Daniel Kahneman

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Lore & Background

Kahneman was born in Tel Aviv, in the British Mandate of Palestine (now Israel), on March 5, 1934 while his mother Rachel was visiting her family. He spent his childhood years in Paris. Kahneman and his family were in Paris when it was occupied by Nazi Germany in 1940. His father, Efrayim, was picked up in the first major round-up of French Jews, but was released after six weeks due to the intervention of his employer, La Cagoule backer Eugène Schueller. The family was on the run for the remainder of the war but survived except for Efrayim who died of diabetes in 1944. Kahneman and his family then moved to Mandatory Palestine in 1948, just before the creation of the state of Israel. Kahneman wrote of his experience in Nazi-occupied France: 'It must have been late 1941 or early 1942. Jews were required to wear the Star of David and to obey a 6 p.m. curfew. I had gone to play with a Christian friend and had stayed too late. I turned my brown sweater inside out to walk the few blocks home. As I was walking down an empty street, I saw a German soldier approaching. He was wearing the black uniform that I had been told to fear more than others – the one worn by specially recruited SS soldiers. As I came closer to him, trying to walk fast, I noticed that he was looking at me intently. Then he beckoned me over, picked me up, and hugged me. I was terrified that he would notice the star inside my sweater. He was speaking to me with great emotion, in German. When he put me down, he opened his wallet, showed me a picture of a boy, and gave me some money. I went home more certain than ever that my mother was right: people were endlessly complicated and interesting.'

In 1954, Kahneman received his Bachelor of Science degree, with a major in psychology and a minor in mathematics, from the Hebrew University of Jerusalem. Israeli intellectual Yeshayahu Leibowitz, whom Kahneman describes as influential in his intellectual development, was Kahneman's chemistry teacher at Beit-Hakerem High School, and Kahneman's physiology professor at university. Kahneman was led to psychology when he discovered in his teens that he was more interested in why people believe in God than in whether God exists, and more interested in indignation than in ethics. In 1954, he began his military service in the Israel Defense Forces as a second lieutenant, serving for a year in infantry. He then served in the psychology department of the IDF, where he developed a structured interview for combat recruits that remained in use in the IDF for several decades. In 1958, he went to the United States to study for his PhD in Psychology at the University of California, Berkeley. His 1961 dissertation, advised by Susan Ervin, examined relations between adjectives in the semantic differential and allowed him to 'engage in two of [his] favorite pursuits: the analysis of complex correlational structures and FORTRAN programming'. Kahneman's lengthy collaboration with Amos Tversky began in 1969, after Tversky gave a guest lecture at one of Kahneman's seminars at Hebrew University. Their first jointly written paper, 'Belief in the Law of Small Numbers,' was published in 1971. They published seven journal articles in the years 1971 to 1979. They flipped a coin to determine whose name would appear first on their initial paper and alternated thereafter. Their article 'Judgment Under Uncertainty: Heuristics and Biases' introduced the notion of anchoring. Kahneman and Tversky spent an entire year at an office in the Van Leer Institute in Jerusalem, writing this paper. They spent more than three years revising an early version of prospect theory that was completed in early 1975. The final version was published in 1979 in Econometrica, the leading economic journal at the time. That paper became the most cited in economics. Kahneman left Hebrew University in 1978 to take a position at the University of British Columbia. In 2021, Kahneman co-authored a book with Olivier Sibony and Cass Sunstein, titled Noise: A Flaw in Human Judgment.

Reader's Guide

Kahneman's significance lies in his empirical demonstration that human judgment is systematically flawed by cognitive biases and heuristics, challenging the assumption of rationality in economics. With Amos Tversky and others, Kahneman established a cognitive basis for common human errors that arise from heuristics and biases, and developed prospect theory. Their 1979 Econometrica paper became the most cited in economics. Its success was due to its synthesis of ideas and results discussed at the time about economic behavior under risk in a simple model, whose predictions were systematically supported by psychological experiments. Kahneman was ultimately awarded the Nobel Memorial Prize in Economics in 2002 'for having integrated insights from psychological research into economic science, especially concerning human judgment and decision-making under uncertainty.' In the introduction of Thinking, Fast and Slow, Kahneman acknowledges and shares that 'our collaboration on judgment and decision making was the reason for the Nobel Prize that I received in 2002, which Amos Tversky would have shared had he not died, aged fifty-nine, in 1996.' The Harvard psychologist and author Daniel Gilbert said of Kahneman that: 'His central message could not be more important, namely, that human reason left to its own devices is apt to engage in a number of fallacies and systematic errors, so if we want to make better decisions in our personal lives and as a society, we ought to be aware of these biases and seek workarounds. That's a powerful and important discovery.' Building in part on prospect theory and Kahneman and Tversky's body of work, Richard Thaler published 'Toward a Positive Theory of Consumer Choice' in 1980, a paper which Kahneman called 'the founding text of behavioral economics.' In 2011, Kahneman was named by Foreign Policy magazine in its list of top global thinkers. In the same year, his book Thinking, Fast and Slow, which summarizes much of his research, was published and became a best seller. In 2015, The Economist listed him as the seventh most influential economist in the world.

Did You Know?

• Kahneman's father, Efrayim, was picked up in the first major round-up of French Jews but was released after six weeks due to the intervention of his employer, La Cagoule backer Eugène Schueller.
• Kahneman and Amos Tversky flipped a coin to determine whose name would appear first on their initial paper and alternated thereafter.
• Kahneman's 1961 dissertation allowed him to 'engage in two of [his] favorite pursuits: the analysis of complex correlational structures and FORTRAN programming'.
• Kahneman was led to psychology when he discovered in his teens that he was more interested in why people believe in God than in whether God exists.
• Kahneman was married to cognitive psychologist and Royal Society Fellow Anne Treisman, who died in 2018.