Philosophy 1230A/B Lecture Notes - Lecture 6: Dan Ariely
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-If we make such predictable errors at things we are good at (vision) how much more so in
areas we are not as good at.
-He was a burn victim and experienced severe pain, he took a class that made him respect the
importance of testing ideas empirically.
-He found that the fast ripping of bandages caused more pain than doing it slowly
Rational Economic Model
-Treats us (humans) as careful and excellent decision makers, blessed with something like ideal
rationality, from the start...proceeds to do economic theorizing based on this starting
Irrational Economic Model
-Although it acknowledges that we have often impressive cognitive capabilities, it emphasizes
that we also have many, many faults.
Behavioural Economic Model
Empirical Openness. Rather than deciding ahead of time, this model emphasizes that it is an
empirical question whether (and if so, in what respects) we are rational and/or irrational in our
Findings: Although it acknowledges that we have impressive cognitive capabilities, it
emphasizes that we also have many, many intellectual shortcomings. In particular, our
decisions are, very often, irrational, and predictably so.
“To help you fundamentally rethink what makes you and the people around you tick”
Relativity: Illustrations or Irrationality
-Fundamental observation: most people don’t know what they want unless they see it in context
Hypothesis: In the subscription case, option 1 and 2 take a bit of thinking.. but its much easier
when we add 3.
-This makes the right decision suddenly seem like a no-brainer: 3 is so obviously better than 2,
we’ll go with that (even though 1 & 2 may have seemed roughly equal prior to adding 3).
“Once you see the decoy effect in action, you realize that it is the secret agent is more decisions
than we could imagine. It helps us decide whom to date, and ultimately whom to marry.”
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