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How we make choices

Congregations and the psychology of risk

Psychologists Daniel Kahneman and Amos Tversky have challenged the notion that humans generally make rational and informed economic choices. They argue that we make choices based less on a carefully reasoned assessment of outcomes and more on perceived risks of loss and gain. Moreover, they say, these choices are shaped by forces beyond our conscious awareness and are outside our control.

Kahneman won the Nobel Memorial Prize for economics in 2002 for his work in prospect theory, which describes the way people manage risk and uncertainty. Kahneman’s 2011 book Thinking, Fast and Slow explains ramifications of the theory and offers insights that are startling and useful for people who aren’t economists—including those who lead congregations.


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