A Beginner’s Guide to Irrational Behavior
[This essay was originally posted on contributor Dan Ariely‘s personal blog.]
You make decisions all the time. What should you eat for breakfast? Which route should you take to work? How much are you willing to pay for local, pasture-raised beef over factory farmed, corn-fed meat? Should you go for a run, jog, walk, or finish watching the last season of Breaking Bad?
Some of these decisions might be great, while others … not so much. For example, take the mind-boggling case of someone winning a chess championship one minute and texting while driving the next. Playing chess (competently, at least) requires thinking many steps ahead, considering multiple scenarios and outcomes — whereas texting while driving is a complete and utter failure of the same kind of forward-thinking. The gap between how amazing we are in some respects and completely inept in others just highlights the invaluable nature of studying how humans think and interact with the world.
So, when do we make good decisions, and when and why do we fail? Fortunately, behavioral economics does have some answers. In “A Beginner’s Guide to Irrational Behavior,” you will learn about some of the many ways in which we behave in less than rational ways, and how we might overcome some of our shortcomings. You’ll also find cases where our irrationalities work in our favor, and how we can harness these tendencies to make better decisions.
You will explore topics such as our “irrational” patterns of thinking about money and investments, how expectations shape perception, economic and psychological analyses of dishonesty by honest people, how social and financial incentives work together (or against each other) in labor, how self-control comes into play with decision making, and how emotion (rather than cognition) can have a large impact on economic decisions.
All of this, packed into just 8 weeks! Join our modern crusade to improve decision making, and hopefully learn some things on the way. Sign up now (class starts on March 11th): https://www.coursera.org/course/behavioralecon