Kahneman's dual-system thinking - Revision history

Kallinakr at 18:02, 28 February 2021

2021-02-28T18:02:52Z

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	In this article, the application of the psychological Kahneman’s theory of the dual system thinking was demonstrated mainly in the decision-making phase of projects as well as in the leadership skills that a project manager should have. There is not a straight line in adopting a certain type of System. As it was described in the previous examples, when it comes to alternative ideas, imagination, optimism, and simple, effortless decisions then the autonomous System 1 is the most appropriate. When it comes to evaluation, reassessment and adjusting in the constantly changing environments, then System 2 thinking is more suitable. But in more complex projects, such as management projects, there is no false nor right application of these two systems. Kahneman’s model of the dual system thinking starts to be reviewed and applied among those working within the disciplines of psychology and economics as well as in our daily life.		In this article, the application of the psychological Kahneman’s theory of the dual system thinking was demonstrated mainly in the decision-making phase of projects as well as in the leadership skills that a project manager should have. There is not a straight line in adopting a certain type of System. As it was described in the previous examples, when it comes to alternative ideas, imagination, optimism, and simple, effortless decisions then the autonomous System 1 is the most appropriate. When it comes to evaluation, reassessment and adjusting in the constantly changing environments, then System 2 thinking is more suitable. But in more complex projects, such as management projects, there is no false nor right application of these two systems. Kahneman’s model of the dual system thinking starts to be reviewed and applied among those working within the disciplines of psychology and economics as well as in our daily life.

	~~== Annotated Bibliography ==~~

	== Annotated Bibliography ==		== Annotated Bibliography ==

Kallinakr: /* Annotated Bibliography */

2021-02-28T18:00:39Z

Annotated Bibliography

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	== Annotated Bibliography ==		== Annotated Bibliography ==

			== Annotated Bibliography ==
			# The book "Thinking, Fast and Slow" by Daniel Kahneman is the main inspiration of this article. It contains information about the dual system of thinking by presenting a variety of examples. The core of the book is the impact of this system in psychology as well as in other scientific fields such as economy and management. With the extensive analyzation, the author’s objective is to make the reader more comfortable in using psychological terms and methods in businesses or simpler tasks.
			# The article "Before you make that big decision" by Kahneman, Lovallo, & Sibony aims to the comprehension of how crucial the decisions are in different institutions and organizations and their impact. It refers to the two-system of thinking and how this method can be applied in the decision-making phase. Retrieved by https://www.researchgate.net/publication/51453002_Before_you_make_that_big_decision
			# The book " A guide to the project management body of knowledge " by the Project Management Institute is a Project Management guide. It contains and describes every project management task, from the very basic terminology to more extensive study in specific project management fields.

	== References ==		== References ==
	<references/>		<references/>

Kallinakr: /* System 2 */

2021-02-28T17:36:39Z

System 2

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	The well-known properties of System 2 are attention and concentration. The performance of each action or activity depends on the concentration of the human. For examples, when the attention is distracted, the performance does not have the expected outcome and it can be reported as bad performance or inadequate <ref name="W1"/>. Some examples are:		The well-known properties of System 2 are attention and concentration. The performance of each action or activity depends on the concentration of the human. For examples, when the attention is distracted, the performance does not have the expected outcome and it can be reported as bad performance or inadequate <ref name="W1"/>. Some examples are:

	• Filling out important documents		• Filling out important documents

	• Price or quality comparison of products for future purchase		• Price or quality comparison of products for future purchase

	• Looking for a person with specific characteristics in the crowd		• Looking for a person with specific characteristics in the crowd

	• Focusing on the voice of a specific person in the crowd.		• Focusing on the voice of a specific person in the crowd.

