Economy of happiness (amazing!), theory of perspectives, behavioural economics, neuro-economics...

Winner of the Nobel Prize in Economics, Daniel Kahneman has been upsetting theories on economics and the belief in a perfectly rational homo oeconomicus.

Because he was able to show that our decisions and behaviours are infused with cognitive illusions. He explains that our decisions are above all taken under the influence of an emotional, intuitive and rapid System 1. This System establishes relations and feeds on a network of memories and emotions which are mutually reinforcing one another. It seeks global coherence, but does not rely on anything rational in doing so. Reason is a matter for System 2. This System evaluates the pertinence of the responses of System 1. In addition, it is a living praise of the laziness which is actually saving itself.

The beauty of this analysis is that it gives our sensitive brain a central role again: it is that brain that allows us to make sense of the world around us.

To me, Daniel Kahneman clarifies the power of ethnographic studies from the point of view of an economist and a psychologist. What better illustration of the accuracy of usages observation, as opposed to studies based on declarations? Declarants talk to us with their System 2, while ethnologists observe the rituals of System 1. As explained by Daniel Kahneman, people are "endlessly complicated and interesting!”. I would like to add that deciphering their lives, rituals, usages is also endlessly complicated, but so interesting!

From his works, Daniel Kahneman also draws fascinating conclusions on decision making as applied to business. He explains the systematic and exaggerated optimism of entrepreneurs who idealise their chances of success, because they trust their intuition far more than the objective reality of an economic context. And he gives clues to make better decisions.

As such, we would be living in a world riddled with mistakes! In any case, we would have the entrepreneurial, collective and political responsibility to protect our clients and fellow citizens from the consequences of their mistakes...

Do you feel like reading something amazing after the holiday? I highly recommend Daniel Kahneman’s Thinking, Fast and Slow, Penguin Publishers.

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