The Undoing Project: Summary & Review

the undoing project book cover

The Undoing Project tells the story of the friendship between Daniel Kahneman and Amos Tversky, the duo who brought psychology (back) into economics and deepened our understanding of psychology, economics, and decision-making.

The Undoing Project – Summary

About the Protagonists: Kahneman and Tversky are psychology researchers who have long worked together and who helped usher in a new era where economics overlaps with psychology (and how could it not!).

About the Author: Michael Lewis, the author, is an expert storyteller, and he seeks to mix science with the friendship and feelings that ran between Kahneman and Tversky.

Injecting Psychology Into Economics

The narrative often goes that before behavioral economics, people looked at humans as perfectly rational and all doing rational decisions (the homo economicus theory).

That is not completely true: the early economists often tempered their economic models and theories with psychology and sociology.

It is true however that in the post-war Western world, most economics was based on the homo economicus paradigm which saw men as perfectly rational.
And it’s that mistaken assumption that Kahneman and Tversky proved wrong beyond any reasonable doubt.

No, humans are not rational.
They are quite irrational instead and, sometimes, they are predictably so (also read: Predictably Irrational by Dan Ariely).

One crucial reason why humans are irrational is that we don’t use all the information available but instead use heuristics to jump to (often wrong) conclusions.

These are some of the most important heuristics:

Heuristics Of The Mind

Heuristics are cognitive shortcuts that we use to make decisions. 
You can check out Daniel Kahneman’s own book “Thinking Fast and Slow” for more, but here is what stood out in “The Undoing Project“:

  • Availability: we think that what’s easier to remember is also more likely to happen (but that’s seldom the case)
  • Endowment bias:  once you take ownership of something, you value it more and you tend to focus more on the positives 
  • Hindsight bias: we rationalize events after they happen and we assign them meaning and causalities where there is probably much more randomness
  • Regression to the mean: trainer of Israeli fighter pilots believed that praise was ineffective because pilots performed more poorly right after praise, and they believed that criticism was effective because pilots would perform better after criticism. What was happening was a simple regression to the mean (ie.: it’s unlikely one will perform exceptionally poorly or exceptionally well several times in a row)
  • Framing: how you pose a question will influence the answer (for example if you say “10% chances of loss” VS “90% chances of victory”)
  • Memory distortions: we remember mostly how things begin and our memories are mostly dependent on how things end. What happens in the middle matters much less (for more details read “Pre-Suasion” and “Influence” by Cialdini)
  • Loss aversion: we are more sensitive to losses and lacks than we are to gains and what we already have (but it inverts in the case of very long odds, which is why we buy insurance and lottery tickets).
    There are evolutionary reasons for that as Tversky said:

Happy species endowed with infinite appreciation of pleasures and low sensitivity to pain would probably not survive the evolutionary battle
Amos Tversky 

For more on heuristics also check the wonderful:

We Maximize Mental Happiness, Not Utility

When people make decisions they don’t seek to maximize chances of success (utility) but they seek to maximize emotional states (regret and happiness).

We owe that wisdom to Kahneman and Tversky who devised studies to measure our regret-maximizing tendencies.

These are a few tenets of regret-avoidance:

  • We regret what we have done more than what we have not done (that can help explain decision paralysis)
  • We regret more when we chose to do something different or “out of the ordinary”
  • We regret our own actions more than the actions of others
  • We regret losses far more when we know we were close to succeeding

Why so?
Because, Michael Lewis speculates, there is “less to undo” when we were close to achieving our goal and so it becomes easier to think of all the small details we could have changed to succeed.

How Regret Impacts our Lives

It was particularly interesting to notice that Kanheman resisted changing flight tickets in fear of something bad which could happen.
Basically, he was trying to avoid regret by anticipating regret.

Crazy stuff, and that’s why to live a better life we must learn our biases, and then eradicate them or work around them.

