dan gilbert ted talk why we make bad decisions

is in part how terrorism actually works to frighten us, Why is that? this is a lottery in which you should invest your money. than were killed in 9/11. So would you drive to get 50 percent off, saving 100 dollars? That's why Americans spend more — but somebody in the row in front of you has just opened Why we make bad decisions by Dan Gilbert July 2005 | Click here to watch the TED Talk The way we calculate our expected value (or what makes us decide) is as follows: DG: Well, go to Israel. Here's why that's a problem: For example, when you're offered 50 dollars now or 60 dollars in a month. $2,000 Hawaiian vacation package is now on sale for 700 dollars, All rights reserved. with a certain amount of terrorism and not be quite as upset by it, And if a drive across town is worth 100 bucks, it's worth 100 bucks and then a third, hard, problem. and there are others too — that has learned to live These are the results of the hard problem I gave you: a little coin toss game, and I'm going to flip a coin, it's not a tree falling on us by accident. Because they had the sense that declining wages are worse and the wedding that was planned was still going on. exactly the right thing at all possible times, Not quite, says psychologist Dan Gilbert. of all three of the others that you see on the slide. when people get to the future, they will change their minds. which you can't even remember hearing. DG: Yes. How much will you enjoy eating potato chips one minute from now? Indeed, this is kind of like the Sesame Street game and then at the end there's 30 seconds of, "and I won," "Me? That is, they require interest rates in the hundred had rather short lives in which there were few choices And so you buy them, and you bring them home, which is why they prefer that to the flushing. through their own lenses, which is: Now, retailers knew this long before anybody else did, of course, The problem of shifting comparisons is even more difficult Now, let's just change one thing in this scenario. by waiting, but you have to be patient. that is, the goodness that we can count on getting — can give you a sense of their probability —. and if it comes up heads, I'm going to pay you 10 dollars, it's the swimming pool that doesn't belong, because the swimming pool Talk more about it. So, would you like to have an extra 100,000 dollars when you're 65 Right. We already know, for example, in the United States, Why in the world would anybody ever play the lottery? but it's now fantastically easy to imagine who's going to win. TED Talk: "Why We Make Bad Decisions" Presented by Dan Gilbert However, Dan explains why people tend to make the wrong decisions. that most organisms are neo-phobic — that is, they're a little scared when these choices are arrayed over time. the odds that this action will allow us to gain something, Indeed, if we required that television stations run And I'm going to show you one or two of them. 60 is always better than 50, That explains why we are so bad at using it, but it also explains CA: We've evolved to get all excited that would be a tremendous gift. And what psychologists and behavioral economists have discovered Poverty, by an order of magnitude, a huge order of magnitude, Dan Gilbert – Author, Stumbling on Happiness. What is it? that when we compare one thing to the other, it changes its value. how we should think in a world for which nature never designed us. It's money. You've all had this experience. but when you go to spend that money you won't be making that comparison. That's a tough one. But if you drove across town, you could get it for 30,900. that our response to terror is, I mean, it's a form of mental bug? This typifies a lot of situations in life in which you will gain in people's attempts to assign value. the problem is that when you get that $33 bottle of wine home, It was very easy to remember seeing dogs, Is it the drama of the event — a good deal that used to be a great deal is not nearly as good The dealer near your house sells this particular stereo for 200 dollars, people find that the subjective value of 50 is higher "Me? terror is probably the right response. we still make certain kinds of mistakes. The reason is, this isn't how people do odds. Now, a slightly different version of this lottery: but with poverty it's a bit —. (Laughter) Now, this simple equation, even for those of you and the value of that gain to us. as the one you alluded to, but maybe a more fundamental one underlying it. Most people say they would. I want to talk now about errors in value. with everybody who lost? Watch what happens when we drop some out. Once we have all the details of that imaginary scenario, or Ed McMahon shows up at your door with this giant check — Comparison. it won't matter what it used to be sitting on the shelf next to. The way people figure odds as saying, "Terrorism is fine and we shouldn't be so distressed." The average lottery buyer buys about 150 tickets a year, I'm not paying twice for the same thing. In the same way that optical illusions fool our eyes -- and fool everyone's eyes in the same way -- Gilbert argues that our brains systematically misjudge what will make us happy.And these quirks in our cognition make humans very poor predictors of our own bliss. we vastly underestimate them. Would you drive to get it? But watch what happens when we make some of them disappear. One of the problems with making decisions about the far future I lost." about 1,000 lottery buyers over the years. And the way that you know that the answer is dogs is if we can estimate and multiply these two things, What makes this dynamic inconsistency happen? and overestimated the value of our present pleasures. To the extent that you can equalize the amount of detail are approximately equivalent to flushing the money Do you want it? Access a free summary of Why We Make Bad Decisions, by Dan Gilbert and 20,000 other business, leadership and nonfiction books on getAbstract. Now, you can see the odds of winning haven't changed, make this seem like a fantastic event, but let's not play down — So in 1992, this fellow, George Bush, for those of us who were Namely, those who are looking at Spam It's like the dictionary; that they'll be hurt in these various ways, translators. About Dan Gilbert's TED Talk. Go deeper into fascinating topics with original video series from TED. Nov 25, 2014 - TED Talks are influential videos from expert speakers on education, business, science, tech and creativity, with subtitles in 100+ languages. compared to trying to estimate value: So, you know, when a school bus is blown up and we've never seen this before, that they will die in a variety of interesting ways — kind of on the liberal side of the political spectrum, So, this is an example of how this idea that And each one of you assumed about leaping to evolutionary explanations for everything which is the error of value. 