	• Observation of the appropriateness of a bad behavior in the workplace or a social situation		• Observation of the appropriateness of a bad behavior in the workplace or a social situation

	• Examination of the rationality or objectivity of a complex argument or statement		• Examination of the rationality or objectivity of a complex argument or statement
	• Searching memory to distinguish a familiar sound or face.
			• Searching memory to distinguish a familiar sound or face

	• Adaptation to new data like driving on the right instead of the left side of a car		• Adaptation to new data like driving on the right instead of the left side of a car


	=== Link between the two systems ===		=== Link between the two systems ===

Kallinakr: /* System 1 */

2021-02-28T17:36:06Z

System 1

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	~~•Easy~~ mathematical functions like multiplication, addition etc. (3 x 3 = ?, 10 + 5 = ?)		• Easy mathematical functions like multiplication, addition etc. (3 x 3 = ?, 10 + 5 = ?)
	~~•Expressions~~ of disgust when smelled or shown something repulsive.
	~~•Comprehension~~ of simple sentences in your own language		• Expressions of disgust when smelled or shown something repulsive.
	~~•Detection~~ of the source of a sound
	~~•Fear~~ of something horrifying like snakes, spiders, sharks etc.		• Comprehension of simple sentences in your own language
	~~•Recognition~~ of hostility in a voice
	~~•Replying~~ to something simple such as which is the capital of a country (knowledge acquired)		• Detection of the source of a sound
	~~•Driving~~ a car on an empty road
	~~•Finding~~ strong chess moves or in general game moves (knowledge acquired by specialized players)		• Fear of something horrifying like snakes, spiders, sharks etc.
	~~•Sensitive~~ to changes
			• Recognition of hostility in a voice

			• Replying to something simple such as which is the capital of a country (knowledge acquired)

			• Driving a car on an empty road

			• Finding strong chess moves or in general game moves (knowledge acquired by specialized players)

			• Sensitive to changes

	=== System 2 ===		=== System 2 ===

Kallinakr: /* System 1 */

2021-02-28T17:35:32Z

System 1

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	When it comes to System 1, the most appropriate word to describe its whole nature is automation <ref name="W1"/>. There are several everyday actions, behaviors, and activities that a human being usually does without making any effort or any thinking. This type of thinking requires inherent skills such the perception of the world from the time a human was born, the sense of fear, the recognition of simple items or the avoidance of unpleasant situations <ref name="W1"/>. Additionally, there are some skills that acquire knowledge, practice, and time in order to be characterized as “automatic” such as chess moves. Some simple examples of System 1 are:		When it comes to System 1, the most appropriate word to describe its whole nature is automation <ref name="W1"/>. There are several everyday actions, behaviors, and activities that a human being usually does without making any effort or any thinking. This type of thinking requires inherent skills such the perception of the world from the time a human was born, the sense of fear, the recognition of simple items or the avoidance of unpleasant situations <ref name="W1"/>. Additionally, there are some skills that acquire knowledge, practice, and time in order to be characterized as “automatic” such as chess moves. Some simple examples of System 1 are:

	~~• Easy mathematical functions like multiplication, addition etc. (3 x 3 = ?, 10 + 5 = ?)~~
	~~• Expressions of disgust when smelled or shown something repulsive.~~
	~~• Comprehension of simple sentences in your own language~~
	~~• Detection of the source of a sound~~
	~~• Fear of something horrifying like snakes, spiders, sharks etc.~~
	~~• Recognition of hostility in a voice~~
	~~• Replying to something simple such as which is the capital of a country (knowledge acquired)~~
	~~• Driving a car on an empty road~~
	~~• Finding strong chess moves or in general game moves (knowledge acquired by specialized players)~~
	~~• Sensitive to changes~~

			•Easy mathematical functions like multiplication, addition etc. (3 x 3 = ?, 10 + 5 = ?)
			•Expressions of disgust when smelled or shown something repulsive.
			•Comprehension of simple sentences in your own language
			•Detection of the source of a sound
			•Fear of something horrifying like snakes, spiders, sharks etc.
			•Recognition of hostility in a voice
			•Replying to something simple such as which is the capital of a country (knowledge acquired)
			•Driving a car on an empty road
			•Finding strong chess moves or in general game moves (knowledge acquired by specialized players)
			•Sensitive to changes

