The Irrationality of Human Decision Making

22 July 2010

我们本周的主题是人类决策的非理性。作为哲学家,我相信约翰和我愿意相信我们会以完全理性的方式做出决定。事实上,我确信大多数人都认为自己是相当理性的决策者。完全理性的决策将如何进行?首先,你要决定你想要什么,以及你有多想要它们。其次,你要调查得到你想要的东西的选项。第三,你需要评估每种方案的好处和坏处。最后但并非最不重要的一点是,你会选择上行最大或下行最小的选项,这取决于你是厌恶风险还是追求风险。这真的很简单。

Decades of psychological research has shown, though, that although philosophers may be paragons of rationality -- ahem, ahen – in fact most people (and probably most philosophers too) are pretty irrational in their decision-making. People go wrong at every turn. We aren’t so good at figuring out what we want. Our preferences aren’t very stable or coherent. We’re bad at assessing risks and reward. You name it, when it comes to decision making, we’re bad at it.

Here’s a little game you can play with a partner that helps illustrate how irrational we can be. Let’s call it Sellers and Choosers. If you’re reading this alone and you want to play along, go get a partner now and let’s play the game together. I’ll be the referee. I’ve got two mugs – one for you, one for your partner. The mugs are exactly alike. I’m just going to flat out give you one of the mugs. (I can’t really do that over the internet just yet. But use your imagination and play along.) Anyway, the mug is yours to keep. It’s a really beautiful mug and very well made. Or, if you like, you can sell it. No doubt you’d be willing to sell the mug for the right price. So go ahead, write down the price at which you’d be willing to sell your lovely little mug.

Now as for your partner. I’m going to offer your partner a choice. I’m not going to flat out give her (or him) the identical mug. She or he has to choose. She has to choose between an identical mug and a sum of money. How much money, you ask? Well, I’ve written an amount of money on the bottom of the mug. She doesn’t get to see it. Instead what she has to do is write down an amount of money such that if she had a choice between the mug and the money, the choice between the two would be a wash. She gets the mug only if the price she writes down as a fair price for the mug is higher than price I’ve written on the bottom of the mug.

You may be wondering going with this and what it has to do with irrational decision-making. Don’t worry, the punch line is about to come. Here’s the thing, suppose we run this little experiment thousands of times and put people in different roles – sometimes the role of Seller and sometimes in the role of a Chooser. You know what we find? Well we find that people in the role of the seller place a significantly higher price – like more than twice the price -- on the mug than people in the role of the chooser do. What that means is that if the mug is already yours (and you have to set a sell price) you’ll think it’s worth a lot more than a similar mug that isn’t yet yours (on which you have to place a “willing to purchase it” price.)

One way to think of this is as an instance of loss aversion. You’ve got your precious mug in hand and you don’t want to lose it. It means a lot to you. And so you set a very high price on it. That is, people tend to value things they already have and might lose, much more highly than things they don’t have, but could get.

That seems pretty irrational, doesn’t it? Go back to what I was saying earlier about calculating upside benefits and downside costs. It looks like those calculations are highly skewed, depending on whether we’re talking about gains or losses. That doesn’t make any sense.

我们只是看了一个人类明显非理性的小例子。有成百上千的实验证明人们在做决定的时候是非常非理性的。幸运的是,我们这周请来了一位世界顶尖的人类非理性研究专家做客。丹·艾瑞里,畅销书《可预测的非理性:塑造我们决定的隐藏力量》的作者。

By the way, Ariely has a follow up book out – The Upside of Irrationality: The Unexpected Benefits of Defying Logic at Work and at Home. We’d love to have him back on the show to talk about the new book. This week’s episode, though, is less about the upside of irrationality than the downside. But I think one can get a glimmer of how irrationality might have an upside by considering last week’s topic – loyalty. From pure self-centered cost-benefit analysis, it can be hard to make sense of loyalty. You might even call loyalty a form of irrationality. But without loyalty (and trust) all kinds of relationships wouldn’t be possible. So if loyalty is a form of irrationality, it may be a darned good thing that we are irrational in that way. But that’s a topic for another show.

Comments(10)


Guest's picture

Guest

Thursday, July 22, 2010 -- 5:00 PM

Interesting exercise. The first step in the pro

Interesting exercise.
The first step in the process that Ken describes seems by far the most critical: what is the goal or "want," and what values does it reflect? If my goals are to proclaim my affluence to the world and bully my way through traffic, I might decide to buy a Hummer (R.I.P.!) despite the obvious conflicts with other values (humility, reduction of resource consumption and carbon footprint, traffic safety and so forth). But I could achieve the same goals by other means, like buying a supersized Ford Intimidator or something similar. The decision about a suitable means seems more amenable to rational analysis, and less laden with emotional baggage, than the initial "want" calculation.
另一个例子:如果一个社会决定确保其100%的人口获得足够的医疗保健,“单一付款人”系统很快就会成为实现这一目标的最合理手段(尽管其他方案可能值得考虑)。但当其他价值观(比如所谓的节省纳税人的钱和“个人责任”)发生冲突时,手段分析导致了今年出现的那种香肠立法。
This is not to say that the decision about means is unimportant and always rational, but that choice often follows from the fundamental decision about ends. Or so it seems to me at the moment.
I look forward to downloading the podcast.

