Being rational all the time isn't going to do you any favors

[Turbineguy]

When Daniel Kahneman and Amos Tversky published their paper on Prospect Theory in 1979, few people could have imagined the long-term implications.

The findings were still elementary at the time, and they hadn’t yet developed a full framework around it, but the seeds of change were there.

They had discovered that contrary to the model of decision-making espoused by modern economic theory, in real life, humans didn’t make rational decisions based on outcome, but rather, they thought in terms of gains and losses using mental heuristics that often led them to sub-optimal choices.

In short, we are irrational agents by nature, and it tends to get in our way.

Today, a whole new field of research—which we call behavioral economics—has been established to better understand this phenomenon.

We now know that our brain has certain cognitive biases that stop us from seeing the world as it really is and interacting with it in a way that will maximally benefit us. Many of these biases are a product of our emotional judgments; we are too quick to trust our intuition.

https://qz.com/1313944/being-rational-all-the-time-isnt-going-to-do-you-any-favors/

This looks very interesting. I was introduced to Dr. Kahneman and Dr. Tversky's works through the book Choices, Values and Frames and have included some of this material in my management classes.

[elleng]

1. Trying to figure it out gets in the way of 'economists,' imo.

[Igel]

2. No, but being irrational doesn't, either.

I prefer to try to be rational all the time, allowing for lapses and times when something is so outrageously (and logically) outrageous that irrationality is the appropriate response.

The bigger the purpose, the more rationality is important.

I find that the "quick" thinking approach is very common among my students. And if I can get them to slow down, read the question, read the answers, take a few seconds to ponder the answers (not "count to 10" because then all their cognitive capacity goes towards counting to 10) they do much better on tests.

A student will swear he got a good grade. When I go over the test with my class (it's high school, so we do that) a lot of the students say, "That's the answer I put! How'd I get it wrong." Then I have to take time to show them their tests and where they circled or bubbled the quick and easy answer. But when it's on screen and they can't answer at once but need to think about it, they arrive at the correct answer with such ease that they assume that's the answer they must have chosen.