	=== System 2 ===		=== System 2 ===

Kallinakr: /* Successful Leadership */

2021-02-28T17:26:50Z

Successful Leadership

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	To conclude with, a project manager in order to be characterized as a successful leader should take cognizance of the rest of his/her team (collaboration), have a holistic and systemic view of the project without considering not only the favorable factors, but any kind of given data, have the ability to distinguish in a big sample of information what is rational and useful and what is irrelevant (critical thinking) and seek consensus.		To conclude with, a project manager in order to be characterized as a successful leader should take cognizance of the rest of his/her team (collaboration), have a holistic and systemic view of the project without considering not only the favorable factors, but any kind of given data, have the ability to distinguish in a big sample of information what is rational and useful and what is irrelevant (critical thinking) and seek consensus.

	There are many management experts who study about cognitive biases without providing any help or explanation. <ref> Kahneman, Lovallo, & Sibony (2011) Before you make that big decision. Massachusetts: Harvard Business Publishing </ref>. The authors of the article underline the fact that even when people are aware of the existence of biases, they are reluctant to discard them. Researchers have documented that at an organizational level, the possibilities of overcoming these biases are more that in the individual level. This observation is true regarding the power of team dynamic. Even though an individual cannot control his own biases, he can detect other’s fallacies and irrational judgement more easily.		There are many management experts who study about cognitive biases without providing any help or explanation. <ref name="W4"> Kahneman, Lovallo, & Sibony (2011) Before you make that big decision. Massachusetts: Harvard Business Publishing </ref>. The authors of the article underline the fact that even when people are aware of the existence of biases, they are reluctant to discard them. Researchers have documented that at an organizational level, the possibilities of overcoming these biases are more that in the individual level. This observation is true regarding the power of team dynamic. Even though an individual cannot control his own biases, he can detect other’s fallacies and irrational judgement more easily.
	Maybe by adopting the second type of thinking, a project manager can acquire the trusting of the team and described as a successful leader, but it is not a norm.		Maybe by adopting the second type of thinking, a project manager can acquire the trusting of the team and described as a successful leader, but it is not a norm.

Kallinakr: /* Predictions */

2021-02-28T17:25:12Z

Predictions

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	=== Predictions ===		=== Predictions ===

	A Project Manager has a lot of responsibilities in a project lifecycle such as forecasting future advantages or failures. One of them could be during the risk management phase. Many of the predictive judgments rely on the excessive knowledge of the environment that a project is part of and observations on similar occasions. According to Kahneman, most of the judgements are influenced by a mixture of analysis and intuition. The link between the evidence and the predictive target is crucial, but indirect. System 2 is prone to rejecting irrelevant or false information even though System 1 is not capable of adjusting for smaller weaknesses. System 2 is responsible for correcting the intuitive predictions even if it makes the task or the project more complicated. According to Kahneman’s book, a common characteristic of unbiased predictions is possibility of predicting an extreme event or scenario, when the given information is reliable and adequate. Otherwise, when the predictions are “safer”, the possibility of predicting a rare or unusual event can be inconsiderable. System 1 consists of characteristics such as extreme predictions and the ability of predicting unusual situations based on weak evidence. The outcome of the application of the aforementioned is the generation of overconfident judgments. For instance, a project cost manager during the cost estimation process of a big construction project, needs valid information of previous projects of the same scale. The project manager should take into his/her consideration cost trade-offs and risks in order to achieve optimal costs for the project <ref name="W3"/>. By taking the information of the current project as well as several factors regarding future costs that may occur during the construction process into account, the project manager creates an initial cost estimation plan. In this example, the first type of thinking is associated with the project manager’s unbiased predictions for the total cost.		A Project Manager has a lot of responsibilities in a project lifecycle such as forecasting future advantages or failures. One of them could be during the risk management phase. Many of the predictive judgments rely on the excessive knowledge of the environment that a project is part of and observations on similar occasions. According to Kahneman, most of the judgements are influenced by a mixture of analysis and intuition. The link between the evidence and the predictive target is crucial, but indirect. System 2 is prone to rejecting irrelevant or false information even though System 1 is not capable of adjusting for smaller weaknesses. System 2 is responsible for correcting the intuitive predictions even if it makes the task or the project more complicated. According to Kahneman’s book, a common characteristic of unbiased predictions is possibility of predicting an extreme event or scenario, when the given information is reliable and adequate. Otherwise, when the predictions are “safer”, the possibility of predicting a rare or unusual event can be inconsiderable. System 1 consists of characteristics such as extreme predictions and the ability of predicting unusual situations based on weak evidence. The outcome of the application of the aforementioned is the generation of overconfident judgments. For instance, a project cost manager during the cost estimation process of a big construction project, needs valid information of previous projects of the same scale. The project manager should take into his/her consideration cost trade-offs and risks in order to achieve optimal costs for the project <ref name="W3">Project Management Institute (2017) A guide to the project management body of knowledge (PMBOK guide). Pennsylvania: Project Management Institute, Inc.</ref>. By taking the information of the current project as well as several factors regarding future costs that may occur during the construction process into account, the project manager creates an initial cost estimation plan. In this example, the first type of thinking is associated with the project manager’s unbiased predictions for the total cost.