Guest's picture

Guest

Friday, July 23, 2010 -- 5:00 PM

Intriguing. This may change the way I see my boss

Intriguing. This may change the way I see my boss; what he values is my production, because it is his responsibility; my happiness is not his, so he assumes it can go away without any change in production.

Guest's picture

Guest

Monday, July 26, 2010 -- 5:00 PM

Through out our whole life we are seeking out the

Through out our whole life we are seeking out the thing which we exactly want but fail to identify that. If we never understand ourselves then how could we judge that we are rational? It?s like illusions.

Guest's picture

Guest

Tuesday, July 27, 2010 -- 5:00 PM

This is an area which is desperate need of some in

这是一个迫切需要一些逻辑入门的领域,以做出一些简单的区分和观点。以下是我认为哲学家们可以做出的贡献,从他们对英语翻译的理解开始,然后转化为实质性的含义。
重述“如果”、“然后”和“重大意义”。
If we want a simply formal model of the english if, then, our formal translation is uniquely satisfied by material implication if:
a) the translation is truth functional, doesn't depend on the semantic parts in "if a, then b."
b) the translation preserves two formal features of the english if, then.
1) if then is reflexive.
2) if then is not sysmetric.
c) finally, the truth value for if then when a is true and b is false is false.
We translate the english if then, such that it is a truth functional translation which preserves several formal features.
因此,我们既发现了物质蕴涵的悖论,也发现即使是聪明的人也无法在沃森的选择任务中找到物质蕴涵。
These two features, some odd formal paradoxes and the inability of english users to recognize the formal translation are good analogues to what is happening in preference theory. Here is why.
Preference Theory
We start with with the english relation "x is preferred to y" or the choices "x is chosen over y" and translate the preference talk or choices into a formal structure, a formal translation.
But unlike if then, this translation depends upon us first identifying a body of choices or preferences that appear reasonable.
然后,给定特定的形式考虑比如选择理论中的属性,我们可以转换这些选择并确定它们在形式上是否合理。
如果不是这样,我们就有两种不同的选择:a)最初的选择模式不合理,或b)我们的形式理性概念必须修改。(这些困难的选择中有两个是脱离理性选择理论的基础。)
What most economists fail to do is to specify if the alleged failure shows:
a) the translation was not truth functional, and the preference talk lacks certain formal characteristics. Framing examples come to mind here.
b) the translation or model was truth functional, but the irrationality in model shows that we were mistaken about the original choice talk being reasonable. We have now found something new. The money pump arguments comet to mind here.
c) the translation failed, much the same way english users don't perceive themselves to be using material implication.
D)最初的选择谈话是出于合理的行为,但为了适应这种翻译,形式上的考虑必须改变。在这种背景下,值得注意的是,大多数情境相关选择的例子都不能被集合论选择理论所捕获。如果a的加入改变了b和c的关系,那么b和c的关系就不是有序对。
Getting an economist to hew to one of these positions would be useful. (Not withstanding, I do like Ariely's experiments because they are fresh - but if someone is predictable in their choices, then they are maximizing something.)

Guest's picture

Guest

Thursday, August 5, 2010 -- 5:00 PM

Most people make decisions not based on reality, b

Most people make decisions not based on reality, but based on fear or emotions. That is where the problems lie. If we make decisions based on what is real, then good decisions are made.

Guest's picture

Guest

Saturday, August 7, 2010 -- 5:00 PM

Is not the part of the excitement being a human th

Is not the part of the excitement being a human that we are irrational,bit odd,and make decisions with emotions and depending on our mood at the time can be great ideas or really bad-

N's picture

N

Tuesday, August 10, 2010 -- 5:00 PM

我不觉得这有什么不合理的。We know

我不觉得这有什么不合理的。对于我们拥有的东西,我们知道的比我们没有的东西更多(在这个杯子的例子中,用过它的人会比只看到过它的人知道更多),所以在我看来,坚持你所拥有和知道的东西,而不是为了你没有的东西而放弃一些东西,似乎是合乎逻辑的。

Harold G. Neuman's picture

Harold G. Neuman

Monday, August 16, 2010 -- 5:00 PM

Of course---we all make rational decisions. We thi

Of course---we all make rational decisions. We think. But those rational decisions are based upon our world views---what we think rational may not translate well in some other country. This is why such concepts as democracy fail in those places where it has never been embraced, much less understood. I do not need to elaborate upon current dilemmas. I am only beginning to learn the value of brevity, taught to me by an older friend.
Might be back---maybe not.
HGN.

Guest's picture

Guest

Friday, August 27, 2010 -- 5:00 PM

Very few of us are trained to think properly. Few

Very few of us are trained to think properly. Few of us get any psychology and fewer any neuroscience.
For starters, many choke on poor language skills. Parsing errors are ubiquitous. Minimizing ambiguity is both science and art.
然后再加上大量令人食欲大增的逻辑谬误。
Finally, toss in a wide variety of half-baked heuristics, cognitive biases, and off-label implicit associations and nobody can agree on the basic facts much less digest what they might mean.
In this internet + Google world there is no excuse not to shift more k-12 curriculum towards linguistic and reasoning skills--from facts to fact checking.
Poor Richard
Poor Richard's Almanack 2010

Harold G. Neuman's picture

Harold G. Neuman

Sunday, October 3, 2010 -- 5:00 PM

sum, ergo, sum. Go ask Alice, I think she'll know.

sum, ergo, sum. Go ask Alice, I think she'll know...