Daniel Kaheman was soon joined in his work on System 1 and System 2, by a fellow Israeli, Dan Ariely. While Kahneman (and Tversky) won the Nobel Prize, Ariely had the best-selling book (Predictably Irrational) and did much to bring behavioral economics into the mainstream of management and the decision sciences. Ariely emphasizes the ways in which System 1 thinking operates though a set of fast decision-making processes, called heuristics.
The Societal Invention of Heuristics
Social constructivism has offered Western thought quite a challenge (Berger and Luckmann, 1966). Advocates believe that we construct our own social realities, based in large part on societal inventions—the traditions and needs of culture and the social-economic context in which we find ourselves. There are no universal truths or principles, nor are there any global models of justice or order that can be applied in all settings, at all times, with all people. While this constructivist perspective is often considered a product of late 20th century thought (at least in the Western world) the early versions of social constructivism can be traced back to the anthropology and sociology of the early 20th century. Reports from these disciplines documented radically different perspectives operating in many non-western societies and cultures regarding the nature of reality and ways in which members of diverse communities view themselves and their interpersonal and group relationships.
This initial version of constructivism is essentially static, for these social constructions are based on deeply rooted beliefs and assumptions of specific societies and cultures. There are specific communities that espouse their own unique ways of knowing. These communities may consist of people who are living together or people who are working together. Organizations create their own culture and their own constructions of reality. The leaders of these organizations are among those most responsible for reinforcing the tangible image of money as the primary measuring stick of success.
The bottom line becomes an economic heuristic that is as powerful as such heuristics as recency and primacy. Specific ways of knowing and ways of determining economic “worth” and “success” are based on and reinforced by the community and do not allow for significant divergence among those living in the community. Furthermore, while these ways of knowing may themselves change over time and in differing situations, such changes are gradual and often not noticed for many years.
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