Tag Archives: irrationality

Standard economic theory assumes that humans behave fully rationally and are able to objectively calculate the value (or cost) of the different choices they are presented with. In fact, we pride ourselves on our rationality. Different from the animals, we humans have the unique capacity for logical thought and rational decision making. Or do we? According to behavioral economist Dan Ariely, we should be less proud of ourselves. In his entertaining book Predictably Irrational, Ariely...

At some point, everyone reaches a crossroads in life: Do you decide to take that job and move to a new country, or stay put? Should you become a parent, or continue your life unencumbered by the needs of children? Instinctively, we try to make these decisions by projecting ourselves into the future, trying to imagine which choice will make us happier. Perhaps we seek counsel or weigh up evidence. We might write out a pro/con list. What we are doing, ultimately, is trying to figure out...