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Daniel Kahneman, who explored the psychology of economics, dies at 90

Daniel Kahneman died on Wednesday at the age of 90. He never took an economics course, but he pioneered a psychology-based branch of the field and won the Nobel Prize in Economics in 2002.

His death was confirmed by his partner, Barbara Tversky, but she declined to reveal the cause of his death.

Professor Kahneman, who has long been associated with Princeton University and lives in Manhattan, uses his training as a psychologist to advance what is known as behavioral economics. This work, mostly done in the 1970s, sparked a rethinking of distant issues.Examples include medical malpractice, international political negotiations, and baseball talent evaluations, all of which he analyzed, mostly with Amos Tversky, a Stanford University cognitive psychologist who has done groundbreaking work on human judgment and decision-making. (Ms. Tversky’s husband is Professor Tversky, died 1996. She and Professor Kahneman had become partners several years ago. )

While traditional economics assumes that humans generally behave in a perfectly rational manner and that as risk increases, any exceptions disappear, behavioral schools are based on deep-seated psychological biases that can distort judgment and are often counterintuitive. result.

“His central idea is very important,” says Harvard psychologist and author Steven Pinker tell the guardian 2014, “That said, human reason is prone to making many fallacies and systematic errors if left to its own devices, so if we want to make better decisions in our personal lives and in society, we should be aware of “these biases and Looking for a solution. This is a powerful and important finding.”

Professor Kahneman delights in pointing out and explaining what he calls universal brain “quirks.” Behaviorists argue that the most important of these is loss aversion: for example, why does losing $100 hurt about twice as much as gaining does $100 bring happiness?

One of the many implications of the loss aversion theory suggests that it would be foolish to constantly check your stock portfolio, as the pain experienced in the stock market is likely to lead to overcaution and may even be self-defeating.

Loss aversion also explains why golfers make better putts for par than for birdies on a given hole. They work harder on their par putts because they desperately want to avoid a bogey, or losing a stroke.

Professor Kahneman is a gentle and unassuming person who not only welcomes debate on his ideas but also seeks help from his opponents and colleagues to refine his ideas.When asked who should be considered the “father” of behavioral economics, Professor Kahneman pointed to: University of Chicago economist Richard Thalerwas a young scholar (11 years his junior) whom he described in Nobel’s autobiography as his second most important professional friend after Professor Tversky.

“I am the father of behavioral economics,” Professor Kahneman admitted in a 2016 interview for this obituary at a restaurant near his home in lower Manhattan.

It was not until 1985 that this new school of thought made its first public appearance at a conference at the University of Chicago Business School, the bastion of traditional economics.

Professor Kahneman’s public reputation rests largely on his 2011 book Thinking, Fast and Slow appears on science and business bestseller lists.A commentator, essayist, mathematical statistician and former option merchant Nassim Nicholas Taleb, author of the influential non-probability book “The Black Swan,” combined Professor Kahneman’s “Reflections” with Adam Smith’s “The Wealth of Nations” and Sigmund Freud’s The Interpretation of Dreams is in the same league.

By Jim Holt at new york times book reviewhas been called “Thoughts” “an extraordinarily rich book: clear, profound, and full of intellectual surprises and self-help value.”

Shane Frederick, a professor at the Yale School of Management and a Kahneman protégé, said via email in 2016 that Professor Kahneman “helped transform economics into a true behavioral science, not just a is simply a mathematical exercise outlining the logical implications of a set of frequently occurring problems.” A simply untenable assumption. “

A full obituary will be posted soon.

Robert D. Hershey Jr.A longtime reporter who wrote about finance and economics for The Times died in January. Alex Traub Contributed reporting.

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