments instead of trading hostile rebuttals. In 2011 he gathered a lifetime of research in Thinking, Fast and Slow, which describes a fast, intuitive System 1 and a slow, effortful System 2. It became an international bestseller and made his vocabulary part of everyday speech. When studies of social priming that the book had cited failed to replicate, Kahneman publicly urged researchers in 2012 to address the problem, and later acknowledged that he had placed too much faith in underpowered studies. In 2013 President Barack Obama awarded him the Presidential Medal of Freedom, and in 2021, at eighty-seven, he published Noise: A Flaw in Human Judgment with Olivier Sibony and Cass Sunstein.

Jewish and Israeli life

Kahneman’s life traced the arc of twentieth-century Jewish history: a family from Lithuania, a childhood hunted in occupied France, a father who passed through Drancy, a refugee’s arrival in the Land of Israel on the eve of statehood, and service in the young state’s army when, as he put it, its institutions were only seven years old and improvisation was the norm. He was not religious; even before he turned eleven he wrote an essay arguing that genuine religious experience was rare and that cathedrals and organ music supplied a more reliable substitute. But the questions of belief and of human cruelty and kindness that his childhood forced on him became the raw material of his science.

He taught at the Hebrew University from 1961 to 1977 before moving to North America, holding posts at the University of British Columbia (1978–86), Berkeley (1986–93) and Princeton (from 1993), where he was professor of psychology and public affairs and later emeritus. He remained closely tied to Israel and to its scientific community throughout his life.

Love, loss and a last decision

With his first wife, Irah, Kahneman had two children, Lenore and Michael. In 1978 he married the British cognitive psychologist Anne Treisman, whose brilliant talk on attention he had heard at Harvard a decade earlier; they were married until her death in 2018, and Princeton’s Kahneman-Treisman Center for Behavioral Science and Public Policy bears both their names. In his last years his partner was the cognitive psychologist Barbara Tversky, Amos Tversky’s widow, with whom he lived in New York.

Kahneman died on March 27, 2024, three weeks after his ninetieth birthday. A year later, his friend the journalist Jason Zweig reported in The Wall Street Journal that Kahneman had chosen to end his life with medical assistance in Switzerland, after spending several days in Paris with Barbara Tversky. In a farewell message to those closest to him, he wrote that his kidneys were failing and his mental lapses increasing, and that he had long believed that “the miseries and indignities of the last years of life are superfluous.” He had not wanted his choice made public, and those who loved him responded to it in different ways.

Legacy

Few scientists have changed how ordinary people talk about their own minds. Before Kahneman and Tversky, economics largely assumed that people weigh costs and benefits like flawless calculators. They showed, with simple questions anyone could answer, that human judgment errs in ways that are systematic and therefore predictable, and that knowing those patterns makes better decisions possible, for individuals and for whole institutions.

Kahneman himself was famously unsentimental about his own certainties, quick to doubt his conclusions and to credit others. That habit of mind, learned perhaps from a boy’s encounter with an SS soldier who was both a terror and a grieving father, runs through everything he wrote: people are neither simply rational nor simply foolish, but endlessly complicated, and worth understanding.

Sources & further reading

Daniel Kahneman, Biographical, NobelPrize.org · Daniel Kahneman, Wikipedia · Daniel Kahneman, pioneering behavioral psychologist, Nobel laureate and ‘giant in the field’ dies at 90, Princeton University · Daniel Kahneman, Israeli-American Nobel Prize winner, died last year by assisted suicide, The Jerusalem Post · Researched from the sources above and checked against them. Spotted an error? Tell us.

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