Nobel Prize laureate and pioneering economist Daniel Kahneman has died at the age of 90.
Professor Kahneman, whose passing was announced on Wednesday, was an Israeli-American psychologist and Nobel-winning developer of the field of behavioural economics.
His application of psychology to the study of economics throughout the 1970s led to groundbreaking discoveries about human judgement and economic decision-making, for which he was awarded the 2002 Nobel Prize in Economic Sciences.
Kahneman collaborated closely with cognitive psychologist Amos Tversky to analyse the biases inherent to our processes of judgement, contradicting traditional economics which assumes that humans generally behave in fully rational manners. He established the psychological and economic concept of loss aversion theory, a cognitive bias which describes why the pain of loss is psychologically more powerful than the pleasure of winning.
Psychologist and author Steven Pinker told the Guardian in 2014 that Kahneman’s central message “could not be more important, namely, that human reason left to its own devices is apt to engage in a number of fallacies and systematic errors, so if we want to make better decisions in our personal lives and as a society, we ought to be aware of these biases and seek workarounds.”
Behavioural economist Richard Thaler called Kahneman’s work “one of the most important accomplishments of 20th century science,” adding: “It's hard to think of any psychologist whose work has influenced so many different fields.”
Daniel Kahneman. (Photo by Andreas Rentz/Getty Images for Burda Media)
Kahneman was born in Tel Aviv, Mandatory Palestine in 1934 to Lithuanian-Jewish parents who were visiting extended family in what later became the Jewish state. He grew up in Paris, where his parents had immigrated in the 1920s and where the family remained until the mid 1940s when the family fled Nazi persecution and settled in Israel.
Kahneman pondered his early interest in psychology in his 2002 Nobel Prize autobiography, writing: “I will never know if my vocation as a psychologist was a result of my early exposure to interesting gossip, or whether my interest in gossip was an indication of a budding vocation. Like many other Jews, I suppose, I grew up in a world that consisted exclusively of people and words, and most of the words were about people.”
In this same autobiography, Kahneman recalled a poignant moment during his childhood in Nazi-occupied Paris which illustrated the rich complexity of each individual: “Jews were required to wear the Star of David and to obey a 6 pm curfew. I had gone to play with a Christian friend and had stayed too late. I turned my brown sweater inside out to walk the few blocks home. As I was walking down an empty street, I saw a German soldier approaching. He was wearing the black uniform that I had been told to fear more than others – the one worn by specially recruited SS soldiers.
“As I came closer to him, trying to walk fast, I noticed that he was looking at me intently. Then he beckoned me over, picked me up, and hugged me. I was terrified that he would notice the star inside my sweater. He was speaking to me with great emotion, in German. When he put me down, he opened his wallet, showed me a picture of a boy, and gave me some money. I went home more certain than ever that my mother was right: people were endlessly complicated and interesting.”
US President Barack Obama presents the Presidential Medal of Freedom to psychologist Daniel Kahneman during a ceremony in the East Room of the White House on November 20, 2013 in Washington, DC. The Medal of Freedom is the country's highest civilian honor. AFP PHOTO/Mandel NGAN (Photo credit should read MANDEL NGAN/AFP via Getty Images)
Kahneman was awarded the Presidential Medal of Freedom by former President Barack Obama in 2013 and was named by Bloomberg as one of the 50 most influential people in global finance in both 2011 and 2012.
His passing was announced by his partner Barbara Tversky on Wednesday.