What Looks Random Seems More Random

The birth order of children’s gender (B for boy, G for girl) in the following two sequences is equally likely:

  • G B G B B G
  • B G B B B B

But people would say the first order is more likely because the second sequence, with five boys, does not look like the proportion in the general population.

And when it comes to birth order, these two sequences also have the same likelihood:

  • B B B G G G
  • G B B G B G

But again most people said the second was more likely.

Gambler’s Fallacy

I still remember many years ago a friend of mine saying that flying was safer right after a plane crash.

Yeah, sure!

That’s an example of a gambler’s fallacy, such as believing that things “even themselves out by themselves”.
For the same reason, people believe that after a coin lands on “head”, then it’s more likely to land on “tail” right after.

Obviously, that’s not the case because the coin does not have its own initiative to willingly even things out.

Large Numbers VS Small Numbers

Most people believe that the law of large numbers applies to small numbers as well.
Even trained scientists often fail to understand that smaller populations are more likely to exhibit more variations and extremes and that the smaller the sample, the less likely it was that it would mirror the general population.

This is funny since generalizing the results of small populations is one of Kahneman’s major mistakes when it came to priming (also read: pop psychology myths).

Don’t Jump to Conclusions

This one always drives me crazy.

I can accept it from random people, but when my own parents jump to conclusions through (likely meaningless) correlations I struggle to hold back.

Seeing correlations where there might be none can give rise to whole processes of over-prescription.
For example, a doctor prescribes antibiotics, sees that the patient improves, and keeps prescribing antibiotics.

But the patients would have likely improved anyway. 
And for all we know, they might have improved at the exact same rate.

As Darren Huff says in “How to Lie With Statistics“:

A cold properly treated will disappear in 7 days. Left on its own, it will fester for a whole week

We Need Evidence-Based Medicine

Because of the above reason and because of all our irrational shortcuts, we need more evidence-based medicine and more evidence-based decision-making.

It’s been documented indeed that in the past doctors kept suppressing arrhythmia in the belief that it helped.
Turned out, research showed that it harmed patients.

Our Irrational Linking of Similarities

We have interesting and irrational ways of comparing and grouping things and it is not compared to the actual distance between things and concepts as it was previously believed.

New York VS Tel Aviv

For example, people think that 103 is similar to 100, but 100 is not similar to 103.
And people think that Tel Aviv is a bit like New York but New York is not like Tel Aviv.

What happened was that New York had more features in people’s minds so Tel Aviv matched New York.
But people had few features of Tel Aviv in mind so New York didn’t match Tel Aviv nearly as well.

We Compare by Comparing Features

When people link or choose, they compare features. 
And features can become more or less prominent depending on how you present them.
The removal of features is also a feature, which is why a 3-legged dog is more similar to another 3-legged dog than to a 4-legged dog in spite of a 3-legged dog sharing the same feature with a 4-legged dog.

Because we only compare features that first come to our mind, it’s possible that we choose coffee over tea and tea over chocolate but then prefer chocolate over coffee.

Groups Increase Alikeness

And we think that a banana is similar to an apple not because they’re really similar, but because we grouped them into the “fruits” category.

There Are No Heroes: Only Struggling Human Beings

If you hear today the name of Daniel Kahneman you will probably think of an ambitious, super smart, best-in-class scientist.

Kahneman is a sacred cow in psychology.
And he probably deserves to be.

But what I liked most about “The Undoing Project” is that it puts scientific achievements back into perspective.
It’s the history of two humans, just like everyone else. 

And they had their own base feelings of resentment, jealousy, and envy, and, as well, were not very good at coping with the power dynamics between them.

Here is what Kahneman said, referring to their straining relationship:

I am very much in his shadow in a way that is not representative of our interaction . . . There is envy! It’s just disturbing. I hate the feeling of envy . . . I am maybe saying too much now

He didn’t say too much, in my opinion; he just said the truth.
But sure as hell, when you say, “I am maybe saying too much now,” then everyone thinks you are.

the undoing project book cover

Wisdom Pills

  • Don’t fantasize and envision what can really happen

Daniel Kahneman has a rule of not fantasizing about achieving what he can actually achieve.
Because when he fantasizes about it, he loses his drive to make it happen.