	=== Successful Leadership ===		=== Successful Leadership ===

Kallinakr: /* Predictions */

2021-02-28T17:22:33Z

Predictions

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	=== Predictions ===		=== Predictions ===

	A Project Manager has a lot of responsibilities in a project lifecycle such as forecasting future advantages or failures. One of them could be during the risk management phase. Many of the predictive judgments rely on the excessive knowledge of the environment that a project is part of and observations on similar occasions. According to Kahneman, most of the judgements are influenced by a mixture of analysis and intuition. The link between the evidence and the predictive target is crucial, but indirect. System 2 is prone to rejecting irrelevant or false information even though System 1 is not capable of adjusting for smaller weaknesses. System 2 is responsible for correcting the intuitive predictions even if it makes the task or the project more complicated. According to Kahneman’s book, a common characteristic of unbiased predictions is possibility of predicting an extreme event or scenario, when the given information is reliable and adequate. Otherwise, when the predictions are “safer”, the possibility of predicting a rare or unusual event can be inconsiderable. System 1 consists of characteristics such as extreme predictions and the ability of predicting unusual situations based on weak evidence. The outcome of the application of the aforementioned is the generation of overconfident judgments. For instance, a project cost manager during the cost estimation process of a big construction project, needs valid information of previous projects of the same scale. The project manager should take into his/her consideration cost trade-offs and risks in order to achieve optimal costs for the project <ref name="W3"/~~> Project Management Institute (2017) A guide to the project management body of knowledge (PMBOK guide). Pennsylvania: Project Management Institute, Inc.</ref~~> . By taking the information of the current project as well as several factors regarding future costs that may occur during the construction process into account, the project manager creates an initial cost estimation plan. In this example, the first type of thinking is associated with the project manager’s unbiased predictions for the total cost.		A Project Manager has a lot of responsibilities in a project lifecycle such as forecasting future advantages or failures. One of them could be during the risk management phase. Many of the predictive judgments rely on the excessive knowledge of the environment that a project is part of and observations on similar occasions. According to Kahneman, most of the judgements are influenced by a mixture of analysis and intuition. The link between the evidence and the predictive target is crucial, but indirect. System 2 is prone to rejecting irrelevant or false information even though System 1 is not capable of adjusting for smaller weaknesses. System 2 is responsible for correcting the intuitive predictions even if it makes the task or the project more complicated. According to Kahneman’s book, a common characteristic of unbiased predictions is possibility of predicting an extreme event or scenario, when the given information is reliable and adequate. Otherwise, when the predictions are “safer”, the possibility of predicting a rare or unusual event can be inconsiderable. System 1 consists of characteristics such as extreme predictions and the ability of predicting unusual situations based on weak evidence. The outcome of the application of the aforementioned is the generation of overconfident judgments. For instance, a project cost manager during the cost estimation process of a big construction project, needs valid information of previous projects of the same scale. The project manager should take into his/her consideration cost trade-offs and risks in order to achieve optimal costs for the project <ref name="W3"/>. By taking the information of the current project as well as several factors regarding future costs that may occur during the construction process into account, the project manager creates an initial cost estimation plan. In this example, the first type of thinking is associated with the project manager’s unbiased predictions for the total cost.

