People often make irrational decisions from "summary" of Misbehaving by Richard H Thaler
The idea that people often make irrational decisions is a central theme in my work. I have spent decades studying the ways in which people deviate from the rational behavior predicted by classical economic theory. What I have found is that these deviations are not random or haphazard, but rather systematic and predictable. One of the key reasons for these deviations is the presence of cognitive biases. These biases are mental shortcuts that our brains use to simplify the complex world around us. While these shortcuts are often useful, they can also lead us astray. For example, we tend to overvalue immediate rewards and discount future ones, a phenomenon known as hyperbolic discounting. This can lead us to make decisions that we later regret, such as choosing t...
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