You might want to consider doing the same.

  • Successful people are successful in all fields

Beginning his career Kahneman was tasked with looking for the different personalities that would be successful in the different fighting forces.

But there were no “pilots personalities” or “infantry personalities”.
What made one person successful in one branch also made him successful somewhere else, including in business.

Notice though that the results of the most successful personalities were only loosely correlated with education and intelligence.


On the games that people play in academia:

And yet, the titles that he and Danny put on the papers were inscrutable.
They had to play, at least in the beginning, by the rules of the academic game, and in that game, it wasn’t quite respectable to be easily understood.

The author then goes on to poke fun at the titles that researchers choose, and he’s actually on point with that.

On human irrationality and heuristic-driven thinking:

Man is a deterministic device thrown into a probabilistic universe. In this match, surprises are expected. 

On positive thinking (or at least, avoiding negative thinking):

When you are a pessimist and the bad thing happens, you live it twice, Amos

On evolutionary psychology as a science (please note: I wholly disagree with that quote):

Listen to evolutionary psychologists long enough, and you stop believing in evolutionary psychology

On hindsight bias and complexity:

This ‘ability’ to explain that which we cannot predict represents an important flaw in our reasoning.
It leads us to believe that there is a less uncertain world than there actually is.
The fact that we couldn’t (predict the future) is taken as an indication of our limited intelligence rather than of the uncertainty that is in the world

A new definition of nerd:

He suggested a new definition of the nerd: a person who knows his own mind well enough to mistrust it

On risk aversion:

Risk aversion amounts to a fee that people pay, willingly, to avoid regret. A regret premium


  • A bit disjointed: biography, psychology, or history of friendship?

I found “The Undoing Project” to be a bit disjointed. If it wanted to sit in between a biography, a psychology text, and the history of a friendship from its emotional point of view, then it did so a bit awkwardly.

And it’s not Michael Lewis fault; it’s simply very difficult to combine all three.

  • War stories slightly biased

As I explained in my reviews of “Extreme Ownership” and “The Dichotomy of Leadership“, I am not a big fan of people profiting from wars and/or telling war stories from a one-sided perspective.

The Undoing Project” made me feel like it spoke of wars with a slight pro-Israel bias.

  • The story of a petty race towards the Nobel Prize?

“The Undoing Project” feels like hyping the Nobel Prize. As if the Nobel prize was all that mattered, not the research or the deeper understanding of human nature.

I find it petty and distasteful.

  • The frog in boiling water myth

It’s a small detail, but I can’t stand fake popular myths, and Michael Lewis perpetrates the lie of the frog in boiling water (read more in: self-help lies).


As a social psychologist who loves psychology, sociology, and understanding people, I thoroughly enjoyed “The Undoing Project“.

Some of the highlights for me:

  • Good psychology wisdom
  • Great humor
  • It reminded us all that we’re all humans and we must work to overcome envy and jealousy
  • It reminds us all that relationships can be difficult, but they can be easy if know how to work on them

Overall, there are far more “pros” than “cons”.

The Undoing Project Review

I have long been interested in the intersection of economics and psychology.

My master’s thesis was a social-psychology-focused exploration of the 2007-2008 financial crisis (extract here and the Italian version of the behavioral economics research on 

So I was really looking forward to listening to “The Undoing Project“. And I wasn’t to be disappointed.

The Undoing Project” reads a bit like a biography, somewhat like a novel and sprinkles well-researched concepts of behavioral finance all over.

Somebody might not like that “a bit of everything” also means “nothing in-depth”.

But if you have the remotest interest in psychology and/or behavioral economics, then “The Undoing Project” is a must-read.

Check the

or get the book on Amazon

Scroll to Top