ECONOMICS

Detailed explanation-1: -System 1 thinking is a near-instantaneous process; it happens automatically, intuitively, and with little effort. It’s driven by instinct and our experiences. System 2 thinking is slower and requires more effort. It is conscious and logical.

Detailed explanation-2: -System 1 operates automatically and quickly, with little or no effort and no sense of voluntary control. System 2 allocates attention to the effortful mental activities that demand it, including complex computations.

Detailed explanation-3: -System 1 “is the brain’s fast, automatic, intuitive approach”[2]. System 1 activity includes the innate mental activities that we are born with, such as a preparedness to perceive the world around us, recognise objects, orient attention, avoid losses-and fear spiders!

Detailed explanation-4: -An example of System 1 thinking is detecting that one object is more distant than another, while an example of System 2 thinking is parking in a narrow space. Using the two system view as the foundation, Kahneman discusses human judgment and decision-making with all of its biases and heuristics.