Thinking Fast and Slow

Thinking Fast and Slow is Nobel Prize-winner Daniel Kahneman's very accessible work about how we think. He anthropomorphizes the quick, impulsive "System One" and the slow, methodical "System Two" as the two parts of our thinking process. System One will often provide us with our "gut" reactions without us seeming to process it. People who are trained with much experience in certain situations will often find System One guiding their reactions, seemingly without them understanding why. (An example was a firefighter who told everyone to evacuate just before a collapse.) System Two is a much slower process and what we use for detailed thinking. Of particular interest was his description of collaboration with his "opponent" Gary Klein and a publication of "A Failure to Disagree". It was interesting to see how two opposing sides could come to realize they agree on a lot.
Kahneman's work has helped to explain a lot of areas where the "rational agent" of economics fails to follow the rules. People often respond to situations based on their given baseline. It tends to be much more painful for people to "lose" than it is beneficial for them to "win". Using this knowledge, many odd behaviors can be explained. Even when we know about a given situation, our initial instinct is often to do it in our "gut" way.