A New Science of Morality, Part 7

Elizabeth Phelps [9.17.10]


In spite of these beliefs I do think about decisions as reasoned or instinctual when I'm thinking about them for myself. And this has obviously been a very powerful way of thinking about how we do thingsĀ  because it goes back to earliest written thoughts. We have reason, we have emotion, and these two things can compete. And some are unique to humans and others are shared with other species.

And economists, when thinking about decisions, have also adopted what we call a dual system approach. This is obviously a different dual system approach and here I'm focusing mostly on Kahneman's System 1 and System 2. As probably everybody in this room knows Kahneman and Tversky showed that there were a number of ways in which we make decisions that didn't seem to be completely consistent with classical economic theory and easy to explain. And they proposed Prospect Theory and suggested that we actually have two systems we use when making decisions, one of which we call reason, one of which we call intuition.

Kahneman didn't say emotion. He didn't equate emotion with intuition.