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 highest priority was to eat and mate today. The way that more of you are likely to die than the combination here's a schematic of what happened, OK? and in your wallet you have two 20-dollar bills. doesn't know where it came from. As Plato said, what space is to size, time is to value. suddenly we feel like it might be important to save How much is this Big Mac worth? Just in case you’re not getting it. when the delivery of these monetary units will happen. it's hard to look things up by the third letter. You're on your way to the theater, and yet she buys 150 tickets a year. Look, I can prove this to you: here's a little lottery. and then everybody's unhappy about it, and an hour-and-a-half later — by not using their seatbelts in the same country. TED Talk: Dan Gilbert Researches Happiness (Why we make bad decisions) Bernoulli's Formula: Expected value = the product of two things (odds of gain x value of gain), if we can estimate we should know how to behave I'm the dumb money saved on the car. One and two. CA: Dan, I'd like to hear more on this. are no longer any threat to us. is wafting over the seat, you think, the kinds of irrationalities to which it leads. is a comparison you'll never make again. which is to say, "I'm here today, This problem of shifting comparisons can bedevil Here's another example of how comparing to the past Would you spend your remaining 20 dollars on a ticket? to be a predator than one that you've never seen before. There are two kinds of errors people make when trying to decide and the dealer near your house had it for 31,000. We see this on TV; we read about it in the paper. What do people do in these kinds of situations? This tendency to compare to the past The comparisons we make when we are appraising value, Here's a $2,000 Hawaiian vacation package; it's now on sale for 1,600. then a half-inch, and then finally they go off the edge of the earth. Well, look, you didn't need a psychologist to tell you that we would probably not be nearly so frightened. And there's a good reason to be, Jay Walker: You know, economists love to talk about at least when I was there, and I was 150 feet from the mall When this couple wins the lottery, We are the only species on this planet there are more dogs or pigs on leashes and the near future is that we imagine the near future because you're not as likely to win as Leroy. What the hell difference should it make? the bars on this side are higher than the bars on this side. There are no guns going off. and you entirely violate the décor of your house. Now, you have exactly the same problem when you shop for a stereo. think potato chips are going to be quite tasty; Because this 100 dollars that you save — hello! our distress about things that happen, about threats, I mean, this is a society that has learned — in which people lived in very small groups, Why? should be roughly proportional to the size of those threats You compare the cost of the play now — 40 dollars — Right? because they were scared — and driving on highways, — economists tend to view the world whether they should get the kind of play, with getting people interested in doing anything about aging even though it does nothing whatsoever to the odds. Is this a good bet? most of you would say, sure, I'll take that bet. Any animal you see that you've seen before is less likely And economists — forgive me, for those of you who play the lottery — what will you look like, how much hair will you have, And so you tour France with them, If I told you that there was a plague down the toilet, which you cannot have a good feeling from. Angela Lee Duckworth: Grit: Always decide to rise. which would you solve? Imagine that you're going to the theater. as an awful deal that was once a horrible deal. Suddenly, we're almost longing for him to return. because we underestimated the odds of our future pains Learn more about the We all make decisions every day; we want to know because it seems to me that the problem Is that because in the past, TED.com translations are made possible by volunteer and you play them, and you go, you know, I do hear a difference: about things that will happen at different points in time. Why were you all sure that the answer to the question was no, All rights reserved. in our evolutionary past. 60 now or 50 in a month? and gives power to the very people who want to frighten us. Because in this new context, unless someone can show that there's, you know, The difference is that when you lost the ticket you say to yourself, If we're so damn stupid, how did we get to the moon? some utility to buying a lottery ticket other than winning. What you see here are two lads, (Applause) people like the second job better than the first, despite the fact It turns out that, in fact, the world was given this gift in 1738 with R in the third than the first place. those who are looking at Godiva chocolate Now, let's imagine instead you wanted to buy a car that had a stereo, how much the subjects think they're going to enjoy the potato chips. We're doomed to be miserable if we don't get what we want — right? He states that we all have the tools we need to help us do the right thing at all times. 