[Book cover of Kahneman’s book, “Thinking, Fast and Slow”. Photo Credit to Unsplash]

Daniel Kahneman, professor emeritus of Psychology at Princeton University and often regarded as the founder of the field of behavioral economics, passed away on March 27, 2024 at the age of 90, leaving behind a legacy of groundbreaking contributions to the field of economics.

Kahneman, despite having not taken any economic classes until later in his career, revolutionized the way economists think about decision-making and risk-taking, challenging the traditional notion that humans are rational actors.

Kahneman was born on March 5, 1934, in Tel Aviv, which was then part of Mandatory Palestine, to Lithuanian Jewish parents.

His early life was set in the backdrop of World War II, an experience that influenced his interest in the psychological mechanisms of decision-making and judgment.

Kahneman recounted an encounter with a German Schutzstaffel soldier in Vichy France who, not knowing Kahneman was Jewish, shared photos of his own child, around Kahneman’s age, with him.

For Kahneman, this experience solidified his belief from a young age that “people were endlessly complicated and interesting,” which later influenced his own work in the field of behavioral psychology.

At 17, Kahneman moved to modern day Palestine, where he graduated from Hebrew University with a degree in Psychology and a minor in Mathematics.

He described his experience with psychology as “wonderful” and that he continued to use the theories that he learned in his undergraduate courses in uncovering new economic theories.

After serving in the Israeli military, in 1958, Kahneman moved to the United States, where he received his PhD in Psychology from the University of California, Berkeley.

In 1969, Kahneman met Amos Tversky, who was to be his lifetime collaborator of 30 years in developing the field of behavioral economics. Together, they published a series of research papers on decision making and human judgment.

One of Kahneman and Tversky’s most notable discoveries was the role of instinct in individual decision making.

Prior to Kahneman and Tversky, the widely accepted theory was that human beings were rational actors in the process of making economic decisions; however, Kahneman and Tversky argued that even when the stakes are high, humans tend to make warped decisions.

Since all previous economic theories were grounded on the basis that individuals are rational actors, Kahneman and Tversky’s argument was a turning point for economic theory, earning them the 2002 Nobel Memorial Prize in Economic Sciences.

Their theory also gave rise to the field of behavioral economics, a field of study which analyzes how physiological and emotional factors are accounted for in one’s decision making process.

Kahneman was later awarded the Presidential Medal of Freedom in 2013, receiving praise and numerous accolades for his contributions to the fields of psychology and economics.

Eldar Shafir, a colleague of Kahneman and a professor of Behavioral Science and Public Policy, stated that “Many areas in the social sciences simply have not been the same since [Kahneman] arrived on the scene.”

Kahneman later moved to Princeton University, where he taught Psychology for 30 years.

He is survived by his two children, Michael Kahneman and Lenore Shoham.