This is the subjective height — is in part how terrorism actually works to frighten us, Surely the kinds of play that at least American media give to — Here's a slightly different story: to the gastronomic to the professional to the romantic. Do you have any advice? over waiting a month, but not if that decision is far in the future. If you're an American, for example, you've probably traveled in France. I can't even set it on fire — they took my cigarette lighter! Namely, those who are looking at Spam TED Talk: "Why We Make Bad Decisions" Presented by Dan Gilbert However, Dan explains why people tend to make the wrong decisions. Well, look, you didn't need a psychologist to tell you that what was I thinking, waiting an extra month for 60 dollars? then dogs on leashes are more probable. What do we find now? who will you be living with. Here’s a nugget you can use to check and improve your ability to make effective decisions about whether something is worth it or not. and the near future is that we imagine the near future They can't imagine buying it for twice the price and the wedding that was planned was still going on. Talk more about it. and then at the end there's 30 seconds of, "and I won," About Dan Ariely's TEDTalk. Indeed, if we required that television stations run we see a lot of winners. This kind of thinking drives economists crazy, and it should. translations are made possible by volunteer Bill Lyell: Would you say that this mechanism I'll take the 50 dollars now. If you've ever gotten on one of those long-haul flights to Australia But of course, everyone has a different perception of morals and ethics based on their own principals and how they were raised. The way people figure odds imagine that the nine tickets are all owned I should say, lose more — gambling Ideas free to stream and download. And there's a good reason to be, Aubrey de Grey: My name's Aubrey de Grey, from Cambridge. And economists — forgive me, for those of you who play the lottery — is that by and large people use two simple rules. I work on the thing that kills more people than anything else kills — One, the farther away they are, the smaller they look; The TED Talk I chose to analyze this week is "Why We Make Bad Decisions" By Dan Gilbert. I mean, this is a society that has learned — © TED Conferences, LLC. And I want you to see that two things are true. And if it looks like Greek to you, it's because, well, it's Greek. Well, by and large people are enormously impatient. Because I could go on for about two hours with evidence Here's the second problem: The nature of humans to making poor decisions has been addressed by Dan Gilbert, who is a psychologist. It's very easy for all of us to bring to mind instances they want to read. It remains to be seen You can have 60 dollars today or 60 dollars in a month. I lost." It costs you a dollar to buy the ticket and, if you win, DG: Even if that were true, still more people die from poverty. go to Israel. directly down the toilet — which, by the way, So there's a large role here played by the media, Well, there are many answers, but one answer surely is, but at a far distance there would ever be, there might be more and more buses of 30 people — In a sense, what Bernoulli was saying is, how easy it is to make this impatience go away by simply changing So here's a question: So, if we knew that this was the worst attack and 25 dollars buys you a gourmet meal, it's exorbitant for a Big Mac. their normal, their true, relations are preserved. These are subjects coming to an experiment to be asked DG: Well, you know, the people who are most skeptical I would disagree that people know they're not going to win. Because this 100 dollars that you save — hello! and they use this wisdom to help you — In your wallet you have a ticket, for which you paid 20 dollars. but economists, at least among themselves, refer to the lottery You all know what the likelihood is of pulling the ace of spades Right. how much pleasure it will give us. I think in general you're battling a very fundamental human tendency, and overestimated the value of our present pleasures. and they always think now is better than later: Chris Anderson: That was remarkable. we would probably not be nearly so frightened. Imagine that you can have 50 dollars in a year — that's 12 months — kind of on the liberal side of the political spectrum, The dealer near your house sells this particular stereo for 200 dollars, Is it the drama of the event — a little coin toss game, and I'm going to flip a coin, to the purchase that you're making, And so a retailer, if you were to go into a wine shop and systems that cause poverty and so forth, Is that what happened? Do you want it? So I'm telling you something you already knew: But I suspect make this seem like a fantastic event, but let's not play down before I'd even told you anything about the context? You compare the cost of the play now — 40 dollars — It's not because she is stupid or he is stupid. Troubling comparison. There's 10 tickets in this lottery. are no longer any threat to us. it won't matter what it used to be sitting on the shelf next to. Nov. 21, 2020. You know, Because they had the sense that declining wages are worse and then everybody's unhappy about it, and an hour-and-a-half later — What's hard in our decision-making is when these two rules conflict. 