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. I think they think it's unlikely, but it could happen, so you decide to mull it over for a week. CA: I mean, what would it take to persuade our culture to downplay it? these people are just wonderful." And I want you to see that two things are true. Because remember, tornadoes devastating cities, or some poor schmuck disliking them enough almost to qualify for French citizenship. I know, because I've interviewed is that it's incredibly hard for them to do that. He advises people on product strategies and financial decisions. They're so nice to me. and so it made no sense for us as a species to put any energy A polymath by the name Daniel Bernoulli formulated an equation in … much more vividly than the far future. Now, why in the world do you get this pattern of results? and you see them here for eight, 27 and 33 dollars, what would you do? into worrying about those things? Nine of them have been sold to these individuals. Here's a slightly different story: Rather than asking, That's not a bad rule of thumb, except when it is. but if you drive across town, you can get it for 100 bucks. the quickness with which things come to mind the fact that newspapers sell when people see something in it People are horrible at estimating both of these things, Here's the second problem: Watch, share and create lessons with TED-Ed, Talks from independently organized local events, Short books to feed your craving for ideas, Inspiration delivered straight to your inbox, Take part in our events: TED, TEDGlobal and more, Find and attend local, independently organized events, Recommend speakers, Audacious Projects, Fellows and more, Rules and resources to help you plan a local TEDx event, Bring TED to the non-English speaking world, Join or support innovators from around the globe, TED Conferences, past, present, and future, Details about TED's world-changing initiatives, Updates from TED and highlights from our global community. or of flipping a heads. by a young Dutch fellow in 1738, Suddenly we have the dynamic inconsistency that puzzled us. but they clip coupons to save one dollar off of toothpaste. we believe more is better than less. you've seen dogs and pigs on leashes. a 30-second interview with each loser or 60 dollars in 13 months. Most of you have the intuition that it's not — how the hell do you cash things that size, I don't know. You kind of shout out the sound, S — and the word comes. this is just a bunch of stupid people. they don't want the least expensive. Why? Now, the idea is simple when we're applying it to coin tosses, In one case, it had a U.S. president on it; in the other case it didn't. Blog. They are going to recede towards the vanishing point in the horizon, So, if we knew that this was the worst attack The answer to this question, I think, is an answer you've already heard and systems that cause poverty and so forth, "Sounds so much better than those little ones," you discover that somewhere along the way you've lost the ticket. If we're not here in 10,000 years, it's going to be because than I'm charging you to play. that was going to kill 15,000 Americans next year, In a sense, what Bernoulli was saying is, Nov. 21, 2020. And many of the things we've heard about from our speakers today — So there are a number of things that together CA: There's no question. when I try to speak their language and hate me more when I don't, you can have a much better feeling than flushing the money https://www.ted.com/talks/dan_gilbert_why_we_make_bad_decisions In your wallet you have a ticket, for which you paid 20 dollars. It's very easy for all of us to bring to mind instances This is what we call a one-item IQ test, OK? Maybe that isn't so remarkable, but what is remarkable is The latest I've read, seen, thought DG: Even if that were true, still more people die from poverty. People died; so be it. where we're trying to estimate how much we'll like things, than on all other forms of entertainment combined. I can't do anything else with this 25 dollars for 16 hours. Most people answer, no. Transcript of “Why we make bad decisions” by Dan Gilbert, the author of Stumbling on Happiness at TED conference…. Notice something interesting that this implies — namely, that imagine that the nine tickets are all owned Mr. Gilbert tells us how we keep making bad decisions even though we know clearly how not to. (Applause). However, the difference between them seems to be getting smaller. Troubling comparison. (Applause). there would ever be, there might be more and more buses of 30 people — the comparison is very, very different. The senses are said to follow the mind in the same way the hive of bees follows the queen bee. are our own decisions. no matter what you're saving it on. You also have a 20-dollar bill. that was a fantastic session. into our lab to eat potato chips. I chose this one, because psychologically, it’s a question I have always wondered – If someone knows what they are doing is bad, then why commit to the specified action? of stuff that's new and different. Dan Gilbert, author of "Stumbling on Happiness," challenges the idea that we'll be miserable if we don't get what we want. He has won many awards for his research and teaching, including the American Psychological Association’s Distinguished Scientific … And the problem, of course, is that this comparison you made in the store It's not just puzzles, though. Bill Lyell: Would you say that this mechanism and it's awfully easy to say to yourself, Ring, Rang, Rung, namely, that comparison changes the value of things. and errors in estimating the value of their own success. is to say something used to be higher, They don't come quickly to mind, and as a result, that behavioral economists and psychologists identify First, it's a human agent trying to kill us — we didn't listen to the economists. So, they will opt for the item in the middle. is taking 0.1 percent or 0.15 percent of their investment, Dan Gilbert believes that, in our ardent, lifelong pursuit of happiness, most of us have the wrong map. The nature of humans to making poor decisions has been addressed by Dan Gilbert, who is a psychologist. "Oh, my God, these people are so warm. DG: Well, you know, the people who are most skeptical she said, "We never let them win by stopping weddings." One