	=== Successful Leadership ===		=== Successful Leadership ===

Kallinakr: /* Predictions */

2021-02-28T17:21:37Z

Predictions

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	=== Predictions ===		=== Predictions ===

	A Project Manager has a lot of responsibilities in a project lifecycle such as forecasting future advantages or failures. One of them could be during the risk management phase. Many of the predictive judgments rely on the excessive knowledge of the environment that a project is part of and observations on similar occasions. According to Kahneman, most of the judgements are influenced by a mixture of analysis and intuition. The link between the evidence and the predictive target is crucial, but indirect. System 2 is prone to rejecting irrelevant or false information even though System 1 is not capable of adjusting for smaller weaknesses. System 2 is responsible for correcting the intuitive predictions even if it makes the task or the project more complicated. According to Kahneman’s book, a common characteristic of unbiased predictions is possibility of predicting an extreme event or scenario, when the given information is reliable and adequate. Otherwise, when the predictions are “safer”, the possibility of predicting a rare or unusual event can be inconsiderable. System 1 consists of characteristics such as extreme predictions and the ability of predicting unusual situations based on weak evidence. The outcome of the application of the aforementioned is the generation of overconfident judgments. For instance, a project cost manager during the cost estimation process of a big construction project, needs valid information of previous projects of the same scale. The project manager should take into his/her consideration cost trade-offs and risks in order to achieve optimal costs for the project <ref name="W3"/> Project Management Institute (2017) A guide to the project management body of knowledge (PMBOK guide). Pennsylvania: Project Management Institute, Inc.</ref>. By taking the information of the current project as well as several factors regarding future costs that may occur during the construction process into account, the project manager creates an initial cost estimation plan. In this example, the first type of thinking is associated with the project manager’s unbiased predictions for the total cost.		A Project Manager has a lot of responsibilities in a project lifecycle such as forecasting future advantages or failures. One of them could be during the risk management phase. Many of the predictive judgments rely on the excessive knowledge of the environment that a project is part of and observations on similar occasions. According to Kahneman, most of the judgements are influenced by a mixture of analysis and intuition. The link between the evidence and the predictive target is crucial, but indirect. System 2 is prone to rejecting irrelevant or false information even though System 1 is not capable of adjusting for smaller weaknesses. System 2 is responsible for correcting the intuitive predictions even if it makes the task or the project more complicated. According to Kahneman’s book, a common characteristic of unbiased predictions is possibility of predicting an extreme event or scenario, when the given information is reliable and adequate. Otherwise, when the predictions are “safer”, the possibility of predicting a rare or unusual event can be inconsiderable. System 1 consists of characteristics such as extreme predictions and the ability of predicting unusual situations based on weak evidence. The outcome of the application of the aforementioned is the generation of overconfident judgments. For instance, a project cost manager during the cost estimation process of a big construction project, needs valid information of previous projects of the same scale. The project manager should take into his/her consideration cost trade-offs and risks in order to achieve optimal costs for the project <ref name="W3"/> Project Management Institute (2017) A guide to the project management body of knowledge (PMBOK guide). Pennsylvania: Project Management Institute, Inc.</ref> . By taking the information of the current project as well as several factors regarding future costs that may occur during the construction process into account, the project manager creates an initial cost estimation plan. In this example, the first type of thinking is associated with the project manager’s unbiased predictions for the total cost.

