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Behavioral Economics, Explained

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Behavioral Economics, Explained

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System One and System Two

Our brains have two "systems" that complement eachother, with their own capabilities, limitations and functions.

  • System One is fast, automated and precise, but can be easily tricked and has a small working window.
  • System Two is slower, can make complex thoughts achieved in a specific algorithm and takes control over it's brother when he needs to with it's long but limited attention buffer.


4.76K reads

System One

With it's lighting fast reactions, System One is present in almost every common situation. It's actions are sometimes unstoppable and can be trained to steal tasks from the second System.

Depending on the complexity, here are some tasks that System One makes:

  • Solves simple math like 2+2
  • Recognizes a good chess move (if you are a chess expert)
  • Reads words on big ads
  • Drives the car on a empty road
  • Makes you look in the direction of a sound


3.39K reads

System Two

Being slower but very powerful, this part of the brain can partialy suppes the other one while taking control on our body and forming logical and complex operations that need an attention span while being easily interrupted, like:

  • Solves complex math like 412* 525
  • Searching for a person
  • Controlling your behaviour
  • Completing a formular
  • Parking a car


3.11K reads

Attention and Effort

  • Our brain have a very limited attenion buffer. Our System Two can't give more than he has. We need to prioritize it's tasks to make it work efficiently.
  • We will use the minimal effort law, thinking as little as possible, unless we act on it with all our thinking energy
  • If we let our intuition take control, we may give a wrong response, making us repeat the process with a deeper search in our memory, this time calling for the Second System


2.9K reads

Priming the brain

Our mind can easily and unknowingly fall in a priming situation where certain things prepare ourself to take a certain decision based on association.

  • Looking at a pile of cash before a conversation can make us greedy
  • A bilboard with some imposing eyes can lower bad behaviour
  • Holding our finger in the mouth forms a smile that sparks a little bit of joy

Unfortunately, a strongly primed System One cand fool System Two into believing it's story.


2.85K reads

Daniel Kahneman

"The world makes much less sense than you think. The coherence comes mostly from the way your mind works.”"



3.45K reads



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