The Undoing Project: A Friendship that Changed Our Minds

"The Undoing Project: A Friendship That Changed Our Minds" by Michael Lewis explores the groundbreaking work of psychologists Daniel Kahneman and Amos Tversky. Their research challenged traditional economic theories by demonstrating that human decision-making is often irrational and influenced by cognitive biases.12

Kahneman and Tversky developed the concept of heuristics, which are mental shortcuts or rules of thumb that people use to make quick judgments under uncertainty. While these heuristics can be efficient, they often lead to systematic errors in judgment, known as cognitive biases. Their work, particularly the development of prospect theory, integrated psychological insights into economics, earning Kahneman a Nobel Prize. This research fundamentally altered our understanding of how people make decisions, especially in situations involving risk and uncertainty.21