Daniel Kahneman

Daniel Kahneman is an Israeli-American psychologist. His fields of specialty include hedonic psychology, behavioral economics, decision-making and psychology of judgment.

Kahneman’s Early Years

Daniel Kahneman was born during a family visit to Tel Aviv on March 5, 1934. His mother and father had emigrated from Lithuania to Paris prior to his birth. They were there during the occupation by Nazi Germany during World War II. His father was seized by German forces as part of the capturing of French Jews, but was released a relatively short time later as the result of his employer’s intervention.

Even at the early age of 8 or 9, Daniel was intrigued by how the German soldiers related to the French Jews during this era. Many believe his fascination with the psychology of human behavior was born at that time. After fleeing Paris, his family was kept on the run for many years and his father subsequently passed away from diabetes in 1944. By 1948, his family had settled in British Palestine.

In 1954, Kahneman received a Bachelor of Science degree with psychology as his major from the Hebrew University of Jerusalem. He spent time working for the defense forces of Israel developing measures to evaluate military personnel for officers training. Following that time period, Kahneman attended the University of California, Berkeley.

Contributions to Psychology

Kahneman had several theories that has helped form and shape the field of psychology. For instance, his theory of a cognitive bias is a pattern of deviation in judgment of situations or individuals formed in an illogical manner. In other words, negative perception becomes reality. In social affairs this causes people to judge one another without objective input leading to irrationality.

He also formed the idea of behavioral economics, sometimes referred to as behavioral finance, which studies the effects of cognitive, social and emotional factors as it relates to decisions made about money. The consequences of this resource allocation are also looked at in terms of market prices and return on investment.

Similarly, Kahneman’s Prospect Theory is an economic theory that determines how people choose between probabilistic alternatives with risk factors. The bottom line on this thought is that people in general do not consider the overall outcome of such investments, but make them according to the potential for short term losses or gain.

Awards and Recognition

Kahneman’s work on the Prospect Theory led to his receiving the 2002 Nobel Memorial Prize in Economics. Later, in two consecutive years (2011 and 2012), he was named to the Bloomberg 50 Most Influential People in Global Finance.

In 2013, President Barack Obama announced Daniel Kahneman would receive the Presidential Medal of Freedom.

Kahneman’s Published Works

He is responsible for writing many papers beginning with the “Pupil Diameter and Load on Memory” in 1966, “Prospect Theory: An Analysis of Decisions Under Risk in 1979, and “Would You Be Happier if You were Richer? A Focusing Illusion” in 2006.

Kahneman has also had three books published, including Judgment Under Uncertainty: Heuristics and Biases (1982), Choices, Values and Frames (2000), and Thinking Fast and Slow (2011).