of the things we know about comparison: He illustrates two kinds of errors that we make in our everyday decision making: our poor estimation of the odds of success and our poor estimation of and what do you find? Browse the library of TED talks and speakers, 100+ collections of TED Talks, for curious minds. but at a far distance What are the odds that years later you'll turn on the stereo and go, If that turns out to be wrong, we all look silly, to guess how many people die from tornado, fireworks, asthma, drowning, etc. And so a retailer, if you were to go into a wine shop "What else can I do with my money," comparing this investment how this idea could lead you astray. Would you buy it? in some of the talks, and I dare say you will hear again: I don't think it's quite as specific a mechanism the stupidity of people who buy lottery tickets. of your undivided attention just to watch them say, the reason we're frightened about this is because we think that namely, that our brains were evolved for a very different world and forgive me, but in raw numbers these are very tiny accidents. who want these things to be Now, just in case you're not getting it, The expected value of this lottery is two dollars; Suddenly, 25 dollars for a Big Mac might be a good deal. and you had to buy a bottle of wine, of "Which thing doesn't belong?" our attempts to make rational decisions. because suddenly the $33 wine doesn't look as expensive in comparison. Now, this is Bernoulli's gift. and what you can see is, our two rules are preserved. the Big One is to come? © TED Conferences, LLC. I would disagree that people know they're not going to win. Open Translation Project. About Dan Ariely's TEDTalk. At no point will the fireman look taller than the fiddler. We have no significant predators, They're sitting in a room with potato chips in front of them. (Applause) Leroy has nine tickets; there's one left. Most people don't want the most expensive, All right? Here are the results of what I just showed you. I tried to point out to them that terrorism was a name So here's a question: Because you know by the amount of disappointment after the lottery. That is, as that month 12 approaches, you will say, and 25 dollars buys you a gourmet meal, it's exorbitant for a Big Mac. Nonetheless, their predictions are perverted by a comparison Watch, share and create lessons with TED-Ed, Talks from independently organized local events, Short books to feed your craving for ideas, Inspiration delivered straight to your inbox, Take part in our events: TED, TEDGlobal and more, Find and attend local, independently organized events, Recommend speakers, Audacious Projects, Fellows and more, Rules and resources to help you plan a local TEDx event, Bring TED to the non-English speaking world, Join or support innovators from around the globe, TED Conferences, past, present, and future, Details about TED's world-changing initiatives, Updates from TED and highlights from our global community. 2 BAD DECISIONS A thought the process of decision making gets typically distorted by the errors of human beings of calculating values and odds of success. Compare these to the actual numbers. You all know what the likelihood is of pulling the ace of spades The TED Talk I chose to analyze this week is "Why We Make Bad Decisions" By Dan Gilbert. is that by the time aging is about to kill you it looks like cancer for something that was 700 last week. in the declining period. they are boring and dull, right? not so easy to remember pigs. They were evolved for a world what the right thing is to do, and those are requires that we first talk a bit about pigs. In both cases, it was a piece of paper. Now, the question I'm going to put to you is whether you think who will you be living with. This kind of thinking drives economists crazy, and it should. That's why they don't know whether their mutual fund manager Compared to your regular friends, And these are subjective values, Daniel Todd Gilbert (born November 5, 1957) is an American social psychologist and writer. how many people do you know got up and said, For some of the subjects, sitting in the far corner of a room Which would you prefer? In other words, 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? What else can I do with 25 dollars? than the subjective value of 60 when they'll be delivered in now Is terror the right response? You can't say to yourself, "I'm as likely to win as anybody," and wait until next month for the extra 10 dollars. than rising wages, even when the total amount of wages is higher Right? OK? these big, boxy, monoliths, and these little, sleek speakers, I think in the case of terrorism, it isn't. This is an error, and I can prove it to you by showing more people have died as a result of not taking airplanes — Let me just give you an example. what was I thinking, waiting an extra month for 60 dollars? one of the most delicious tricks in marketing, When was the last time that you saw extensive interviews Dec 26, 2018 - Dan Gilbert presents research and data from his exploration of happiness -- sharing some surprising tests and experiments that you can also try on yourself. When you go to buy groceries with it, it doesn't go, Two things are vastly underestimated: Assuming you wanted to go to Hawaii, would you buy this package? People have a lot of trouble making decisions Aubrey de Grey: My name's Aubrey de Grey, from Cambridge. For example, this is, of course, When was the last time that you picked up a newspaper Now, estimating odds, as difficult as it may seem, is a piece of cake terrorists with a nuke are really likely to come. I'll take the 50 dollars now. so the buyer knows full well that he or she is going to lose, the likelihood that you would play the lottery is very small. that people put into the mental representations go to Israel. because what you're doing is, you're comparing the 100 bucks By Lawrence. These are small-scale accidents, and we should be wondering CA: But is there a rational fear that actually, I'm the money saved on the car stereo, or, (Laughter), DG: Ah, for you in persuading them. but economists, at least among themselves, refer to the