	=== Successful Leadership ===		=== Successful Leadership ===

Kallinakr: /* Application in Project Management */

2021-02-28T17:19:22Z

Application in Project Management

← Older revision		Revision as of 17:19, 28 February 2021
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	== Application in Project Management==		== Application in Project Management==
	The dual-system thinking in project management tasks is mainly applied in the decision-making phase or in general in project manager’s behavior. Furthermore, for a better understanding of the bias in a more professional level, Kahneman's systems of thinking can be applied by combining various psychological and economical disciplines. <ref name="W2">>Robin Mansell (2012): Critical thinking: Kahneman and policy making, Prometheus: Critical Studies in Innovation, 30:4, 461-464. </ref>. It is worldwide known in the management scientific area that the decision-making phase is the cornerstone of a successful project. Project managers make several decisions during the project life cycle and thus they have to be extra cautious during this procedure. Biases and other numerous influences contribute to the final decisions <ref name="W2"/>. In this part, the two-type thinking makes its entrance by analyzing the phenomena below.		The dual-system thinking in project management tasks is mainly applied in the decision-making phase or in general in project manager’s behavior. Furthermore, for a better understanding of the bias in a more professional level, Kahneman's systems of thinking can be applied by combining various psychological and economical disciplines. <ref name="W2">Robin Mansell (2012): Critical thinking: Kahneman and policy making, Prometheus: Critical Studies in Innovation, 30:4, 461-464. </ref>. It is worldwide known in the management scientific area that the decision-making phase is the cornerstone of a successful project. Project managers make several decisions during the project life cycle and thus they have to be extra cautious during this procedure. Biases and other numerous influences contribute to the final decisions <ref name="W2"/>. In this part, the two-type thinking makes its entrance by analyzing the phenomena below.


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	=== Successful Leadership ===		=== Successful Leadership ===

	A successful project manager should have not only organizational skills, but also leadership skills. According to the PMBOK guide, some leadership characteristics are team guidance, communication, motivation, direction and critical thinking <ref name="W3"/>. A project manager considers human behavior, and he/she is constantly trying to be a good leader, since good leadership is one of the cornerstones of a successful project. Some of the qualities and skills of a leader is being visionary, collaborative, and last but not least, being confident. Several biases are on the game and a leader must be able to control them.		A successful project manager should have not only organizational skills, but also leadership skills. According to the PMBOK guide, some leadership characteristics are team guidance, communication, motivation, direction and critical thinking <ref name="W3"/>. A project manager considers human behavior, and he/she is constantly trying to be a good leader, since good leadership is one of the cornerstones of a successful project. Some of the qualities and skills of a leader is being visionary, collaborative, and last but not least, being confident. Several biases are on the game and a leader must be able to control them.

	In contrast with the dual-system of thinking, System 1 is not famous for its ability to doubt by suppressing incertitude. Its theories and actions are based on mainly coherent data make it more biased by “unmistaken” facts. Furthermore, System 1 prefers to utilize information given by a small sample which consists of almost only rational data, instead of taking a bigger sample into consideration <ref name="W1"/>. Naturally, a bigger sample involves a variety of information, which many of them can be described as irrational, yet real. It is evident that system 1 can exaggerate the consistency of the data and represent a reality which makes too much sense even though it is not the real one. According to Kahneman, subjective confidence in a judgement is not equal to a correct judgement. The author recommends considering admissions of uncertainty without declaring high confidence based on an individual point of view, even if this individual strongly believes that his/her opinion is the true one. This phenomenon is called “Illusion of Validity” and it can be seen in several leadership situations, not only in the management field <ref name="W1"/>.		In contrast with the dual-system of thinking, System 1 is not famous for its ability to doubt by suppressing incertitude. Its theories and actions are based on mainly coherent data make it more biased by “unmistaken” facts. Furthermore, System 1 prefers to utilize information given by a small sample which consists of almost only rational data, instead of taking a bigger sample into consideration <ref name="W1"/>. Naturally, a bigger sample involves a variety of information, which many of them can be described as irrational, yet real. It is evident that system 1 can exaggerate the consistency of the data and represent a reality which makes too much sense even though it is not the real one. According to Kahneman, subjective confidence in a judgement is not equal to a correct judgement. The author recommends considering admissions of uncertainty without declaring high confidence based on an individual point of view, even if this individual strongly believes that his/her opinion is the true one. This phenomenon is called “Illusion of Validity” and it can be seen in several leadership situations, not only in the management field <ref name="W1"/>.