A psychologist by training, Kahneman has never taken a course in economics; yet he was awarded the Nobel Prize in Economics in 2002. How did that happen? He says his work came about from two conversations. His late colleague Amos Tversky showed him a paper called “The Psychological Assumptions of Economics,” which posited that the agent of economic theory is rational, selfish, and with tastes that do not change. To a psychologist, Kahneman said, this is astonishing. The notion that our beliefs and choices are logically connected, that we are internally coherent and consistent, without contradiction, is “preposterous” — and he has spent 45 years finding counter examples to prove its fallacy.

The other conversation had to do more with how the public views the notion of intuition. Kahneman says that the common belief is that intuition is magical. But what is intuition? According to the professor, it is knowing something without knowing that you know it. Kahneman feels we need to get rid of this idea that intuition is something magical and see it rather as recognition. A two-year-old points to an object and says, “doggie”; he has no idea what it is but recognizes a pattern. Experienced chess players and physicians recognize patterns from experience. Kahneman gave a personal example. He can tell his wife’s mood on the telephone in one word. He’s had practice with many opportunities to learn. Plus, he has rapid and immediate feedback each time, because one word is followed by another and another, so his intuition is quickly corroborated or not. To Kahneman, there is no magic to intuition; it is another word for expertise. The caveat, however, is that it can only develop in a world that is regular. In an irregular world, you may feel like you have intuition, but you don’t.

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