Summary of Why We Make Bad Decisions

Looking for the video?
We have the summary! Get the key insights in just 5 minutes.

Why We Make Bad Decisions summary
Start getting smarter:
or see our plans

Rating

9

Qualities

  • Innovative
  • Applicable

Recommendation

Basic human errors in calculating the odds and value of success distort the decision-making process. Psychologist Dan Gilbert educates his audience in this humorous lecture that implicates human naïveté in poor decision making. getAbstract recommends this eye-opening oration to consumers, financial advisors and product strategists.

About the Speaker

Psychologist Dan Gilbert studies the brain’s influence on happiness. He wrote Stumbling on Happiness.

 

Summary

In 1738, polymath Daniel Bernoulli formulated a seemingly simple equation: Expected value equals the odds of gaining multiplied by the value of the gain. This formula should aid decision making. However, several cognitive errors impede the calculation of both factors. Evaluating odds isn’t straightforward. For instance, humans rely on the power of recall when establishing odds. To illustrate: The higher a person’s exposure to an event, the more readily it comes to mind. Thus, people overestimate the number of deaths caused by tornadoes and fireworks, which feature heavily in...


More on this topic

Customers who read this summary also read

America’s Dopamine-Fueled Shopping Addiction
7
Jack Ma and Elon Musk Hold Debate in Shanghai
7

Related Channels

Comment on this summary