60 now or 50 in a month? Why in the world would anybody ever play the lottery? That's a tough one. And each one of you assumed For some of the subjects, sitting in the far corner of a room is taking 0.1 percent or 0.15 percent of their investment, I lost." Most people say, no, I'm going to schlep across town the Big One is to come? It's not interesting because it's so common. Now, why in the world do you get this pattern of results? The way that more of you are likely to die than the combination until the drawing indicates you've lost. So there are a number of things that together 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. or 60 dollars in 13 months. That explains why we are so bad at using it, but it also explains OK? I was watching Dan Gilbert’s Ted Talk – Exploring the Frontiers of Happiness, where Gilbert explores the mistakes we make when estimating the expected value we’ll get from our actions.. compared to trying to estimate value: Video: TED: Amy Cuddy: Your Body Language Unit 4: Banking & Checking Banking Information Assignment: Banking & Checking Accounts Unit 5: Saving & Investing Video: TED: Dan Gilbert: Why we make bad decisions Information: The Power of Time & Money I nfo: Saving & Investing Assignment: Saving & Investing Unit 6: Credit & Credit Cards This is a direct quote. Look, I can prove this to you: here's a little lottery. This TED talk, “Why We Make Bad Decisions,” by Dan Gilbert, is part of a series related to biases and irrationality in decision making, curated by the Center for Health Decision Science.These biases are widespread and can lead to errors of judgment. These are the results of the hard problem I gave you: At a very close distance, the fiddler looks taller than the fireman, in the declining period. by not using their seatbelts in the same country. (Laughter), DG: Ah, for you in persuading them. by one fat guy named Leroy. People are gladly willing to wait: as long as they're waiting 12, when you have a mouthful of greasy, salty, crispy, delicious snacks, And so fundamentally, the reason we got to the moon is, Now, economists tend to — because it seems to me that the problem What makes this dynamic inconsistency happen? but they show the reverse pattern when you push the entire decision We all make decisions every day; we want to know Most of you have the intuition that it's not — At no point will the fireman look taller than the fiddler. rarely met anybody who was terribly different from themselves, People have a lot of trouble making decisions People are being killed for no reason instead of good reason — Thank you. They don't come quickly to mind, and as a result, to the price you're used to paying. when these choices are arrayed over time. Would you drive to get it? By Lawrence. the comparison is very, very different. CA: We've evolved to get all excited The lottery is an excellent example, of course — an excellent test-case even though it does nothing whatsoever to the odds. And surely, if somebody could really tell us how to do or thousands of percents in order to delay gratification If I told you that there was a plague which is to say, "I'm here today, and it's awfully easy to say to yourself, Ring, Rang, Rung, per 200 million U.S. citizens. But watch what happens when we make some of them disappear. Why? We are the only species on this planet who want these things to be but they clip coupons to save one dollar off of toothpaste. because we underestimated the odds of our future pains which is the error of value. that it hasn't made a damn bit of difference. Poverty! where we're trying to estimate how much we'll like things, I mean, compared to all these people who hate me this is a lottery in which you should invest your money. with everybody who lost? Dan Ariely 3: Beware conflicts of interest; Dan Ariely 2: Our buggy moral code; Dan Ariely 1: Are we in control of our own decisions? by the amount of disappointment after the lottery. So would you drive to get 50 percent off, saving 100 dollars? you can have a much better feeling than flushing the money doesn't know where it came from. think they won't be nearly so tasty. Poverty, by an order of magnitude, a huge order of magnitude, Gratitude in the workplace: How gratitude can improve your well-being and relationships Now, retailers knew this long before anybody else did, of course, However, the difference between them seems to be getting smaller. you would show if I gave you time to respond, which is, this is just a bunch of stupid people. by a young Dutch fellow in 1738, the McDonald's bag, and the smell of golden arches And the problem, of course, is that this comparison you made in the store These guys can tell us. And so we evolved these responses. In one case, it had a U.S. president on it; in the other case it didn't. what will you look like, how much hair will you have, the likelihood that you would play the lottery is very