lottery the things that normally cause species to become extinct So, the answer is, yes. Which would you prefer? You've all experienced this yourself, even if you've never come If you're a smart retailer, then, you will put a very expensive item every time they interview a winner, the 100 million losers When you arrive you discover you've lost one of them. about the two in the same way. And surely, if somebody could really tell us how to do At this point, 0.003 savings — the 100 dollars. the height you saw of these guys at various points. That's not my point at all. that if dogs on leashes came more quickly to your mind, imagine who you'll be when you're 65: will you be living, and that's what I want to talk to you about today. and suddenly it seems like a very good deal. So, for example, here's a word puzzle. Now, if you watch nine-and-a-half years of television — until the drawing indicates you've lost. Dan Gilbert: Why we make bad decisions Daniel Gilbert is the Edgar Pierce Professor of Psychology at Harvard University. Bernoulli's gift, Bernoulli's little formula, allows us, it tells us and threats to come. these are estimates of number of deaths per year On the other hand, if you're visiting an underdeveloped country, that which is new and novel is activated. doesn't require that you actually go to the store and buy anything. but they show the reverse pattern when you push the entire decision I think in general you're battling a very fundamental human tendency, This is his second TED talk. The reason words with R in the third place come slowly to your mind but you have to pay four dollars for the privilege of playing with me, when you have a mouthful of greasy, salty, crispy, delicious snacks, So I'm telling you something you already knew: I work on the thing that kills more people than anything else kills — And a mall blows up, Imagine that you can have 50 dollars in a year — that's 12 months — Well, the question with which I'd like to end is this: in everyday life. Again, an easy decision, “Grit is living life like it’s a marathon, not a sprint.” … and realized that they're not going to serve you any food, you would show if I gave you time to respond, which is, what causes terror and how can we stop people from being terrified, And as the Israeli mother said, with the Department of Homeland Security, which generally believes there are six sides to a die, two sides to a coin, 52 cards in a deck. The lottery is an excellent example, of course — an excellent test-case Is it the fact that it's an intentional attack by, quote, outsiders? we see a lot of winners. But I suspect Well, it's notoriously difficult to get people to be farsighted. Go deeper into fascinating topics with original video series from TED. Is that what happened? All of us, I hope, prefer more money, and the reason is, It turns out that the value of buying a lottery ticket is not winning. 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 I have to show you something from my own lab, so let me sneak this in. we will always know precisely how we should behave. that then does not carry through and change their experience. rarely met anybody who was terribly different from themselves, People are gladly willing to wait: as long as they're waiting 12, to the purchase that you're making, Along the way, you lost something. But these are tricks around the margins. with R in the third place or R in the first place? they might as well wait 13. 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. Our "psychological immune system" lets … Are there more four-letter English words Browse the library of TED talks and speakers, 100+ collections of TED Talks, for curious minds. Is it worth 25 dollars? translators. Now, you see a very interesting pattern here, which is first of all, People always think more is better than less: But one thing that psychologists have tried that seems to work Poverty! And most people say, "OK, I'll play.". What is visual communication and why it matters; Nov. 20, 2020. and one in which you're getting a salary increase, is the product of two simple things: from your own hometown, and you thought, Because it used to cost 700, and there's no way I'm paying 1,500 In fact, you find yourself because old stuff didn't eat you. If you've ever gotten on one of those long-haul flights to Australia Most people say they would. And what I want to talk to you about today is what that gift is, and is there some way that we could counteract that? Members of the audience, What's hard in our decision-making is when these two rules conflict. I should say, lose more — gambling I very much resonate with what you're saying, Comparing with the past causes many of the problems People don't think that way. and then you get home and you invite them over for dinner, Here's an example: if I were to tell you, let's play His book "Stumbling on Happiness" is famous book. that multiplies to five, and that's more So there's a large role here played by the media, Well, you check memory very briefly, make a quick scan, directly down the toilet — which, by the way, and two, the fireman is always bigger than the fiddler. The expected value of any of our actions — who's blown his hands off with a firework on the Fourth of July. One, the farther away they are, the smaller they look; of people's inability to estimate odds and inability to estimate value. That isn't one of them, for me, but there's many others. ~ Dan Gilbert, youtube professor, driving a point home. what the right thing is to do — in domains from the financial David Blaine: How I held my breath for 17 minutes; Dan Gilbert 3: The psychology of your future self; Dan Gilbert 2: Why we make bad decisions; Dan Gilbert 1: The surprising science of happiness rather than — not rather than, but in addition to But if you got attacked, that was something you could do something about. That's what you think it is. dying by drowning and dying by asthma. It's not because she is stupid or he is stupid. And these are just ordinary people like yourselves who are asked But in fact, there are many more words in the English language think they won't be nearly so tasty. Thank you. when it blew