Nobel laureate Daniel Kahneman, a pioneer of behavioral economics, has died at the age of 90

SAN FRANCISCO (AP) — Daniel Kahneman, a psychologist who won a Nobel Prize in economics for his insights into how deep-rooted neurological biases influence decision-making, died Wednesday at age 90.

Kahneman’s partner Barbara Tversky – the widow of Amos Tversky – confirmed his death to The Associated Press. Tversky, herself a professor emeritus of psychology at Stanford University, said the family is not disclosing the location or cause of death.

Kahneman and his long-time collaborator Amos Tversky have reshaped the field of economics, which before their work largely assumed that people were “rational actors” capable of clearly assessing decisions such as which car to buy or which job to take should accept. The pair’s research – which Kahneman described for a lay audience in his 2011 bestseller “Thinking, Fast and Slow” – focused on how much decision-making is shaped by subterranean quirks and mental shortcuts that bias our thoughts toward irrational but can distort in predictable ways.

Take, for example, false confidence in predictions. In an excerpt from his book, Kahneman described a “leaderless group” challenge used by the Israeli army’s psychological department to assess future leadership potential. Eight contestants, unknown to each other, had to cross a six-foot-high wall together using only one long tree trunk – without the tree trunk touching the wall or the floor or touching the wall itself.

Observers of the test – including Kahneman himself, who was born in Tel Aviv and did his Israeli military service in the 1950s – confidently recognized these challenges as aspiring leaders, only to learn later that their assessments had little to do with how The same soldiers appeared in the officers’ school. The kicker: This fact did not affect the group’s confidence in their own judgments, which seemed intuitively obvious—and yet they continued to fail at predicting leadership potential.

“It was the first cognitive illusion I discovered,” Kahneman later wrote. To describe the phenomenon, he coined the term “illusion of validity.”

Kahneman’s decades-long partnership with Tversky began in 1969, when the two collaborated on a paper analyzing researchers’ intuitions about statistical methods in their work. “The experience was magical,” Kahneman later wrote in his Nobel autobiography. “Amos was often described by people who knew him as the smartest person they knew. He was also very funny… and the result was that we could spend hours of solid work in uninterrupted happiness.”

The two worked so closely together that they tossed a coin to determine which of them would be the lead author of their first work, and simply alternated that honor for decades thereafter.

“Amos and I shared the wonder of possessing together a goose that could lay golden eggs—a shared spirit that was better than our separate minds,” Kahneman wrote.

Kahneman and Tversky began studying decision-making in 1974 and quickly came to the key insight that people respond far more strongly to losses than to equivalent gains. This is today’s common idea of ​​“loss aversion,” which explains, among other things, why many people prefer the status quo when making decisions. Combined with other findings, the two developed a theory of risky decisions that they eventually called “Prospect Theory.”

For these and other contributions that ultimately formed the basis for the discipline now known as behavioral economics, Kahneman received the Nobel Prize in Economic Sciences in 2002. Economists say Tversky would certainly have shared the prize if he had not died in 1996. The Nobel Prize is not awarded posthumously.

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