Dan Gilbert: Why we make bad decisions
Dan Gilbert, author of Stumbling on Happiness and a noted behavorial psychologist, explains in his TED talk how we are terribly accurate in making poor decisions.
Due to an array of cognitive biases and “lazy thinking”, on a daily basis people approach their lives with a faulty toolkit. It’s not that we fail to think through our decisions, rather it’s because we fail to apply proper logic to our thought processes. For example, people often overestimate the likelihood of being struck by lightning, while at the same time underestimating the chances of being struck by a unsuspecting motorist.
As a result of our “lazy thinking”, we consistently make value judgments based on past decisions, even when it’s contrary to our well-being! For example, when considering purchasing a trip to Hawaii, we will often (mistakenly) think back to that last trip we took to the Caribbean islands. Despite being two completely separate decisions each with their own set of pros and cons, we rely on past (although irrelevant) experiences for our decision-making in the present. Suddenly, a trip to Honolulu for $1500 seems less enticing when weighed against our $500 trip to St. Thomas!
Gilbert’s TED talk is chock full of examples of human irrationality and a great introduction to the emerging field of behavorial science.