Pre-thinking:

Gilbert presents the ideas of Bernoulli on how to make good decisions, but says we have ignored his principles for the last 300 years. Note that he says that people make consistent estimation errors. Watch for the things that lead us astray and color our decision making processes.

Why you should listen:

Dan Gilbert believes that, in our ardent, lifelong pursuit of happiness, most of us have the wrong map. 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.

The premise of his current research — that our assumptions about what will make us happy are often wrong — is supported with clinical research drawn from psychology and neuroscience.

Who is he:

At 19, he was a high school dropout with dreams of writing science fiction. When a creative writing class at his community college was full, he enrolled in the only available course: psychology. He found his passion there, earned a doctorate in social psychology in 1985 at Princeton, and has since won a Guggenheim Fellowship and the Phi Beta Kappa teaching prize for his work at Harvard.

Questions:

  1. In 1738 a Dutch polymath named Daniel Bernoulli developed a formula that said odds times value equals goodness. Is this true? Can you apply it to an intangible like love? Explain your answer.
  1. A cleaver marketer will put out three or four items, say wine, knowing that most people will choose in the middle. But when we open the bottle, we estimate value by ______ rather than by comparison.
  1. We tend to make two kinds of errors when comparing an items’ value the first is comparison with the past and the second is with the _____________?
  1. Why would a person who was afraid to fly have a swimming pool?
  1. As a psychologist, if you had a client who you saw was habitually making bad decisions, what would you advise him or her about their decision making process.
  1. The expected value of any of our actions –that is, the goodness that we can count on getting –is the product of two simple things:the odds that this action will allow us to gain something,and the value of that gain to us. Why if we have had this simple decision making formula for over three hundred years are people still making bad decisions?

Why we make bad decisions with Dan Gilbert

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