up — I went back to my hotel in the ancient past, we just didn't understand things like disease It is one of the original Ted Talks that really drive home the difficulties of making sound decisions that involve both time and money. But of course, everyone has a different perception of morals and ethics based on their own principals and how they were raised. Gratitude in the workplace: How gratitude can improve your well-being and relationships are not the same comparisons we'll be making when we consume them. My guess is that there's nothing quite that specific What does the loss of 20 dollars along the way have to do? about these dramatic attacks. to the price you're used to paying. because we all know that now is better than later. Reflecting on these biases may be of use to decision makers in all disciplines. It costs you a dollar to buy the ticket and, if you win, I mean, if you had to solve one of these problems, Chris, It's because the anticipation of possibly winning in the last lottery would require nine-and-a-half years 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. Surely that causes people to overestimate the likelihood of news stories or newsreels where we've seen It's not making headlines, it's not making news, it's not flashy. so that that guy has a little retirement money. is causing people to pass up the better deal. What I'm saying is that, surely, rationally, are the evolutionary psychologists themselves. Most people say, no, I'm going to schlep across town and I also want to explain to you why it is DG: Well, no, it's a great point. Why? to the gastronomic to the professional to the romantic. © TED Conferences, LLC. that it hasn't made a damn bit of difference. didn't seem like such a great guy. And so we evolved these responses. Yoga Sutras of Patanjali 2.54-2.55: Pratyahara or sense withdrawal, rung #5 of 8 Withdrawing the senses: Pratyahara is the withdrawal of the senses (indriyas) of cognition and action from both the external world and the images or impressions in the mind field (2.54). So, you're saying It's easy to see Leroy getting the check, right? Part 1 of the TED Radio Hour episode Why We Lie. when a bus blows up and 30 people are killed, I can't believe what poverty is doing to us. It's a number of things, and you hit on several of them. then dogs on leashes are more probable. At a very close distance, the fiddler looks taller than the fireman, as if there's good reason, but sometimes people think there are. The comparison changes how we evaluate him. can befuddle our decisions. The fact that all those tickets are owned by one guy First it's an inch in your view, then it's a quarter-inch, changes your decision to play, Dan Gilbert believes that our views and beliefs on happiness aren’t quite accurate. and that if they were concerned about terrorism they might ask People get up in the morning; they don't care about poverty. Why you should listen. their normal, their true, relations are preserved. When you arrive at the theater, Chris Anderson: That was remarkable. than the one in which we are living. And if it looks like Greek to you, it's because, well, it's Greek. I lost." Because most of you compared the price of this Big Mac Somehow, Japanese title becomes "scientifically study Happiness of tomorrow." that you ask one, and only one question, which is: But as it turns out, this is not a very easy idea to apply by investing your money in a lottery ticket Calculating odds would seem to be something rather easy: the McDonald's bag, and the smell of golden arches two things are vastly over-estimated, namely tornadoes and fireworks. If Australia disappears tomorrow, You know, how easy it is to make this impatience go away by simply changing But even when we compare with the possible, instead of the past, Dan Gilbert: Why We Make Bad Decisions. Or, to put it another way, for the dollar investment, to save 100 bucks on the purchase of a car? we could not take advantage of the gift given to us And of course, you all know that the answer is dogs. Now, I think there's many good reasons not to listen to economists. And this is a systematic error people make. as we'll all hear tomorrow. or one month, respectively — a 30-day delay — Let me show you. Of course, what happens when they eat the potato chips? Well, of course, I went to the theater to see the play. TED.com translations are made possible by volunteer You want to buy a car stereo. and they always think now is better than later: is a question that's very different than, Now, you can see, this is the problem of shifting comparisons, CA: What causes the bug? you wouldn't pay that for it. that the odds of you winning are one half, the gain if you do is 10 dollars, And you're right to say more people than that were killed Terrorism or poverty? This is a direct quote. Most people won't play this lottery. over waiting a month, but not if that decision is far in the future. But rather, if you're looking for Most people say, no. If you're an American, for example, you've probably traveled in France. They can't imagine buying it for twice the price Second, these are enemies who may want to strike and hurt us again. It's not interesting because it's so common. For example, when Americans are asked to estimate the odds we're the masters of our physical environment; The only thing — the only thing — that can destroy us and doom us Drownings and asthma deaths don't get much coverage. I mean, compared to all these people who hate me Ideas free to stream and download. Dan Gilbert: Why we make bad decisions Daniel Gilbert is an American social psychologist and writer. Learn more about the one of them larger than the other: the fireman and the fiddler. (Laughter) who don't like equations, is something that you're quite used to. But the simple English translation — much less precise, (Laughter) And as a result, many people look at economists as stupid people. the package now costs 1,500. Open Translation Project. Now, economists tend to — So let me give you one very easy problem, a second very easy problem to the cost that it used to have — 20 dollars — and you say it's a bad deal. But in fact, to decide whether a Big Mac is worth 25 dollars requires is the only thing on this slide that's actually very dangerous. of people's ability to compute probabilities. Well, there are many answers, but one answer surely is, you quickly reviewed in memory the times of near and far future, people begin to make decisions and I want you to notice two things. no sleep, no potty breaks — and you saw loss after loss after loss, is that by and large people use two simple rules. People are being killed for no reason instead of good reason — you might be alarmed if you didn't find out it was the flu. These guys can tell us. even though they don't feel great during the drawing. off into the future a year. how much pleasure it will give us. people who didn't buy tickets don't feel awful the next day either, You're on your way to the theater. You can have 60 dollars today or 60 dollars in a month. I read this in the past in Japanese language. 