Intelligence, Control, Rationality
One research is done on the four-year-old children. They have given one marshmallow and told them to eat it anytime but if they wait for the 15 minutes then they will get one more.
Ten or fifteen years later, a large gap had opened between those who had resisted temptation and those who had not. Those who show higher self-control, those also have scored higher in intelligence test during the adult time.
Stanovich has talked about two minds of system 2. One of these minds (he calls it algorithmic) deals with slow thinking and demanding computation. These measures calculation skills and intelligence. Second is rational thinking.
The Associative Machine
When we listen or see or read something disgusting than our mind immediately connects it and start preparing pictures of it. The mind will start associating a word with many different elements and we temporarily fall under those emotions. If we have heard the highway accident, then our mind starts preparing some pictures, incidents of it and we stay away for some period from it. This concept is known as associative activation.
These responses occurred quickly, automatically and effortlessly. System 1 shows those words as a reality and our body starts reacting on it. These words activate some thoughts, that activates other thoughts. When we have read or listened to the news of recession in the automobile industry in the year 2019. Our mind starts creating an image of it so that we stay away from investing in the automobile industry. But if we use system 2 and make a rational decision then scenario can be entirely different for us.
The Marvels of Priming
When we see some puzzling things then we connect it with recent activities which we have performed or something is in our mind currently. If you have recently seen or heard the word EAT, you are temporarily more likely to complete the word fragment SO_P as SOUP than as SOAP. The opposite would happen, of course, if you had just seen WASH. We call this a priming effect and say that the idea of EAT primes the idea of SOUP, and that WASH primes SOAP.
If you were primed to think of old age, you would tend to act old, and acting old would reinforce the thought of old age. So that we behave the way we get primed.
Primes That Guide Us
Our surroundings are also responsible for build primes in us. For example, if we surrounded by money-minded people, our behaviour starts becoming money minded. What we see, listens are also affects our behaviour.
System 1 provides the impressions that often turn into your beliefs, and is the source of the impulses that often become your choices and your actions.
System 1 creates a story and system 2 believes it. So that later on it becomes our belief.
When we surrounded by short term oriented, traders mentality, lazy, etc. then system 1 starts creating a story and our behaviour starts forming like our surroundings. Thus, if you want to become an investor then you have to keep distance with people who have a trader mindset otherwise trading will get priming to our mind and we will get diverted towards trading activities.
Whether we are conscious or not, there are lots of calculations and thinking of running in our brain. These all done through system 1. These calculations through system 1 keep on assessing various situations, survival, threats etc.
These works in a range of easy and strain.
Easy is a sign that things are going well—no threats, no major news, no need to redirect attention or mobilize effort. Strained indicates that a problem exists, which will require the increased mobilization of System 2.
Cognitive ease happens when we are in a good mood, sentence which we read is in clear fonts, proper colour, etc. and reversely cognitive strain happens when we are in a bad mood, sentence which we read are poorly written, not clear fonts, poor colour combination, etc.
When we are into cognitive ease state, we are in good mood, we believe what we hear, trust intuition, be creative etc. But when we are into cognitive strain state then we are effortful, suspicious, feel less comfortable, make fewer errors, etc. When we have invested in a particular company and the price of it keeps raising, we start staying in cognitive ease so that we do not focus on the fundamental side. Whereas when prices not raising then only people get cognitive strain and focus on fundamental parts.
This entire series will be review with various examples from books which are “Thinking, Fast and Slow” and “The Art of Thinking Clearly“.