Elbe New Writ Eames .Book l Review Novembei 2Z 2011 Two Brains Running In the conflict between intuitive and rational decision-making, which side wins? BY JIM HOLT I N 2002, Daniel Kahneman won the Nobel in economic science. What made this unusual — indeed, unique in the history of the-prize — is that Kahneman is a psychologist. Specifically, he Is one-half of a pair of psychologists who. beginning in the early 19/05, set out to dismantle an entity long dear to economic theorists: that arch-rational deciiion maker known as Homo economic- •us, The other half of the dismantling duo. Antos lVersky, died In 19% at the age of 59. Had Tversky lived, he would certainly have shared the Nobel with Kahneman, his longtime collaborator and dear friend. Human Irrationality is Kahneman's great theme. That are essentially three phases to his career In the first, he and Tversky did a series of ingenious experiments that revealed twenty or so "cognitive baser — unconscious MMHG. FAST ASO SLOW By Daniel Kenna 499 pp. Fury. Straus & Giant. $30. errors of reasoning that distort our judgment of the world. Typical of these is the 'anchoring effect": our tendency to be influenced by irrelevant numbers that we happen to be exposed to. (In one experiment, for instance, experienced German judges were inclined to give a shoplifter a Ion ger sentence if they had just rolled a pair of dice loaded to give a high number.) In the second phase, Kahneman and TVersky showed that people making decisions under uncertain conditions do not behave in the way that eco nomic models have traditionally assumed; they do not "maximize utility' The two then d ....Iusa.d an alterna- tive account of decision making, one more faithful to hu- man psychology, which they called "prospect theory.' (It was for this achievement that Kalmernan was awarded the Nobel) In the third phase of his carver, mainly after the death of Wersky, Kaluwman has delved into %Sonic psychology': the scie