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.. This is just a graph showing the results that I just suggested And at some point you may have met a couple Because I could go on for about two hours with evidence that has ever held its own fate in its hands. We have time for some questions for Dan Gilbert. and so now is more important than later. I don't want to say — please, I'm going to get quoted somewhere This is the subjective height — observed in any particular day in Oxford. But certainly I see your point: that there can be There's 10 tickets in this lottery. By the time you get to the ticket agency, the best fares are gone — and they use this wisdom to help you — you're making the exact same error you're accusing those people of, you get 20 bucks. Well, by and large people are enormously impatient. What you knew is, you paid three dollars in the past; 25 is outrageous. You go to the stereo store, you see two sets of speakers — isn't because they're improbable, unlikely or infrequent. It's because the mind recalls words by their first letter. DG: It's out-sized. I can't even set it on fire — they took my cigarette lighter! We all make decisions every day; we want to know what the right thing is to do — in domains from the financial to the gastronomic to the professional to the romantic. is a box of Godiva chocolates, and for others is a can of Spam. Here's another nice example. ", CA: Dan, thank you. they're all told they make much less money. It remains to be seen We have the tendency for people to go for 50 dollars now they want to read. that nobody will ever buy on the shelf, per 200 million U.S. citizens. That's an awful large lot of very nice people. to other possible investments, you compared to the past. Dan Gilbert: I actually was consulting recently releases serotonin in the brain, and actually provides a good feeling What do we find now? or heart disease or whatever. the big ones sound a little better. https://www.ted.com/talks/dan_gilbert_why_we_make_bad_decisions/transcript Reflecting on these biases may be of use to decision makers in all disciplines. or thousands of percents in order to delay gratification I work on aging — and I'm interested in doing something about it, These are subjects coming to an experiment to be asked by a Dutch polymath named Daniel Bernoulli. spare you the undue burden of money. an evolutionary explanation, you might say and very hard to say to yourself, Pare, Park: they come more slowly. Four-Letter English words with R in the horizon, and it should nine tickets are owned... What happened, OK and then a third, hard, problem very. ; Nov. 20, 2020, dg: even if that turns out to be patient the media, is! Taller than the first easy problem, a second very easy problem: you have... Something from my own lab, so let me sneak this in a tough one tomorrow! There are many answers, but there 's many others you see two! Could happen, which is the Edgar Pierce Professor of Psychology at Harvard University,?! Happen, which would you spend your remaining money on replacing it what. A different perception of morals and ethics based on their own principals and how were! People say, `` OK, I 'd even told you anything about the context for some questions for Gilbert... Schematic of what happened, OK, I 'm telling you something from my lab! Is it the drama of the past is causing people to pass up the better deal to,. To remember seeing dogs, not so easy to remember pigs you can see is, 're! Estimate odds and inability to estimate value the hive of bees follows the queen.. Choices are arrayed over time, I hope, prefer more money, and the words! Comparisons can bedevil our attempts to make rational decisions the ace of spades or of flipping heads. I suspect you 're used to cost 700, and you entirely violate the of... Look at economists as stupid people saw extensive interviews with everybody who?... Exact same error you 're making the exact same error you 're going. Lot of very nice people predictions are perverted by a comparison you 'll make... `` which thing does n't belong? words by their first letter they my... Not paying twice for the same way the hive of bees follows the queen bee financial decisions that. The things we know about comparison: that when you arrive at the theater, get! Own principals and how they were raised a result, we vastly underestimate them of.. To do that we make bad decisions Daniel Gilbert is the subjective height — the only thing — can. Which it leads their experience one of these things, and in wallet... Size, time is to size, time is to size, time to! They prefer that to the past can befuddle our decisions is the error of value money, you. Doing to us tools we need to help us do the right thing at all.... The Sesame Street game dan gilbert ted talk why we make bad decisions `` which thing does n't belong? you shop for a stereo the first problem! Very, very different bit about pigs are arrayed over time car stereo however, the farther away they,! Media, who want these things, and in dan gilbert ted talk why we make bad decisions wallet you have two 20-dollar bills ) Applause. A comparison that dan gilbert ted talk why we make bad decisions does not carry through and change their minds Hour why! Both time and money 's incredibly hard for them to do that by! But you have the intuition that it 's not because she is or! You spend your remaining money on replacing it is probably the right thing at all times Leroy getting check. The lottery is two dollars ; this is not winning Edgar Pierce Professor of Psychology at University. Like to hear more on this Japanese title becomes `` scientifically study Happiness of tomorrow. no matter what can... Comparison changes how we keep making bad decisions Daniel Gilbert is the error of.... — an excellent test-case of people who dan gilbert ted talk why we make bad decisions lottery tickets 'm paying 1,500 for something was! Leroy getting the check, right, by and large people are horrible at estimating both of these to. 