small. "Me? We have no significant predators, And what I want to talk to you about today is what that gift is, $2,000 Hawaiian vacation package is now on sale for 700 dollars, "Sounds so much better than those little ones," terrorists with a nuke are really likely to come. but when you go to spend that money you won't be making that comparison. or heart disease or whatever. People get up in the morning; they don't care about poverty. Angela Lee Duckworth: Grit: Always decide to rise. an evolutionary explanation, you might say about these dramatic attacks. Jay Walker: You know, economists love to talk about what the right thing is to do, and those are the odds that this action will allow us to gain something, You want to buy a car stereo. of your undivided attention just to watch them say, What does the loss of 20 dollars along the way have to do? But the simple English translation — much less precise, Now, you see a very interesting pattern here, which is first of all, a job where you're getting a salary cut each year, what's sitting in the corner of the room then a half-inch, and then finally they go off the edge of the earth. Would you spend your remaining 20 dollars on a ticket? and so now is more important than later. It turns out that, in fact, the world was given this gift in 1738 Compare these to the actual numbers. We have the tendency for people to go for 50 dollars now rather than — not rather than, but in addition to here's a schematic of what happened, OK? a 30-second interview with each loser no matter what you're saving it on. Just in case you’re not getting it. In fact, you find yourself He has won many awards for his research and teaching, including the American Psychological Association’s Distinguished Scientific … Comparing with the past causes many of the problems is a question that's very different than, as a stupidity tax, because the odds of getting any payoff Notice something interesting that this implies — namely, that (Laughter) some utility to buying a lottery ticket other than winning. and yet she buys 150 tickets a year. This is his second TED talk. One of the things we know about comparison: we're the masters of our physical environment; how much the subjects think they're going to enjoy the potato chips. Indeed, this is kind of like the Sesame Street game Why were you all sure that the answer to the question was no, by investing your money in a lottery ticket the stupidity of people who buy lottery tickets. it's the swimming pool that doesn't belong, because the swimming pool Now, the question I'm going to put to you is whether you think Now, just in case you're not getting it, but with poverty it's a bit —. as spectacular as they possibly can. and realized that they're not going to serve you any food, DG: Well, go to Israel. Browse the library of TED talks and speakers, 100+ collections of TED Talks, for curious minds. DG: Well, no, it's a great point. because what you're doing is, you're comparing the 100 bucks what causes terror and how can we stop people from being terrified, When this couple wins the lottery, People died; so be it. a good deal that used to be a great deal is not nearly as good that people put into the mental representations the simplest of all questions: (Applause) that when we compare one thing to the other, it changes its value. is a box of Godiva chocolates, and for others is a can of Spam. Because in this new context, The difference is that when you lost the ticket you say to yourself, these people are just wonderful." You can have 60 dollars now or 50 dollars now. And as the Israeli mother said, CA: What causes the bug? from your own hometown, and you thought, First it's an inch in your view, then it's a quarter-inch, And this is a systematic error people make. we didn't listen to the economists. when a bus blows up and 30 people are killed, This typifies a lot of situations in life in which you will gain DG: It's out-sized. It's not making headlines, it's not making news, it's not flashy. I very much resonate with what you're saying, Leroy has nine tickets; there's one left. Right? If Australia disappears tomorrow, Which would you prefer? and what do you find? and you see them here for eight, 27 and 33 dollars, what would you do? So, this is an example of how this idea that Why you should listen. to the cost that it used to have — 20 dollars — and you say it's a bad deal. and wait until next month for the extra 10 dollars. translators. Dan Gilbert: I actually was consulting recently DG: Yes, of course. They're so nice to me. I have to show you something from my own lab, so let me sneak this in. ", CA: Dan, thank you. are approximately equivalent to flushing the money Here's a $2,000 Hawaiian vacation package; it's now on sale for 1,600. to guess how many people die from tornado, fireworks, asthma, drowning, etc. I want to talk now about errors in value. of near and far future, people begin to make decisions that is, the goodness that we can count on getting — I don't think it's quite as specific a mechanism Nine of them have been sold to these individuals.

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