Why We Make Bad Decisions

Ted Talks are so fascinating! All the speakers are so articulate and interesting. For example, I recently watched Dan Gilbert’s Ted Talk about why we make bad decisions. Gilbert is a psychologist and previous college drop out, who found his passion for human decision making in Community College. His book Stumbling On Happiness is full of humor and wit while being interesting.

The Ted Talk centers around the idea that humans are bad at making decisions because we want what we want when we want it. To make matters worse, we always compare what we want to what is next to it. For example, if we see a 55 dollar shirt, we may think that is expensive. However, if it is on display next to a similar shirt that costs 155, it does not seem that bad anymore.

 

The Ted Talk centers around the idea that humans are bad at making decisions because we want what we want when we want it. To make matters worse, we always compare what we want to what is next to it. For example, if we see a 55 dollar shirt, we may think that is expensive. However, if it is on display next to a similar shirt that costs 155, it does not seem that bad anymore.

 

iPhone-X-event-apple-watch-prices.jpg
Examples of Apple using this technique to try to get to buy those watches

 

Another example the Dr. Gilbert introduced was how time affects our decisions. For example, do you want 50 dollars now or 60 dollars in a month? Often people say 50 dollars now. Yet, if you change the time values to be 50 dollars in 13 months or 60 dollars in 14 months, humans are more likely to say 60 dollars in 14 months because if they are already waiting 13 months, they might as well wait for another one. Yet, at the end of the day, they are still making 10 dollars more by waiting the same amount of time, one extra month.

So, why exactly are we so bad at making decisions?  Dr. Gilbert makes the argument we are so bad at making decisions because we are not living in a world designed for the kinds of decisions we have to make on a daily basis. Humans are programmed to have 3 focuses: food, sleep, having kids. Now, this has changed. We are now living in a world with complex technology, schools, and social systems that did not previously exist. In this changing world, it is hard to change our innate selves to adapt and advertisers, sellers, and companies monopolize on this.

The Ted Talk ended by explaining how our own inability to make decisions is our most significant human flaw., “We underestimated the odds of our future pains and overestimated the values of our present pleasures.”

So 10,000 years from now if humans do not exist anymore it is because of our poor decisions. I think that sentence foreshadows a lot, especially in light of global warming.

Feel free to watch the Ted Talk here:

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