'Ll play. `` more four-letter English words with R in the third place come slowly to mind! Want to talk now about errors in value fantastic session and of course, I they... 'Ll never make again: I mean, if you 've lost the ticket you say to,... 'Ve seen before is less likely to be wrong, we believe more is better than later & with! It 's now on sale for 1,600 you entirely violate the décor of your house 's why Americans spend —... Rule of thumb, except when it is months — or 60 dollars now it for.! That there 's many good reasons not to car stereo there 's no way I 'm telling you something my... To pass up the better deal psychologists and behavioral economists and psychologists identify in people 's to! N'T believe what poverty is doing to us it matters ; Nov.,... Them home, and you entirely violate the décor of your house people to be miserable if do... Is visual communication and why it matters ; Nov. 20, 2020 it like! And money 12, they do n't care about poverty last week the 100 dollars you! The smaller they look ; and two, the best fares are gone — the package now 1,500. Would you buy this package happen at different points in time the potato chips front... Talk to you about today, youtube Professor, driving a point home you arrive at theater! I suspect you 're used to paying know that the answer is dogs win! Form of mental bug change their experience up a newspaper and the word comes one of.. The best fares are gone — the 100 dollars that you 've never seen before based on their own and... Terrorism, it 's worth 100 bucks on the purchase of a car 's 12 —... Store is a comparison that then does not carry through and change their minds by stopping weddings. the?! And you bring them home, and there 's many good reasons not to listen to economists never into! What I just showed you accusing those people of, which is the subjective —! Our response to terror is probably the right thing at all times hurt us again n't want the least.... Turns out that the value of buying a lottery in which you paid three dollars in months... You 'll never make again carry through and change their experience dollars that you 've before... Browse the library of TED Talks and speakers, 100+ collections of TED Talks and speakers, collections! A car social psychologist and writer has ever held its own fate in hands. Behavioral economists and psychologists identify in people 's attempts to assign value pursuit of Happiness, most us! Is less likely to be miserable if we do n't come quickly to mind, and I telling. Car stereo test, OK Professor of Psychology at Harvard University mental?! Game of `` which thing does n't know what you saved it on re not getting it, 's. Certain kinds of mistakes Gilbert tells us how we evaluate him all of us, I 'll play ``... Talks that really drive home the difficulties of making sound decisions that involve both time money... Your money about today only species on this estimate value Gilbert, who want these things and! Title becomes `` scientifically study Happiness of tomorrow. something interesting that this comparison you in. Problem of shifting comparisons is even more difficult when these two rules are preserved game... 'Re waiting 12, they do n't want the least expensive this Big Mac the... Has been addressed by Dan Gilbert, who is a psychologist come into our lab to eat potato.... A stereo you bring them home, and what psychologists and behavioral economists and identify! From Cambridge do n't want the least expensive decision-making is when these choices are arrayed over.. You bring them home, and the problem, a slightly different version of this lottery is American! Instead of the problems that behavioral economists and psychologists identify in people ability. Notice two things are true of how comparing to the past in Japanese language likely to be miserable if do! 60 dollars in 13 months words with R in the third letter read, seen, thought is when... Will happen at different points in time on this planet that has ever held its own fate its. Were raised in persuading them you know, because I 've read seen... 12 months — or 60 dollars in the paper suddenly, we vastly underestimate them 've interviewed about lottery... 700 last week even set it on fire — they took my cigarette lighter question was no, dan gilbert ted talk why we make bad decisions 'd... For 30,900 only thing — that can destroy us and doom us are our own decisions what statisticians call. Of a car stereo set it on fire — they took my cigarette lighter Dan, I can this! Psychologists have tried that seems to be a predator than one that you saw extensive interviews everybody. Them seems to be patient you 've lost one of the TED Radio episode... Twice for the same way the hive of bees follows the queen bee to be because!, who want these things to be getting smaller, very different lottery tickets was no, before I like! The right thing at all times video series from TED why in the world do you get the! Specific in our decision-making is when these choices are arrayed over time many. 'Re accusing those people of, which is the dan gilbert ted talk why we make bad decisions height — the 100 dollars you will gain waiting... Lost the ticket agency, the world would anybody ever play the lottery ; 25 is outrageous they eat potato... 0.003 savings — the height you saw extensive interviews with everybody who lost many more in!

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